Pricing for Temps Can Only Go So Low

January 12, 2012
Posted by Link Staffing Services

Recently, Standard and Poor’s downgraded Koosharem Corp., which does business as Select Staffing, provoking many strong reactions in the temp staffing industry. While various factors were cited in the decision to downgrade, the fact Select was doing business at unsustainable rates impossible for other firms to match gave the rest of the industry license to feel some measure of satisfaction.

But when that feeling wanes, what’s left is the realization that something’s gotta give.

Every business will always feel pressure to drive prices down. There will always be a cheaper hamburger to buy. But staffing isn’t hamburgers. Our product is talent; it’s people. We need to value it appropriately. We also need to train our clients to value it appropriately. Shaving two cents off the market price is not a victory; it’s a problem.

The lesson to be taken away from Select’s problems isn’t just that you can’t cut price indiscriminately and expect to remain in business, but that if the end users of contingent labor want an open playing field of suppliers, they need to accept reasonable rates, high enough for both the contingent staffing suppliers and the contingent staff themselves to make a decent living. It’s the only way to ensure the talent remains strong. Otherwise, no one prospers.

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