OUTSOURCING AND AGGREGATION ARE ESSENTIAL STRATEGIES FOR GROWTH

SMALL TO MID-SIZED STAFFING FIRMS USE ‘'TIME GAINED MODEL' TO LEVEL THE PLAYING FIELD

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Small to Mid-Sized Staffing Firms Use the

'Time Gained Model' to Level the Playing

Field

This eBook provides practical strategies to help

small to mid-sized staffing firms gain back time and

leverage opportunities that create value, competitive

advantage, and a faster pace for sustainable growth.

Readers will better understand the advantages that

larger firms have (mainly due to human and

financial resources) and how to employ the Time

Gained Model to gain a strategic growth engine and

economies of scale.

By choosing to partner with a back office solutions

provider that applies the Time Gained Model, firms

can capitalize on the combined power of

aggregation and outsourcing. Since choosing the

right and reputable partner is key, this eBook

provides questions that firms should use when

evaluating vendors.

Ultimately, by creating a better capacity to dedicate

more time to business development, smaller

independent firms can drive revenue, increase

profitability, and explore new opportunities to

expand business.

TABLE OF CONTENTS

TIME LOSTWHERE DID IT GO?

THE COMEPETITIVE PLAYING FIELD

WHAT CAN YOU DOTO LEVEL THE PLAYING FIELD

ESSENTIAL QUESTIONSTO EVALUATE OUTSOURCING PARTNERS

CONCLUSION

A PARTNER YOU CAN TRUST

ALL CONTENTS © PEOPLE 2.0, LLC ALL RIGHTS RESERVED

Time LOST Model

Your day is divided. You're in reactive

mode. Growth opportunities are lost.

Time Lost Where did it go?

Successful staffing business owners have mastered

how to spend their work time focused on the

highest positive impact areas: leading the

company’s sales effort, ensuring world-class

customer service, and keeping the recruiting

machine at peak performance to fill open orders

and produce revenue. Sounds ideal, right?

What’s the secret to their success? Are those

owners’ full responsibilities anything other than

typical? How are they able to dedicate much of

their time to anything other than the painfully

familiar urgent issues and mountain of

administrative distractions that challenge most

staffing firm owners? Answer: they no longer suffer

the “typical day” of time lost.

A Staffing Business Owner's Typical Day

A fresh day ahead and a plan in mind, you anticipate taking strategic actions that will help drive your

company’s profitable growth. That doesn’t sound unlike the day of the first type of owner described

above. You think of clients to call, reports to analyze, sales meetings to lead, service reviews to

conduct, and all open orders to assess.

However, that plan is turned upside down as the “typical day” quickly unfolds. You suddenly have a

workers’ compensation claim that needs your attention. There are technology problems to help fix,

as well as a call back to your insurance carrier about a policy renewal. Next there are unexpected

payroll issues ... late-pay accounts causing collection complications impacting funding, and then you

are alerted to a new law on the books that requires research into the potential influence on your

payroll deductions. The day marches on as your early morning intentions come to mind again, but

then someone in your core staff submits their two-week’s notice of resignation. You can’t get ahead

and time flies out the window.

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“It’s not easy taking my problems one at a time when they refuse to get in line.”-- Ashleigh Brilliant, author and cartoonist

T I M E G A I N E D M O D E L

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For most staffing company owners, that day-in-the-life scenario is all too

familiar. Such days of chaos unfold as entire weeks or even months pass by

while sales and revenue numbers stay flat – or worse, decline due to neglect

of profit-driving efforts, due to completely inadvertent poor time

management.

Managing Time – that’s the secret that separates the struggling and over-

stressed owner from the focused and profitable one. However, managing

time is easier said than done in today’s competitive marketplace. That’s why

small to mid-sized staffing firms are finding fresh, strategic ways to compete

with the “big guys” and using time gained as a valuable asset.

The Competitive Playing FieldIt’s tough out there, especially for staffing companies with annual revenue under $20M; they may

experience particular competitive challenges in terms of name recognition and resources.

