In the increasingly competitive staffing industry, staying relevant requires adaptability and strategic thinking. One key aspect that can set staffing firms apart is their ability to offer comprehensive benefits packages to attract and retain top talent. Enter Employer of Record (EOR) services – a game-changer in simplifying and enhancing the benefits landscape for staffing firms. In this blog post, we’ll explore the current state of benefits offerings for staffing firms, and how EORs deliver an alternative benefits solution.
How do Staffing Firms Normally Offer Benefits to Temps?
Staffing firms that opt to “Do it yourself” when it comes to benefits typically have limited options. Due to the strict regulations imposed by the Affordable Care Act (ACA) staffing firms are held to a high standard. Unfortunately, those regulations are meant to apply to normal employers, like hospitals, manufacturers, and software companies; not staffing firms. Nevertheless the law still applies to them.
In order to comply with ACA, and still be able to offer staffing services at affordable prices many staffing firms work with an insurance broker to procure Minimum Essential Coverage (MEC) and Minimum Value Plan (MVP) benefits offerings. These plans typically “check the box” for ACA, but don’t offer full coverage for temps. This type of insurance package devalues temporary positions, and puts candidates in a position where they more often opt to take full time roles, even lower paying, with better benefits. This puts staffing firms at competitive disadvantages.
Why Buying Power Matters
Most staffing firms are small to midsize operations. They typically have less than 100 candidates on assignment, which means their buying power is limited. Due to this, they are typically prohibited from accessing full benefits offerings because they are too expensive.
Conversely Employer of Record (EOR) vendors partner with thousands of firms and clients, which increases their headcount into the thousands of employees. Having that many employees increases buying power and allows EORs to offer health benefits to temps and employees at much lower rates. The costs of those benefits are passed down to staffing firm clients at much lower rates than the rates they could have gotten themselves, ultimately making staffing firms more competitive.
Benefits of Using an EOR for Health Benefits
Access to a Wider Range of Benefits:
EORs often have established relationships with benefit providers and can leverage their scale to offer a broader array of benefits. From health insurance and retirement plans to wellness programs and professional development opportunities, EORs enable staffing firms to provide a competitive benefits package that appeals to a diverse workforce. This access to a comprehensive benefits portfolio can be a valuable tool in attracting and retaining top-tier talent.
Cost Savings and Predictability:
Managing benefits in-house can be costly and unpredictable for staffing firms, especially when dealing with fluctuating headcounts. EORs operate on a more predictable cost model, allowing staffing agencies to better plan and allocate resources. The economies of scale achieved by EORs translate to cost savings, making it a financially sound decision for staffing firms to leverage these services to provide robust benefits packages.
EORs excel in handling the administrative tasks associated with employee benefits. From enrollment and claims processing to payroll deductions, the burden of paperwork is lifted off the shoulders of staffing firms. This administrative efficiency not only saves time but also minimizes the risk of errors, ensuring that employees receive their benefits promptly and accurately.
Mitigation of Employer Liability:
Staffing firms often grapple with the inherent risks associated with being the direct employer of their workforce. EORs assume a significant portion of this liability, including legal responsibilities related to taxes, insurance, and compliance. This risk mitigation allows staffing firms to focus on business development and client satisfaction, confident that their workforce is being managed in accordance with all relevant laws and regulations.
Next Steps for Health Benefits:
In the competitive world of staffing, offering attractive benefits is a strategic imperative. EOR services like FoxHire emerge as a key ally, simplifying the process and enhancing the benefits landscape for staffing firms. From compliance and access to a wider range of benefits to cost savings and administrative efficiency, the benefits of partnering with an EOR are manifold. By embracing these services, staffing firms position themselves for success in attracting, retaining, and empowering their most valuable asset – their talented workforce.