Ask Barb: Should I Add Contract to My Recruiting Business?

Dear Barb:

I read an article you wrote in the Contracting Corner for Top Echelon last year. I’ve owned my Search Firm for over twenty years and don’t do any contract, just permanent placement of Engineers. After reading your article, I’m thinking about adding contract but don’t know where to begin. Do I have my current recruiters sell both services? Do I hire someone to head up a new division for me? How do I fund the contract payroll? It does make sense that I will increase the value of my company if I add contract, but I don’t know that side of the business. I would appreciate your advice.

Frank Z., Fort Wayne, IN

Dear Frank:

You have established clients and that is the best place to start. Let them know you are opening a contract division due to demand and ask if they currently hire contractors for special projects or during peak business months. Their answer might surprise you. Chances are they are using other contract firms to handle their contracting needs. If a company does not use contractors, chances are they are over-staffed which is a great way to sell contract. You could also ask them if they have any Baby Boomers retiring this year and suggest they let them retire, but bring them back as contractors. You will find that adding contract will open doors to additional new clients for your direct placement business as well.

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Regarding the funding of your contract payroll, there are funding companies and networks that provide the entire back office and become the employer of record for you. You should focus on building the business and outsource the back office to one of these companies. I have found Top Echelon as well as TFI to be extremely reliable to mention two possible resources for you. A contract division WILL greatly increase the value of your business due to the recurring revenue model.

Barb Bruno, CPC, CTS

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Barb Bruno, CPC, CTS, is one of the most trusted experts, speakers, and trainers in the Staffing and Recruiting Professions. If you want to receive FREE training articles from Barb, sign up for her NO BS Newsletter! Barb has spent the last twenty years focused on helping Owners, Managers, and Recruiters increase their sales, profits, and income.

Her Top Producer Tutor web-based training program jumps-starts new hires and takes experienced recruiters to their next level of production. Barb's cutting-edge program, Happy Candidates, provides you with a Customized Career Portal in less than 10 minutes. Happy Candidates allows you to help the 95% of candidates you don?t place and eliminates the greatest time waster in your business.

If you'd like to contact Barb, call (219) 663-9609 or email