It’s just math; companies with recurring revenue models are able to scale their businesses more quickly. However, during a downturn in the economy, many companies struggle with this model as clients cut back on services or customers stop buying. One thing is clear though, even during a recession, there is work to be done. Employers are just less likely to take on the overhead of an FTE. But employers are more willing to hire contract workers during times of economic stress. Here’s how your business can reap benefits from the demand for contract workers, making your business more recession proof.
Contract Staffing for Recurring Revenue
The statistics are clear: Employers are hiring, but not for full-time roles. One in five workers today are contract employees. Within the next decade 50% of the American workforce will fall under this model. This creates an intriguing opportunity for companies seeking new recurring monthly revenue streams. If your company has a traditional direct hire business, adding a staffing side arm for contract workers can yield monthly revenue that can shore up your business even when times are challenging.
Recruiting and staffing are lucrative business lines. Recruiting can provide companies with a cash influx from a commission based on a successful hire. But temporary staffing provides your company with monthly or weekly revenue. If you can establish a service line with an employer, the recurring revenue can be both steady and deep. There are three primary reasons to consider this business model:
- We already know that the millennial population are more interested in contract positions.
- There is an added bonus that employers prefer a contingent workforce for the cost savings it offers.
- Companies also prefer contract workers because it allows them to scale up quickly during times of market volatility.
Companies can build on this demand while reaping the benefit of recurring revenue. Too, if an employer says they don’t want to pay direct hire fees, you can counter by asking about their budget for contract and temporary workers. Offering a contract staffing solution to customers adds value to your business both with the customer and with your bottom line.
If you believe this is a win/win, here are five steps that can move you forward with this new recurring revenue stream:
- Start by marketing the service line to your clients.
- Outsource your back office needs to an EOR like FoxHire, to keep your administrative paperwork both legal and hassle-free.
- Source candidates within the client’s pay range with a solid range of skills.
- Establish conversion fees just in case the client likes your candidate so much they want to hire them full-time.
- Begin to see recurring revenue to pad and protect your bottom line.
Companies are facing myriad challenges these days but by distinguishing yourself with quality candidates and a value-added service to help your clients overcome these obstacles, you will strengthen your partnerships.
Partner With the Experts.
With an employer of record (EOR) service powered by multi-function software, FoxHire can help companies establish their own recurring revenue with a contract hire service line. Contact us to find out more.