Staffing & Recruiting

Financing.

Staffing and recruiting are among most capital-intense businesses out there. Employees need to be paid on a regular – usually weekly – basis, but clients can take 90 days or longer to pay vendors. A robust line of credit is essential.

Compliance.

To be successful in staffing and recruiting, organizations must be prepared to operate in multiple states and localities, particularly if they want to work with larger organizations. There are an estimated 10,000 different taxing authorities in the United States, each with its own rules. It’s virtually impossible to keep track of these and run a business, but failure to do so can quickly become costly. Some areas that require consideration are:

Payroll – With requirements varying by taxing authority, it is advisable to partner with a provider that can process and keep track of payroll by locality – and provide detailed, segmented reports.

Employee benefits – There’s a lot of competition for top talent, so staffing firms must offer comprehensive benefits packages, typically including retirement plans. Again, rules for these vary by locality, but retirement plans must be audited regularly.

Sales taxes – While staffing is generally not subject to sales tax, certain add-ons – such as software licenses – may be. To further complicate matters, some end-users may be exempt from paying sales tax. A detailed understanding is critical.

Consolidation and automation.

In the name of efficiency, more and more large organizations are outsourcing their vendor selection and management processes to third parties. These in turn often demand that vendors report and interact exclusively through proprietary technology platforms. This can make it more difficult to attract and retain clients.