Hiring trends have changed drastically in the past five years with more and more companies turning to staffing agencies for temporary and contingency staff rather than hiring traditional full-time employees.
As demand for temporary staff increases, staffing agencies themselves must respond accordingly by being able to grow, meet payroll, fill more positions and recruit the best talent. As those in staffing know, getting paid for staffing invoices poses a challenge because a 30- or 60-day gap in payment may exist, even when the staffing services have been provided.
These types of cash flow issues can really hinder a staffing agency’s growth and even force it to close its doors. A staffing agency that can’t meet its payroll obligations won’t stay in business for long.
Erase Cash Flow Issues with Staffing Financing, and Focus on Expansion Instead
That’s why staffing factoring, sometimes called payroll factoring, has become a reliable, go-to source for many in the booming employment agency sector. Rather than depending on a business’s credit score, factoring staffing companies will purchase the business’s staffing invoices for cost plus an agreed upon percentage.
The invoice factoring company will then immediately give the bulk sum of the invoices to the staffing agency enabling it to expand, bolster recruitment efforts, make payroll and pay its own vendors. The factoring receivables company then collects the invoices from the client so everyone gets paid fair and square in the end.
Payroll Funding Lets You Stay Ahead of Industry Trends
According to predictions by the experts at “Staffing Talk,” this trend in temporary and contracting hiring isn’t likely to slow down anytime soon. Payroll financing can be a great way staffing agency startups and long-term companies can remain competitive by recruiting the best workers and securing the most sought-after clients, such as those in technology, government contracting, medical / health care and transportation. So whether you are a temp company that serves general employment demands or an agency that specializes by industry, payroll factoring can be your partner in all of your financing needs.