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Unique Challenges Independent Staffing Firms Face and How to Solve Them, Part 1

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National staffing firms seem to have endless resources, personnel, and budgets. Independent staffing firms, on the other hand, typically work in small teams and take care of all aspects of running the agency on their own. There never seem to be enough hours in the day to maintain client relationships, recruit candidates, and take care of time-consuming, back-office operations.
It’s clear that independent staffing companies face unique challenges that many larger firms don’t struggle with, but there are steps that can be taken to overcome them.

1. Financial Instability

When you first started your staffing firm, you likely had to pay for start-up costs out of pocket, with a bank loan, or perhaps with the help of investors. Back then, you probably thought your cash-flow problems were a short-term challenge to overcome. Soon, you’d be building your client base, sending out invoices, and getting paid.
It probably didn’t take long to realize cash flow is a common challenge that continues long after you’ve established your brand and your agency. Clients may not pay you for your services, or they may pay late. But at the same time, you need to keep paying your expenses and your employees.
Left unresolved, cash flow issues can grow while your business is growing, but you can overcome it. Instead of taking out a bank loan with a high interest rate, consider a back-office payroll service that can offer to finance your payroll costs, while waiting for your clients to pay for services. You should also try to build up an emergency fund to help with the ebbs and flows of the industry, and you should always be looking for new clients.

2. Building a Reputation

When you’re running a small operation, it can be difficult to get clients and candidates to choose to work with you over your competitors. How can you stand out? In the staffing industry, building a reputation is important to signing clients and candidates. Your competitors may have more years in the business or may be better known, but that doesn’t mean you can’t compete.
From the moment you open your doors, you’ll need to work on building your great reputation. Market your business everywhere and anywhere your target market might be. Network as much as possible, both online and offline. As time goes on, ask clients and candidates for referrals, and give them incentives to do so. Ask them for testimonials, or to leave a positive review of your agency online. Most importantly, treat your clients and candidates like VIPs. Focus on delivering great customer service, and you’ll start to build a great brand people want to be associated with.

3. Limited Geographic Scope

When it comes to bigger staffing organizations, they often have the means necessary to place talent nationally and globally—making them more appealing as they’re branded as a one-stop, talent arena for all of their clients’ locations. As an independent staffing firm, while you might understand the nuances and have access to strong talent in smaller, localized markets, appealing to customers with larger geographic-footprint needs becomes more difficult. Further, you need to make sure you’re well equipped to handle everything that comes with taking on employees across the country or globe.
Luckily, there are third-party, employer of record (EOR) providers that can not only allow you to widen your geographic reach, but also provide benefits (healthcare, dental, 401k, etc.,) that are appealing to both clients and candidates, ensure compliance with local and federal tax regulations, guarantee proper worker classification, etc. By consulting with an EOR partner, you can avoid saying “no,” to customer placements, missing out on earning more money, and losing out on potential new business, simply because a requisition’s requirements are out of scope.
To learn what other obstacles independent staffing firms often deal with, and ways to solve those problems, click here.

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