Moreover, larger regional players and massive multi-nationals with the capacity to capitalize on greater

economies of scale are flooding many markets. They are overpowering in presence with sales people

and lower prices, which enables them to claim more market share. This creates dramatic margin

compression that continues to narrow further and further – making it hard for smaller firms to lower

price without losing most if not all profit margin.

So how can smaller independents compete successfully? In not so distant history, they held a

substantial competitive edge based on proximity to clients who valued their local staffing firm for its

high level of personalized service and deep, long-standing relationships. However, in the current

climate, lower prices and ability to fill orders quickly are driving sales and client relationships.

In fact, more and more small and mid-sized independent operators are exploring new methods,

strategies, and partnerships that allow them to better leverage time and economies of scale.

Know What You're Up Against

The first step in efforts to

compete more effectively is

knowing your competition and

their strengths. Low pricing isn’t

the only advantage that larger

staffing companies often have

over smaller to mid-sized firms.

Here we identify five significant

advantages (and then we’ll

explore how smaller

independent firms can level the

playing field):

1) Technology.

Smaller firms face three notable

problems: the pace of change,

the cost of new systems and

software, and the difficulty of

maintaining a meaningful level

of expertise in-house, which is

essential to stay current with

changes and drive company

strategy. Large companies have

entire IT departments and

sizable budgets to address these

challenges proactively and with

considerable resources, whereas

smaller organizations are more

likely to be in a situation of

scrambling for funds and

reacting to issues as they arise.

2) Regulations.

All businesses are impacted

by the government’s

relentless proliferation of

new laws, rules, and

regulations. An

organization’s vulnerability

in this climate and how

adeptly the organization can

handle ongoing changes is,

in part, due to its size. The

large staffing companies

have qualified legal and

administrative teams

dedicated to staying abreast

of changes and guiding how

their company adapts to

remain in compliance. In

contrast, smaller businesses

typically have a back office

team of one or two

professionals wearing many

hats; they are likely finding it

difficult to keep up with the

rapid pace of changing rules

or have limited

understanding of what’s

required of their business

practices to stay in

compliance.

“Don’t get

sidetracked

stomping on ants

when you have

elephants to feed.”

-- Peter Turla, time

management expert

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3) Funding.

Smaller companies are at a

serious disadvantage when it

comes to payroll funding.

Because larger companies

deal with larger sums of

money, they often have

easier access to cheaper

funding.

Smaller businesses, however,

must deal with lenders like

factoring companies that

charge exorbitant APRs and

demand burdensome terms.

Even those independent

firms approved by a bank

must deal with fee after fee –

and oftentimes their funding

limits are tied to personal

guarantees and available

collateral.

“You don’t overcome challenges by making them smaller but by making yourself bigger.”

-- John Maxwell, author and speaker on leadership

4) Claims.

Handling insurance claims including workers’ compensation and other professional insurance policies

(e.g., EPLI, E&O, Crime, Cyber, GL, etc.) is another way that bigger companies have an advantage. For

one, they have volume to absorb a claim more effectively; a large company with many employees is

less impacted by any single claim than is a smaller firm. In addition, larger companies typically leverage

greater expertise in managing claims by employing professionals who are experts in effectively dealing

with lawyers and claimants. This expertise allows faster resolutions at lesser cost. Smaller

independents rarely if ever have this capacity or experience to manage claims on their own. The same

rings true when considering State Unemployment Tax Act (SUTA) rates; expertise in handling SUTA

claims combined with the higher number of people employed give larger organizations more

opportunity to mitigate claims and keep overall rates lower.

5) Back Office.

Larger companies have a substantial advantage by having a core back office staff that can more

adroitly handle large volumes of work. This translates to higher productivity and ability to take on

more profitable opportunities that arise. Smaller firms lack such economies of scale and are typically

challenged by major fluctuations that impact back office administration.

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What Can You Do to Level the Playing Field?

The goal is clear: put your company in the best position to compete without

compromising quality of service and without eradicating all margin for profit.

How you accomplish that goal determines your real opportunity for long-

term, sustainable growth.

To follow the expression “if you can’t beat ‘em, join ‘em,” smaller

independent firms should just get bigger, right? Unfortunately, this is often

easier said than done. Growth is a process that rarely moves along as quickly

as owners may want. Moreover, gaining the benefits of size and economies

of scale doesn’t happen overnight.

