HOW TO START AND OPERATE A TEMPORARY HELP SERVICE
This is a service business with excellent growth potential,
indications of strong stability, a nationwide market with a
growing demand and a risk factor that's rated average or less than
most new business ideas. Temporary Help Services are well suited
to absentee ownership situations; require no experience or
technical knowledge on the part of the entrepreneur; and have only
minimal equipment needs. Net profits before taxes for some
established temporary help services, have been reported as high as
$1000,000 per year.
There's a difference between regular, private employment agencies
and a temporary help service. The employment agency is a
"brokerage" office that matches unemployed people with available
jobs. The temporary help service hires people onto its own
payroll, sends them out on contract jobs, and pays them
accordingly.
Temporary help services make money "off the top". They send out
temporary workers on one or two days only jobs paying $10 an hour
to the worker, and collecting $30 an hour for the time the worker
spends on the assignment. More and more businesses are willing to
pay the premium costs for a trained person for just a few days at
a time, than to adopt the burden of a 40 hour week payroll
obligation and the task of finding enough work to keep such a
person busy enough to justify a full time salary and the support
costs. Businesses everywhere are finding it easier to pay more
for "temporaries" than hired 40 hours per week "permanents".
That's the secret of success with this kind of business, and the
point to keep in mind when selling your services.
The successful temporary help service recruits as many skilled and
qualified workers as possible. These workers differ from the
regular jobseekers in that they're looking for "temporary" work
only. For any number of reasons, they're only willing to work on
jobs lasting from one to five days, or perhaps two to three weeks,
on any one job assignment.
These people are ideal for the employers needing help, but not
wanting to hire and train full time employees. Your task will be
to find and attract top people and to maintain complete files on
them. What kind of jobs they specialise in, their attitudes about
work, and when or how often they're willing to work would be
essential information to have.
Each person should be tested in your office, sent out on a few
assignments to build up a favorable reputation as a good worker,
then offered a permanent listing on your roster of available
specialists.
Work hard to build your roster of available workers. Within
ninety days of start-up you want to be able to send someone out to
fill any employer's needs, regardless of the job requirements.
Job assignments will range from loading dock and light clerical
work to word processing.
Depending on the size of your market, you could conceivably
specialise in temporary help for data processing, the medical or
legal professions, or perhaps the retail trade; and you'd still
make a lot of money. Generally, though, we are going to show you
here how to start a "full service" temporary agency.
You'll need a good mix of employers in your area for best chances
of real success. Your area can be one of high unemployment or one
with relatively few unemployed. Whichever the case, the thinking
of the business community and the work force available should be
non-traditional; there should be an undercurrent of thought
towards the idea of calling in specialists to handle a job
quicker, and more efficiently, than the full time worker.
The people wanting to affiliate with you as workers will be
housewives, college students, retired people, and a large number
of people who like to work, but don't want to be tied down to a
regular job. When you explain the concept of your service,
you'll be pleasantly surprised at the number of traditionalists
you'll convert to temporary workers.
First, you should visit your local Chamber of Commerce office.
Explain the philosophy of your service, meet the chamber officers
and ask for their help. You'll find that they have a listing of
all the businesses in the area, plus the names of the "right"
people to talk to in selling your service. If you request, you
might be invited to Chamber meetings and be introduced to the
business leaders in your community. The only kind of information
they will not be able to help you with is a listing of small,
home-based one-person enterprises.
You can locate your offices just about anywhere. You'll find,
however, that your greatest success will come if you locate in a
modern office building housing professionals, such as lawyers,
accountants, insurance companies, etc. Project a professional
image. Locate in a city center or business section of your town
if you can.
Basically, you'll need 600 to 700 square foot of office space.
You should have a reception area, two offices, and a room to store
supplies. The more prestigious your business address and office,
the better calibre of clientele you'll attract. People looking
for temporary work, and employers considering using your services,
will doubt your abilities if they aren't favorably impressed with
your image.
It is possible to start this business in your home, but make sure
you have the space for a reception area, and at least a semi
private interview area. Most of your selling efforts will be
conducted by mail, phone and personal visits to the employer's
place of business, so you won't have any problem there.
