Business owners often turn to staffing agencies to help them find both full-time and temporary workers. This strategy allows them to focus on developing their product lines, meeting with clients, and overseeing their finances without sacrificing the quality of their employees.
When business owners use staffing agencies, it’s critical that they take out staffing business insurance policies. After all, the more companies that entrepreneurs partner with, the more likely they are to run into liability issues. It’s also important for business owners to accurately assess the cost of the employees they hire through their staffing agencies. The following factors are some of the most expensive staffing agency costs to consider.
Orientation
No matter what industry staffing agencies specialize in, they need to adequately train their employees. This training may take just a few days if a new hire is working as a secretary or waiter. For managers, artisans, and other specialized positions, orientation takes weeks or even months. Businesses must calculate how many hours their new employees will work before they can do their jobs efficiently as well as how many hours experienced workers must spend training new ones.
Insurance
Insurance isn’t part of labor costs for staffing agencies that only have part-time or seasonal employees. Under the Affordable Care Act, though, all businesses that have 50 or more employees who work at least 40 hours a week have to offer health care plans. Business owners with fewer employees may choose to offer health insurance, and they can use the government’s Small Business Health Options Program to offset the costs.
Salaries or Wages
In addition to the cost of health care and staffing business insurance, business owners must calculate the cost of their employees’ salaries or wages. The simplest way to calculate the total expense of nonsalaried employees’ payments is to determine how much they earn in a pay period, which is generally two weeks long, and then multiply that figure by the number of pay periods in a year, which is usually 26.
Business owners must keep in mind that this value may be an overestimate because most employees cannot work full-time every week of the year. They can factor in the number of unpaid vacation and sick days they offer, but it’s always safer to overestimate the cost of employees’ wages.
Overhead Costs
When people think of overhead costs, they usually think of expenses outside of staffing issues and product manufacturing:
- Rent
- Water bills
- Electricity bills
- Legal costs
- Travel expenses
The number of employees that businesses employ directly affects how high overhead costs are, though. For example, the more employees a company has, the more rooms it needs to rent and the more internet it needs to fund.
About World Wide Specialty Programs
For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage, we have available to protect your staffing business, give us a call at (877) 256-0468 to speak with one of our representatives.