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Dig into the True Cost of Hiring Seasonal Workers

June 24, 2013 | Staffing Blog

Particularly for the retail distribution industry, seasonal hiring is simply a part of doing business. The demands of holiday shopping in November and December require extra staff starting in July to fill orders, process shipping and manage customer service.

Hiring those workers to prepare for the high-volume shopping season is a large part of any company’s budget. From the interview and screening process to the training of seasonal workers, this requires an investment of time and money. 

Yet, too many companies base their decisions solely on the bottom line without taking the time to evaluate the true cost of seasonal hiring. They don’t consider the cost savings of having the most skilled employees who can work efficiently and quickly. 

The typical reaction is to hire 100 people for $10 an hour rather than the market rate of $12 an hour under the perception of saving money. The question is do you need 100? What if your company could hire 80 people at $12 an hour? What if those 80 employees actually got the job done? Because of the higher quality and lowered turnover, you meet your case count, errors are reduced and cost goes down.

We find companies would prefer to hire fewer people. If that’s the situation you’re in, don’t let price alone dictate your decision. This is where a skilled staffing agency can assist in finding those quality employees who will represent your business well, ensure your distribution chain is flowing and get the right products to the right stores. 

The hiring process is another hidden cost of seasonal workers. Your HR department is now tasked with screening and interviewing potentially hundreds of candidates along with processing new hires’ paperwork, drug tests and more. A key piece of that process is getting the right people in the jobs in a timely manner. Can you get the numbers you need when you need them?

A staffing agency that is focused full-time on hiring employees for the appropriate jobs can eliminate a number of those headaches. 

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We talked with a large national retailer that spent $250,000 to hire 200 people for about five months. Those 200 people turned into 400 because of the constant turnover. The company was never able to achieve a sufficient level of efficiency because a portion of its workers were always “new.”  

So, we’re back to efficiency – both in hiring and in the quality of workers. 

Consider the returns and exchanges during and right after the holiday season. If a customer returns a product, that item has to be inspected, maybe cleaned and then eventually it can be put back into inventory. How fast can that happen? The answer depends on the quality of the employee processing the return. The faster that item is back into circulation, the faster your business makes money from its sale. 

Take a moment to think about your seasonal hiring strategy: is it working? Of the people you’ve hired for the holiday season, would you add any of them to your full-time payroll? If few names come to mind, that’s a good indicator you need to rethink your strategy and focus on the true cost savings of replacing 40 marginal workers with 20 exceptional ones.