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How negotiating a lower cost for temporary labour can actually mean paying a higher price.

Most companies in the manufacturing and logistics sectors experience peak periods for fulfilment. For some this could be due to a new product launch or marketing campaign, for others demand might be affected week to week by weather patterns, and almost all companies in both sectors are subject to increased demand for their products and services leading into the Christmas period. It’s unrealistic to recruit a full quota of permanent staff just to help cope through short peaks, but it’s critical that the increased demand is met. As a result, many businesses turn to temporary labour and recruitment agencies to help them manage the additional workload.

When it comes to procurement and purchasing, value for money is a top priority. But where temporary staffing is concerned, what exactly does value for money look like? Does paying a low hourly rate for a temporary employee represent good value for money? Are you always getting the best deal possible by negotiating the lowest rate with an agency? On the face of it, it would certainly appear that way, but if we look a little closer, we find that often this is not actually the case.

Here are just a few factors to consider when negotiating rates:

–         The best agencies will listen to your requirements, take the time to understand the challenges involved and work with you to deliver a strategy to ensure you achieve your objectives and meet your fulfilment targets. If an agency is offering to work for a rock bottom price, are they realistically going to work through this process with you thoroughly and effectively?

–         There are costs associated in working to a high standard. If an agency is charging a rate which appears too good to be true, are they meeting those high standards? Are they accredited by the relevant industry and governing bodies? What will be the impact on the reputation of your business if you align yourself with a company operating with low standards?

–         Are you aware of market comparison rates for similar roles? Are you up to date with unemployment levels in the immediate area? This information will help determine what you need to pay your temporary staff in order to attract and retain them through your peak periods. How will you be able to offer competitive pay rates if you do not have this information? How will your temporary staff be paid the necessary amount if you are committed to driving down the charge rate you are willing to pay your agency?

–         Low pay rates more often than not result in high staff turnover. What is the cost of repeated training on your productivity levels and also your bank balance if you are constantly having to replace temporary staff?

–         What is the overall cost of not fulfilling your orders if you cannot attract and retain people during your peak? This could be a monetary cost in the form of a fine from your client, it could be damage to your reputation, or even the inability to secure repeat business.

When you engage with a recruitment partner for your temporary labour, whether your requirement is for 2 people or for 200, you should be confident that your chosen agency will consistently work to a high standard, can provide relevant and up to date market data, will work with you to formulate a strategy, and can ensure you are going to get exactly what you need, when you need it. Ticking all of these boxes often means turning down what might look like the ‘cheapest’ option.

So in summary, although £11.00 per hour initially appears to be better value than £12.00, this might not actually be the case when you consider the overall financial cost and potential damage to your business and reputation.

If you’d like to discuss how Rapid Personnel can work with your business to consistently achieve 97%+ staff fulfilment rates, or if you’d simply like to learn more about the services we offer from transport to strategic planning, please feel free to reach out to us directly info@rapid-personnel.co.uk.

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