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Time GAINED Model

You are focused on growth and profit. Time gained is your competitive

advantage.

Nevertheless, smaller firms can indeed level the

playing field. The strategy we’ll explore here is

employing the Time Gained Model, which has

proven successful for many firms that have

partnered with People 2.0. This model allows

small to mid-sized staffing businesses to flip the

normal paradigm to their advantage by

capitalizing on the combined power of strategic

outsourcing and aggregation.

Using the Time Gained Model, smaller

independent staffing companies join forces with

an outsource back office provider. This

partnership allows a growth engine to derive

(almost immediately) all the benefits described

earlier, which are more commonly experienced by

only the largest companies in the industry.

Outsourcing

When owners of smaller independents make the strategic decision to outsource back office

operations to the right industry partner, they recapture hours and hours of their own personal time

and their companies can regain massive amounts of time that would otherwise be lost to non-

revenue producing activities.

These owners no longer have those “typical days” of time spent dealing with insurance brokers,

handling claims, juggling payroll problems, trying to collect on past due accounts, and researching

new laws, rules, and regulations. Instead they operate with time as a competitive advantage and can

better focus more efforts on recruiting, sales, and service. This shift in attention allows small to mid-

sized organizations to be proactive and benefit from immediate, mighty gains in productivity and

economies of scale.

Furthermore, the model’s outsourcing element allows firms unlimited scalability to adapt well with

future growth. So not only can firms save money by not spending on infrastructure and fixed costs,

they can continue to grow without additional investment in more back office resources.

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Aggregation

The Time Gained Model also allows companies to benefit from the power of aggregation made

possible by the right-fit provider of back office solutions. Choose an industry partner that represents

numerous staffing companies and thousands of employees. Because their buying power dwarfs that

of the typical smaller independent firm, you can access better resources at a better value.

The ultimate benefit here is two-fold: one, the remarkable savings to be realized in areas of

insurance, technology, and SUTA, for example; and two, the ability to gain access to highly staffing-

specialized thought leaders who regularly consult on legal matters, complicated HR issues, risk

management, finance, accounting, M&A, sales management, and general operations.

In summary, owners of smaller firms can achieve the benefits of greater scale while retaining their

company’s identity and culture as an independent staffing firm. By relying on experts in back office

outsourcing, they can reclaim control of their most valuable asset – time – to explore more growth

opportunities and profitable initiatives. Owners can apply savings to areas of sales, recruiting, and

technology applications to speed processes, etc., and so operate more efficiently and productively,

as well as have the capacity and resources to compete with larger staffing firms.

Essential Questions to Evaluate Outsourcing Providers

When a staffing firm owner decides that outsourcing back office operations is the right strategic

decision, it’s imperative to exercise care in evaluating and choosing the best provider for the

company’s needs. The roster of questions posed to every vendor being considered should include

the following:

1) How long have you been in business?

Choose a known company, respected in the industry, with a long-standing history of success helping

staffing companies with back office operations. Unfortunately, the staffing industry has from time to

time experienced disreputable companies that establish themselves enough to convince staffing

business owners that there are savings to be had on workers’ compensation and SUTA, for example,

but it’s a short-term game. When the numbers go upside down, these dishonest companies simply

close their doors and leave customers holding the bag. Don’t be taken in by unproven promises; ask

the questions and do the research.

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2) Do you own the technology you’ll be supplying us?

This is important, as companies that subcontract-out responsibility for technology will not be able to

pass along the same level of savings and innovation to you compared to a company that owns and

develops its proprietary technology. Plus, customers will be subject to the vendor’s contractual

issues with any subcontractor, which is a scenario that could put you at risk when required to

endure sudden or unexpected change in systems. The time to ensure control of your technology

and your related processes is during the thorough review process when choosing the vendor.

3) How often is the technology upgraded?

