Emerging Businesses Tap Into Tremendous Resource

Corporate America has finally come to realize the vital role small business plays in the economy. The small business sector has never grown as fast and furiously as it has in recent years. According to the Small Business Association, the number of companies with fewer than 100 employees has increased nearly 50% since the early 1980's. From 1990 to 1994, small businesses created the majority of new jobs. Currently, 20 million small business enterprises account for about half of the nation's employment and more than one-third of the Gross Domestic Product. It is small business that is credited, in large part, for the country's recovery from the recent recession.

In order to compete with established companies, these small operations are now utilizing services that were once used only by large corporations. One of the most cost-effective services which can be utilized by small businesses to help them compete with bigger corporations are temporary and direct hire employment services. The evolution of the employment services industry has paralleled the tremendous growth of small businesses. For the past several years, the employment services market has consistently experienced annual growth rates of 20%. AppleOne, the largest privately held employment service in the nation has experienced a 300% growth over the past decade. Gregg Hassler, Regional Vice President of AppleOne, attributes 90% of that growth to creating staffing results for today's small businesses.

One of the first experts to spot the mushrooming temporary staffing trend was British business consultant Charles Handy, who wrote a 1991 bestseller on the subject. In The Age of Unreason, he suggests that the thriving organizations of the future will be comprised of essential employees supported by independent contractors and part-time help. This utilization of a contingency workforce will allow companies to increase productivity, cut costs, and focus on their primary businesses.

Small business owners are beginning to realize the advantages of using temporary employment services. Many small business owners find themselves spending a great deal of their time addressing human resource issues. Recruiting for available positions is only a part of this function. Workers' compensation supervision, benefits administration, tax withholdings management and payroll regulation are all tasks that must be performed regardless of a company's size. A mistake or oversight in any of these areas can prove to be extremely costly in terms of time, money and increased exposure to liability.

Typically, hiring a temporary worker, even at a high hourly rate, is more cost-effective than a direct hire employee. Benefit consultants estimate that about 30% of a direct hire employee's total compensation package goes for health insurance, taxes, and unemployment contributions. As the employer of the temporary worker, the temporary agency absorbs all responsibility for these costs.

Temporary staffing is also an excellent way to utilize high-level help that would be impossible to afford otherwise. Continual rounds of corporate layoffs have released an army of highly qualified professionals who are willing to take on sophisticated temporary assignments. Some small entrepreneurial companies are utilizing these knowledgeable professionals on a temporary basis and finding they offer strategic solutions without the cost of employee benefits. The rise of the contingency workforce is a cost-effective way to address the needs of small businesses that are grappling with growth problems, but do not want to hire high-level staff on an ongoing basis.

Another benefit small businesses can enjoy is the elasticity of working with temporary staffing arrangements to meet the demands of busy seasonal projects. Doing this can be very cost efficient, as the company avoids paying for a direct hire employee whose skills are only utilized part of the time. A quality employment service provides enhanced screening, testing and reference checking of all candidates. This provides their client companies the assurance that temporary workers consistently arrive prepared to go to work.

Of course, even businesses that routinely utilize temporary staffing services may need to hire direct hire employees. Many employment services offer options for direct hire hiring that are tailored to their clients' individual needs. Comprehensive screening, temporary-to-direct hire arrangements and extended guarantees can all be incorporated into a hiring package that saves the client company valuable time and ensures a successful match. The combination of these hiring choices and temporary staffing alternatives make the employment service an invaluable ally for today's small business. For more information on a variety of innovative staffing solutions, please call your nearest AppleOne office at (800) 564-5644.