It’s competitive out there for contract labor.  Staffers are hustling – that’s for sure.  But how do they measure up in terms of measuring success?  A key measure that many staffing firms use are fill ratios. 

Fill rate is a critical metric for staffing companies, as it directly impacts efficiency and profitability. A high fill rate reflects a staffing company’s ability to quickly and effectively place qualified candidates, minimizing the time job openings remain vacant. The quicker a job is filled, the faster a company can operate at full capacity.  When staffing agencies maintain high fill rates, they avoid costly delays and reduce the need for excess staff, streamlining operations and driving scalable growth – with very happy clients.

Average fill rate ratios for staffing companies can vary based on the industry, type of position (temporary, permanent, or temp-to-hire), and market conditions. However, here are some general benchmarks that many staffing firms aim to achieve (sources: Bullhorn, GEM)

1. Time-to-Fill Rate:
   • Temporary Positions: Typically, the time-to-fill for temporary or contract roles can range from 1 to 15 days, depending on the urgency and the role’s complexity. Much longer for higher skilled talent typically between 30 to 60 days.
   • Permanent Positions: For more specialized or senior permanent roles, the time-to-fill can be longer, ranging from 30 to 60 days, though some high-demand roles might take even longer.
2. Temp-to-Hire Rate: The temp-to-hire success rate often falls between 60% to 70%, meaning that 60-70% of temporary workers placed in a role successfully convert to permanent employment.
3. Re-Fill Rate: Staffing companies aim for a re-fill rate of below 10%. A low re-fill rate is crucial for demonstrating that the agency is placing candidates who are a strong fit for the role and the company.
4. Success-Fill Rate: The success-fill rate can vary widely, but top-performing staffing agencies often achieve 80% to 90% of job orders filled successfully. Achieving rates above 90% is considered excellent, as it reflects a strong ability to meet client needs consistently.

These ratios help staffing companies assess their operational efficiency and quality of placements. Maintaining competitive fill rates is crucial for staying profitable and ensuring client retention in a competitive market.

As my colleague Jonathan Tierney likes to say, “Sometimes selling contract staffing is a race to the bottom”.  Unfortunately, forces outside of staffing like to commoditize contract staffing and they can’t understand that paying a little more actually makes the customer more money.  Here are some sales strategies that may help negotiate a better price for the staffing company and better results for the client. 

To gauge what price a potential customer is willing to pay, expert sales trainers emphasize a strategy that combines price anchoring with upward negotiation. The key is to have the customer name a price first, then use anchoring to influence the perception of value and negotiate upwards if necessary.

Sales expert Grant Cardone suggests starting by asking directly, “At what price would you feel comfortable buying today?” This question encourages the customer to disclose their budget and gives the salesperson a baseline from which to work. By knowing the customer’s ideal price, the salesperson can then strategically introduce the concept of value, justifying a higher anchor if needed.

Brian Tracy, a renowned sales trainer, emphasizes framing the conversation around benefits and outcomes to create room for negotiation. After getting the customer’s initial price, he suggests countering with, “Our solution is typically valued around $X, as it delivers [specific benefits].” This higher anchor may reorient the customer’s expectations and highlights why paying a bit more might be worthwhile.

Jill Konrath, a strategic sales expert, advises relating the anchor price to long-term value. This is a great play for staffers.  For instance, if a customer suggests a lower budget, the salesperson might say,

“Most of our clients investing in this solution pay similar employees at $X per hour and are achieving results like better a quality employee, lower turnover, higher production, resulting in higher profits etc. Would you be open to adjusting the budget to reach similar outcomes?”

By positioning the higher price as an investment in value, the salesperson strengthens their anchor and gradually moves the negotiation closer to the target price.

Using these strategies—asking the customer to set the initial price, anchoring with justified value, and negotiating upwards—salespeople can help customers see the value in a higher price, often closing the sale at a level that benefits both sides.

Many staffers have the good fortune of winning deals.  They are great recruiters and can fill orders.  Then the big question becomes:  How do they finance it if the client requires 60 days to pay the first invoice?

Conversely, what happens if payment trends slow?  Staffer’s will need more money to finance the same amount of business.

In my 30 + years in the business, the best way to scale a staffing business is using a staffing specific lender that offers unlimited funding. 

Unlimited funding allows staffing companies to scale rapidly by eliminating cash flow constraints tied to contractor payroll. With this financial flexibility, a staffing company can on-board and pay unlimited contractors without worrying about delayed client payments.

For example, a staffing company limited to $2 million in revenue at a 17% profit margin generates $340,000 in profit. However, with unlimited funding, it could scale to $10 million in revenue, even at a slightly lower 15% margin, resulting in $1.5 million in profit—over four times the original amount.

Highlight:

The cost of financing is covered by the increased revenue and profit, making it a self-sustaining growth model.

Additionally, delayed invoice payments can create severe cash flow issues. A company billing $10 million annually with a 35-day DSO has $1,000,000 tied up in accounts receivable. If DSO extends to 42 days, the outstanding A/R balance increases to $1,400,000. Without sufficient cash reserves, the company must finance the $400,000 gap, which can strain operations and limit growth.

Highlight:

With an unlimited funding program, staffing companies no longer need to slow hiring or restrict client acquisition due to cash flow concerns. Instead, they can focus on expanding contracts, increasing placements, and driving profitability without financial roadblocks.

Please contact me for more details.