How to Budget Your Contract Labor Spending


Workforce management system

Business recruiters know that the right person is out there for the job, finding that person in a sea of resumes can be a challenge though. Recent findings suggest that U.S. employers are taking longer than ever to fill vacant positions, averaging around 25 working days to hire a new employee; companies with 5,000 or more employees typically have an even longer hire period of around 58 working days. Company spending for recruitment can reach up to $3,500 per candidate as recruiters must go through an average of 144 resumes for entry-level positions and 89 resumes for professional positions. Hiring third party workforce management services can help companies find qualified individuals while saving time and money in the workplace.

The Need for Workforce Management Solutions

Businesses that handle their payroll and budgets internally run into increasing problems as their business grows. Nearly one out of every four businesses report spending over six hours every month on payroll alone. From a financial standpoint, it is best if no more than 30% of your gross revenue is devoted to payroll expenses. Businesses must also consider benefit which can make up an additional 30% of employer costs. Other employee benefits like paid vacation must also be factored in. Simply put, the more employees a business has, the more paperwork and budgeting is required to keep all the pieces in proper balance.

Contract Labor Spending

A recent study by the U.S. Government Accountability Office states that up to 40% of the American workforce is now made up of contingent workers, that is workers who do not have what one would call a traditionally secure job. Up to 90% of business firms use freelancers or some other kind of contracted talent. While these are technically not employees, they are on the payroll: by planning out your company’s contract labor spending, businesses gain a greater familiarity with their monthly expenses. Up to 66% of independent contractors work full-time, although this does not necessarily mean they work for the same company all of the time. Don’t leave business up to chance, consider workforce management solutions to help manage your growing business.

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