So, practically speaking, starting your business from home will
require a much smaller initial investment. In this particular
business, rent and advertising will be your largest expense, so
beginning the business from your home is definitely worth
considering if your start up funds are limited.
In actual operation, you could have the applicants interested in
your services contact you by phone. You would then set up
appointments either in their homes or your own, thereby
eliminating congestion of cars in front of your home. If you
began on a part time basis, you could have a family member or a
friend answer your phone and set up appointments for you. If you
do begin part time, and working out of your home, you might look
into the advantages of a professional telephone answering service.
Another idea for saving on costs might be to rent unused space
from businesses already established. These businesses might be
sales or distribution offices, suburban insurance agencies, quick
print or copy shops, and repair shops. Look around - many
businesses have had to take what was available at the time, and
would be more than happy to lease or share their vacant space.
Keep in mind though that you'll do much better with an office of
your own, and you should move into one just as soon as you can
afford one. Proper facilities that convey a professional image
should be number one on your list of priorities.
Your business image is projected by your address and the
appearance of the building in which you locate. Your reception
area will set the mood of professionalism and efficiency. The
reception walls should be inviting - walls painted in light pastel
colors, wall prints, floor lamps and wall to wall carpeting. It
should also feel comfortable while being functional. Comfortable
modern chairs and sofa; perhaps a floor planter or two, reception
desk and ash trays all help to achieve this effect.
The main office need have only a desk and a comfortable chair,
facing the door, a chair beside or in front of the desk, and a
file cabinet. A print or two on the walls, and perhaps a book
case are the only "extras" you might use to dress up your office.
Your second office equipment will be for testing your applicants.
You can inexpensively build a table along the length of two walls,
partition it into cubicles and have an electronic typewriter, an
adding machine, and maybe a headset connected to a dictation
machine, and another for testing shorthand capabilities. Later
on, you'll probably want to have a word processor and a computer.
Ideally, you should also have a sales office and a storage room.
The sales office will be where you greet and talk with employers
who drop in to look you over to find out more about your business.
Mainly, this office will be where your people will work from when
calling prospective clients and selling your services by phone.
The storage room needs only shelves to hold various forms, mailing
pieces, envelopes and business records.
One way to hold your start up costs to a minimum is by leasing
your office furniture and equipment. Whatever you do, remember
that you're projecting an image, so don't settle for less than the
best. This is absolutely imperative in regard to any equipment
used for testing your applicants. You might be able to work out
an arrangement with the business department of a local college, or
business school, to send your applicants to them for testing on
their machines. Such an arrangement, even at a cost of $20 or so
per test, could save you several thousand dollars in start up
costs.
The first person you should hire should be either an experienced
manager or someone you can quickly train to assume those duties.
It's best to hold out for a person with at least one year
experience as a Bona Fida Personnel manager. This person should
be outgoing, detail minded, people orientated, and be able to work
well under pressure.
Your manager will be responsible for organising the interview and
testing systems, for setting up your sales solicitation program
and for supervising the temporary workers, as well as your office
staff. It's a highly responsible and demanding position, so don't
be reluctant to spend the money necessary to get the best. You
will need to research to determine what salary such a top manager
receives in your area.
The next member of your staff should be an enthusiastic, hustling
sales person. This employee should be experienced and adapt at
selling by phone as well as in person. Unless you can afford to
pay a good direct mail advertising copywriter to create your
mailing pieces for you, it would be wise to look for direct mail
advertising or copywriting experience.
Your sales person should spend the mornings calling prospective
employers on the phone, and the afternoons making in person sales
calls. With this kind of routine in mind, look for sales people
with high ambition and energy levels. Try to pick the kind who'll
come in early and stay late to work on his direct mail efforts,
clearing the decks so that he uses his time during regular
business hours to close sales by phone and in person. You need
and want a 'closer' - not an order taker. Be as selective as you
have to be in choosing this salesperson.
