The Rise in the Minimum Wage and Your Temporary Workforce

The minimum wage rose to $13.50/hour in Los Angeles in July and will rise to $12/hour in Orange County in January. Couple this with the fact that it’s a hot candidates’ market today with unemployment in Los Angeles at 4.1 percent (in May) and in Orange County at an incredible 2.6 percent (also in May), and the best temporary workers have their pick among assignments.

So if you’re not paying even more than the new minimum wage going forward, you more than likely will find that your staffing partner won’t be able to fill your order because it won’t be able to find quality candidates at that rate.

Top Talent Wants More Than Minimum Wage

The fact that better talent wants more than the new minimum is understandable: not only should better employees be paid more, they often are. And they expect it.

What’s more, if you want a temporary person to stay with you for the duration of his/her assignment (or even work with you on a temp-to-hire assignment), you should pay top talent more in order to keep them working for you: underpaid workers may decide to look for better-paying work. Irvine staffing agency

Investing in top temporary talent by paying a few dollars more is still less than paying for wasted training, productivity and overtime when the best workers leave assignments for better pay.

The average tenure of a temporary employee industry wide is 10.7 weeks (in 2017), but Helpmates’ temporary associates stay with us an average of 17.1 weeks, 60 percent longer!

Billing Rates Need to Rise with the New Minimum Wage

In addition, chances are you might be asking your staffing firm to keep its billing rates low. At first blush, this makes sense from your standpoint: after all, the temporary workers aren’t your employees but the staffing firm’s and one of the reasons a company works with a staffing agency company is to  keep its staffing/workforce costs low.

But your staffing partner’s costs have just increased because the staffing firm has a ton of expenditures that need covering with the money it receives after it subtracts the rate it pays its employee (your temporary worker) and your billable rate:

  • Worker’s compensation
  • Payroll taxes
  • Benefits (to both internal and temporary employees)
  • Recruiting costs
  • Office lease and overhead costs
  • And so on.

Here’s a little-known fact: while you may pay a billable rate of $22.50/hour to your staffing firm and the agency pays its employee $15/hour, you may think that that 50 percent markup is considerable. But don’t forget all the costs the staffing firm needs to cover (as listed above). The reality? A staffing firm’s actual profits “are pennies on the dollar, low single digits.”

Sounds like we’re whining doesn’t it? Yet, just like our clients, staffing companies are in business to make a profit. If we continue to charge you the same but pay our employees more, our already-slim profit margin decreases even more.

Bottom line: the higher minimum wage requirements in Los Angeles and (in January) Orange County will affect the quality of the temporary workers your staffing partner is able to attract and place. You should expect your partner’s billable rate to increase and support its doing so.

In fact, Orange County employers may want to consider raising their own “minimum wage” now because Orange County residents can “cross borders” to work in Los Angeles County cities with the higher minimum – and they probably will.

If you’d like to partner with Certified Staffing Professional experts who have the tools to customize a temporary staffing program that will deliverable favorable results in this challenging market, or if you just want to better understand compensation and billing rates, contact us here at Helpmates: we’ll be happy to chat with you.

Establishing a Successful Internship Program

It’s the end of March and you know what that means: thousands of college students are looking for summer internships!!!

Orange County staffing service

If your Los Angeles- or Orange County-area company doesn’t already have an internship program, why not? Whether paid or un-paid (the student receives no monetary compensation but does receive college credit for her work with you), internships greatly benefit both the student and the employer: the student gets some real-world experience (that could lead to a real-world paying job) and the employer gets to have a top-notch student in his office, eager to work and learn – and possibly work after the internship! In other words, starting an internship program at your business can be a terrific recruiting tool.

March and April are Prime Time for Students to Seek out Summer Internships: How to Start One

If you’ve never had an internship program before, take a look below; we’ve put together an eight-step process for you to follow (and make your own, depending on your firm’s specific needs). Take a look below:

  1. Talk to a few local colleges.

If you’ve never hosted interns before, you’ll have a lot of questions that need answering. You’ll need to speak with college career offices to see what requirements they have as to what is acceptable in an internship (hiring someone just to get you coffee and run errands usually is not considered an internship). After all, the college wants its students to learn something during the students’ time with you. The college may ask you to outline what its students will learn and how you will ensure they learn it.

  1. Decide how many interns you can handle and where they will work.

Not every department in every company can host interns. Departments which typically host interns include marketing, human resources, accounting/finance, and even operations. Talk to department heads to see how many they may want/can handle before promoting internships.

  1. Decide if the internship will be paid or un-paid.

Don’t be worried if you cannot pay your interns. So long as they receive college credit, you will have students applying for your opportunity.

  1. Design the program.

A good internship structure will have learning objectives, daily responsibilities, both short- and long-term projects, evaluation procedures, written expectations, orientation, and an off-boarding process.

  1. Evaluate and decide on the skills, educational background, etc. you feel your interns will need.

For example, if you’re opening up a marketing internship, you will want a student with at least one or more classes in marketing, public relations/communications.

  1. Post the position.

You’ll want to post it with the many colleges and universities in Southern California. (You may decide to post only with a few, or with all; you can even post the opportunity at nationwide internship-posting sites.)

  1. Interview, check references and hire.

Practically every student you interview will have some sort of job history: it’s important that you check to make sure they have a good work ethic, no criminal background, and so on. Even if your firm’s HR department is in charge of the program, make sure the intern’s direct supervisor has a big say in choosing the final candidate.

If you’d like to hire your intern, but are still a tad uncertain if you want to bring her onboard permanently, Helpmates can put her on our payroll until if/when you decide to transfer her to your own.

Want to learn more? Contact the Helpmates office nearest you today.

© Year Helpmates Staffing Services. All Rights Reserved.
Privacy Statement | Site Map | Site Credits.