Do I have to pay for new releases and features? Given technology’s speed of change, asking these

critical questions will prove worthwhile when understanding the impact on your business

operations. When you choose a company with its own technology development team, you’ll benefit

from their commitment to the continuous improvement of the software solution, as well as your

company’s utilization and feedback for future improvements. Paying for those new releases and

features varies across companies – some charge additional fees and some don’t. You just need to

be clear on expectations and requirements before signing any agreement.

4) What’s my real APR?

Because some lenders have misrepresented themselves, it’s become more stressful and

confounding for business owners to clearly understand what a funding agreement will actually cost.

In fact, the staffing industry has been targeted by notorious funding companies that charge

exorbitant percentage rates that are mixed and muddled in confusing language of terms and

conditions. In such cases, staffing company owners end up paying far too much money to fund their

payroll and can be locked in with strict conditions. Always, always take the time to ask this question

and determine a real APR regardless of the formula presented by a provider.

5) Can you easily explain your insurance program to me?

You want clear language and thorough understanding on this point. Be sure to learn who

underwrites the policies. Also ask if the policy is A+ rated because some clients will demand firms to

carry an “A+ rated” policy. If your policy is issued on what’s called “B-rated paper” then your staffing

company may be disqualified to take on certain clients, and so, lose business. The difference

between an A-rated policy or company versus a B-rated one has much to do with the ability of the

insurance company to support a catastrophic claim. It’s a scenario that may not necessarily be top

of mind when you’re searching for a back office outsourcing provider, but this is exactly the time to

ask this important question.

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6) May I speak with one or two current customers?

Obviously, if the answer to this question is no or you get some run-around response, then you

needn’t go any further and this provider should be eliminated from your considerations. When the

answer is yes, be sure to ask those customers the right questions including but not limited to: If you

had it to do over, would you go with this company again? Do they follow through on their promises?

When you need help, are they there for you? How have they helped you? Spend the time to have a

serious discussion with these references. This is a big decision for your business, so be wise and

thorough – leave no stone unturned.

ConclusionStaffing business owners lose valuable time every day by being pulled into many areas of distraction

such as administrative tasks, payroll problems, technology issues, and so on. Only after those fires of

urgent “daily distractions” are extinguished can appropriate attention be given to the other “don’t

forgets” of management activities such as dealing with insurance renewals, managing worker’s

compensation and SUTA claims, and trying to keep up with the incessant proliferation of new laws,

rules, and regulations.

The ability to leverage time effectively is a great differentiator between owners operating

strategically and those being reactive under administrative burdens. By choosing to employ the Time

Gained Model and realize the benefits of outsourcing non-core back office activities, owners can

regain time to leverage opportunities that create value, competitive advantage, and a faster pace for

growth.

It’s a strategic decision to focus time – your time and the time your employees spend at work – on

the activities that truly make an impact on your success: recruiting, sales, and service. With the right-

fit partnership for back office solutions, staffing business owners are able to eliminate interruptions

and regain balance of priorities that drive profitability.

“The bad news is time flies.The good news is you're the pilot.”

--Michael Altshuler, sales coach and keynote speaker

A Partner You Can TrustAt People 2.0, we pride ourselves on being loyal staffing industry leaders. By outsourcing non-core

activities to People 2.0, you are alleviated of the time-wasting burden of back office functions.

Moreover, you can focus on sales, recruiting, and other strategic, business-building activities, as well

as improving service delivery.

We are a partner to staffing companies and dedicated to building long-term relationships that are

designed around a win-win structure. We operate on a model that is aligned with your success – you

shift risk, offload administrative requirements, and keep costs in control. Plus, our strategic model

helps you take advantage of aggregation to experience financial savings and buying power.

We also offer an exceptional team of specialists for consultation in areas of financial analysis and

investing, defining competitive differentiation, developing growth and sales plans, negotiating

acquisitions, managing risk, handling employment law and controlling unemployment costs, and

other staffing business success strategies.

Learn more about using our Time Gained Model as your company’s growth engine:

call 888-270-3579 or visit www.people20.com.

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TIME GAINED MODEL

This material is for informational purposes only and does not constitute advice. No reliance should be placed on the information contained and guidance should be sought from People 2.0. No information contained in this eBook may be reproduced or copied in any format without the express permission of People 2.0.

©2017 People 2.0