In addition to the going rate which a sales person of this kind
should be paid, you should also consider paying a 5% bonus for
every new account brought in. When you find the right person, it
will be worth it, so make it worthwhile to join your staff. Not
all sales people will necessarily develop into good sales
managers, so try to find one who fits all your requirements. The
sales manager would recruit, organise, develop, motivate and
supervise your sales staff. With those responsibilities, you'd
want to offer a salary plus override on the sales production of
his staff of sales people.
You'll need an efficient and foolproof book-keeping system to keep
track of your payroll, client billing, income taxes, work
schedule, hours worked, and all the money that comes in. For this
chore, I suggest that you contract with a company that handles
this type of work. Explain to them everything you think you need:
ask them to set up a system, and then instruct your receptionist
on how to keep it up to date on a weekly or monthly basis.
The last of your staff will be your receptionist. This person
should be attractive, have a lot of empathy with people, and an
easy smile. They should dress stylishly, but not provocatively.
When they are not answering the phone or greeting customers, they
can be administering tests, doing miscellaneous typing, making
folders for the records of your workers, and general office
duties.
The kind of temporary workers you'll want to attract will fit into
several general categories, and can be recruited in a number of
different places. Try having brochures made up about your
company, and send them to career councillors at your local
business, secretarial and technical colleges in your area.
Another group will be housewives who perhaps held regular jobs
before marriage or the birth of a baby, and now want to get back
into the job market. You can bring these people in by posting
notices in shop windows, arranging announcements at meetings, etc.
Another group to recruit will be the "bored with life" people.
These will be in the job group not satisfied with the future where
they are, and looking for a better opportunity.
It is imperative that you begin recruiting and signing workers as
soon as possible; at least a month before you open for business is
not too early. According to industry surveys, the most common
reason for the failure of temporary help services is not enough
workers lined up to fill client demand. When you get a request
for help, you should be able to send out a qualified person.
Each market area differs in the number of different types of
workers a temporary help service should have available, but in
every case it's best to have more than you figure to be a basic
need. You must establish a maximum number of people within any
one occupational field that you'll sign up, or else you won't be
able to keep everyone busy. Unless you keep the workers you have
registered working pretty much as often as they want to work,
you'll begin to lose them.
It's not hard to determine when a person is losing interest in
temporary job assignments through your firm. Whenever you call to
give an assignment and you can't reach the person you're calling,
try several follow up calls. It should become obvious to you that
they're no longer interested if you still can't reach them with
your follow up calls. It's a good practice to ask for
notification of vacation or other plans that will affect their
availability for work.
If you call and a job assignment is refused with a lame excuse,
come right to the point and ask if he wants to change his
availability status, or if you should drop him from your list of
available temporary workers altogether. Never coddle a temporary
worker. If he's not available when you call to give him an
assignment, or he gives you a less than valid excuse for not
accepting, flag his call assignment card and move on to your next
available worker. You might call a couple of days later to check
his availability, and interest in continuing to work, but don't
waste too much time. You can always reinstate such a worker, but
it is probably better to spend the time recruiting a replacement.
As mentioned earlier, one of your major expenses will be for
advertising. Your manager and sales people should keep you
advised on your current advertising impact and results, and from
this you should have a good understanding of how to use your
advertising budget most effectively. Your advertising should be
double-barrelled, aimed at both the employer and the worker.
Generally, your efforts to add new employers to your clients list
should focus on direct mail. Advertising efforts to recruit new
temporary workers should be almost exclusively devoted to
newspapers. Years ago, some radio stations sold sixty second
commercials to a few temporary help agencies. The agencies talked
to prospective employers, playing up the fact that they had
skilled workers to handle overload and deadline situations. These
commercials were broadcast in the mornings before 8 o'clock. Then
they followed up during the afternoon hours with commercials
inviting people seeking temporary work to come in and sign up.
Everything worked well except that not enough prospective
employers called often enough to justify the expense.
For really professional results, you should get a freelance
advertising copywriter to do your direct mail piece. This should
be a page brochure, emphasising these points.
All employers have sudden work overloads, face deadline
situations, or are suddenly left with a mountain of work for
specially trained employees just when they are sick, on vacation,
or off on an emergency.
