Does this sound familiar: Do you feel your business is on a perpetual roller coaster— from peak selling periods down to valleys of low cash inflow, when you have to hope things will rise up again? It’s a stressful way to live. It’s easy to feel exhilarated while you’re making money, when the roller coaster is at the peak, but the ride down and the time spent in the valleys can instill the fear of running low on cash before the next trip up.
How can you fix this problem? By realizing that it’s a fixed cost problem. Your labor costs don’t dip along with your sales volume. You have to pay your employees whether they’re active and productive, or doing busy work well below their pay grade while waiting for things to pick up again.
How can managed staffing help?
Managed staffing can help you turn fixed costs into variable costs. How? Managed staffing means you outsource a whole layer of labor—generally those positions that provide the least value during slow periods—to a third party, thus turning those fixed costs into variable costs that disappear when demand disappears. Your client employee base remains a fixed cost. Adding and subtracting outsourced employees as needed becomes a variable cost—and you’re only paying for those employees when you need them and their efforts.
Basically, managed staffing gives you the flexibility to handle shifts in demand. When you need extra employees, you’re paying for them, but when you don’t need them, you’re not.
What are some of the benefits of managed staffing? First, turning a fixed cost into a variable cost gives you more price flexibility when you need it. You can consolidate your contingent labor spending and see more clearly where your money is going. Your core employees will get an added feeling of security when they don’t run low on work during the slow periods—they won’t have to worry about being laid off due to lack of work.