The biggest staffing firms have cut margins. You’re facing ridiculous cost expectations from your clients. And, from a business standpoint, it simply doesn’t make sense to staff an account that amounts to peanuts, or worse, a loss…or does it?
In other retail industries, you’ll oftentimes see companies happy to break even (or even take a small loss) on one product, simply because the add-on sale of another product or service to the same customer more than compensates. For example, some electronics retailers can drastically reduce the cost of their merchandise because they make a huge profit on their extended warranties.
The same principle can hold true for staffing firms. Beyond your traditional staffing and recruiting services, what other ancillary services or products can you offer? For example:
- Drug Screening
- Background Screening
- Training and Development
- Benefits Administration
- HR Consulting
- Business Process Consulting
- Logistics Consulting
Unbundle your services and examine the profibility of each ancillary service. Which of these services provides the highest margins for your firm? Once you define which services provide you with the highest bottom-line profit, you can afford to get your foot in the door with low, or no margin accounts if you can also sell those add-on services.
You may be taking a light hit on the traditional staffing services side, but think about the growth potential of payroll processing or background screening for every internal hire.
If the potential makes sense, it may be worth competing with the “big guys” on price and make your real profit through add-on services.