Your company understands these workload problems, and has skilled
professional replacement workers who can quickly step in and get
the job done.
Your company thoroughly tests each of the specialists hired for
these special staffing crisis situations, and can assure the
employer that they are tops in their individual areas of
expertise.
Your company is well aware that many businesses would like to save
the expense and headaches of hiring a full time specialist of the
same calibre of your people on a Temporary or Oncall basis. Your
people cannot be hired by the prospective employer because they
already work for you, but if and when a temporary worker is
needed, your company stands ready to fill the need, regardless of
the job speciality required.
Even if he doesn't need one of your people today, the need could
arise at any time, and suddenly. So they should keep one of your
brochures handy, and don't hesitate to call you personally for
whatever temporary help is needed.
One you have the copy written, decide on the layout and type if
and what color should be used, and take it to the printers. Your
brochure should be printed on 100 grams paper, or art paper, and
folded to your requirements by the printer.
Your complete mailing should consist of a short cover letter
inviting the recipient to avail himself of your services; a
brochure explaining your services in greater detail; postage paid
business reply envelopes. The mailing envelope and the cover
letter should be addressed to each business owner or personnel
manager by name.
Your newspaper ads for qualified workers looking for temporary
assignments should be display ads in the "Help Wanted" section.
Most such ads are one column wide by 3 to 6 inches deep. Be sure
to have an ad running on a Wednesday or Thursday.
These ads should invite the readers to come in and register for
work with your company. Work with your freelance copywriter to
say what you want to say. Overall, though, these ads should
explain that you have plenty of jobs going begging; that the
worker sets his own days to work, and can take jobs as seldom or
often as he likes.
In day to day operations, your manager will interview applicants,
talk with clients, solve problems, take orders from employers, and
make job assignments. Usually, his busiest time will be right
after lunch when job orders start to come in. With this in mind,
you might want to arrange for him to take an early lunch period.
While your manager is "running the show", your sales person will
be making telephone calls in the morning, and in person during the
afternoons. It's a very good idea to send out your direct mail
advertising one week, and then call on these same people, either
by phone or in person, the next week. Remember that your sales
calls should be relaxed visits, allowing the prospect to learn
more of your business and the kinds of people you have available.
During each sales call, the prospect should be left with the
feeling that your company can save him money, solve a lot of
production and scheduling problems, and take the exasperation out
of his personnel requirements.
As a rule, you'll find that most jobs are called in during
afternoon hours. With this in mind, it would be wise to have set
procedures for your specialists to call you each afternoon to let
you know where they can be reached until 5.00pm if they are
available for a job assignment the next day. You might want to
set a policy of "No call from you - no assignment for you".
Most temporary help agencies give their workers a supply of 3 part
time cards when they're hired by an agency. When the request for
a worker comes in, the most qualified in the required category is
called. Job, name of company, location, approximate length of
job, and payment are all explained. If they agree to take this
job, they fill in the time card for the day the work begins. When
they report for work, they have the time card signed by the
employer to verify starting time, and finishing time. One copy of
the time card stays with the employer; the temporary worker keeps
a copy; and the other copy is mailed to your office. Smooth and
simple, but make sure you've got everything worked out before you
begin.
Your book keeper notes the proper information on the ledger for
that employee, files the time card and sends a ledger duplicate to
accounting for billing. Of course a reminder call should be made
first, but as a rule, any account that hasn't paid within thirty
days should receive a personal visit. As to the hardcore
delinquent, no more temporaries should be sent, and a collection
agency should be used to clear up the account.
You will have to get a licence from the Department of Employment
to run a temporary help agency, details of which can be found at
your local library.
That's it then - the how, what, why and where - of getting started
with your own profitable temporary help service! Remember, it
takes solid and consistent advertising, earnest recruiting and
selling. So don't stop or let up until you have everyone in your
area registered, and every possible employer as a client, aware of
your business. It's a big job with lots of challenging work
involved, and you'll need good people to help. It is worthwhile
to search out these people with care, to be sure you have good
reliable, employees - the rewards will be well worth it! Organise
your business for success, and get with it!
