Let an Employment Agency Do It!

Manager's Desk Column from the January 2011 issue of Cutting Tool Engineering.

January 15, 2011By Keith Jennings

Ramping up to prepare for a busier year in 2011 has been a goal of mine over the past few months and there seems to be some light at the end of the tunnel. The process has included new hires.

Most machine shops in my region have been busy during the last half of 2010. As a result, finding qualified machinists and operators has been a challenge. I’m glad to have the problem of needing to increase staff, but it’s frustrating to be unable to acquire the necessary manpower. That’s partly because many applicants aren’t exactly the cream-of-the-crop as machine shops are retaining their best employees. After some initial interviewing and nothing to show for it, I discovered I needed to recruit more aggressively.

The method that has served me best, so far, involves working with a staffing company that specializes in skilled-trade placement. It allowed me to transfer the time-consuming activities of conducting interviews and background checks and paperwork to them. I worked with several agencies for a while, but focused on one that was getting better results. Once we discussed our needs and expectations in detail, that agency was able to recruit on our behalf with minimal effort on our part. After several months of patience and persistence, we’ve added five new employees. Not only that, we are also able to “try before we buy” with no strings attached.

The hourly rate paid to the staffing agency has about a 50 percent markup over an employee’s hourly rate, but most of that is saved through lower workers’ compensation insurance premiums because these workers aren’t officially on our payroll. The agency also pays for criminal background checks, drug testing and help-wanted ads.

If we choose to hire candidates prior to them working 500 hours, the agency usually charges a fee to transfer them to our payroll. However, the agency waived the roughly $3,000 fee for one candidate we hired earlier than expected. The guy would have been worth paying the fee, but I’m not going to argue with a $3,000 savings!

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With so much uncertainty in today’s market and because most machinists command higher salaries than the average worker, hiring them can be time-consuming and risky. Many don’t last, aren’t the caliber they claimed or have baggage you can’t legally discuss.

Therefore, utilizing staffing agencies and passing hiring duties to them has many benefits. I’ve been able to get out of the employee recruiting business, saving time. In addition, working with candidates for a while before bringing them onboard ensures a greater likelihood of long-term success.

Perhaps conditions in other regions don’t justify using a staffing agency. But in our case, all candidates were certified to be legal to work in the U.S., drug free and have a clean criminal background. If we don’t like them, we send them back.

As with any business decision, there are positives and negatives, but if you need to add talent and don’t like scheduling interviews, paying for drug tests and background checks and dealing with the paperwork, consider having a reputable employment agency do the grunt work. Once you establish a relationship and the agency is familiar with your requirements, adding talent is relatively easy.

I’m a lot more confident with our employees’ potential now compared to a few months ago. That peace of mind can greatly enhance shop management. I hope this new year turns out to be a great one, whatever approach you take.