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Home » Industry News » Opinion piece: The price of inferior service – the true costs to consider when choosing a TES provider

Opinion piece: The price of inferior service – the true costs to consider when choosing a TES provider

In an increasingly tight economy, businesses across the globe are unfortunately cutting costs to secure their survival. Slashing expenditure is the order of the day, but the problem with cutting costs and choosing the cheapest service provider is that it usually ends up costing the company more in the long run. Here, the adage, “you get what you pay for” isn’t just a saying, it’s a warning – that price alone should not be the deciding factor. So, how should organisations who are facing squeezed budgets handle the ‘good service’ vs ‘good price’ choice conundrum? Fortunately, these two factors are not mutually exclusive, and businesses can have both. As such, the question remains: what should companies consider when searching for the right Temporary Employment Services (TES) provider to meet their staffing requirements?

Risky business conditions

The reality is that South Africa’s economic conditions are only getting worse. As we struggle with the fall-out from the Covid-19 pandemic, load shedding has become a frequency that is estimated to have contributed to more than one million lost job opportunities. Strikes, demonstrations, and other types of civil unrest continue to have far-reaching and often unpredictable consequences for businesses. Unreliable water infrastructure results in intermittent water outages regardless of dam water levels – all of which heightens the risk for most businesses across the country.

One of the most sustainable, cost-effective ways for businesses to mitigate their risk and reduce costs is to bring onboard a TES provider to handle their staffing requirements. Here, it may be tempting to choose providers based on price given that the wage bill is usually the biggest cost for businesses. However, choosing the cheapest provider might seem like an immediate cost reduction, but this saving rarely pays off in the long term. While the price appears to be right, organisations need to properly assess whether the supplier can meet all their needs and requirements. It is therefore important for companies to understand what is, and what is not included in the service offering from any TES provider under consideration or they could end up with a nasty surprise bill for unexpected costs.

The hidden costs of making the wrong choice

The cost of selecting the wrong TES provider or accepting inferior service can be crippling, especially when compounded with the challenges that businesses face in today’s times. When a TES partner fails to gain a proper understanding of their client’s businesses, this exacerbates the client’s risk instead of alleviating it. Lack of experience in handling Human Resources (HR) or Industrial Relations (IR) matters pertaining to staff results in downtime, lost productivity, and often costly litigation, which can have catastrophic financial implications for the business.

The real TES advantages

The right TES partner will ensure that they fully understand their client’s business by immersing themselves in the daily operations and proactively mitigating identified risk areas along with providing a full range of labour-related services that ultimately benefit the client.  Businesses gain the advantage of agility and flexibility in staff overhead costs, along with the ability to rapidly scale up or down the staff complement required to meet operational demands in a compliant, efficient manner.  This comes with the cost benefit of paying the TES provider at least 30 days from invoice while staff continue to enjoy weekly pay cycles. This affords the client much-needed financial breathing room while they wait on payment from their own customers.

In this way, the client can turn their focus solely to their core business knowing all staffing requirements will be handled quickly and with full compliance to all labour laws. By taking a vested interest in the business, the TES provider can supply staff that is aligned with the client’s company objectives and values. In addition to shouldering the cost and risk of their client’s staffing requirements, the chosen TES provider will work with the client to further reduce costs and implement cost saving measures without negatively affecting service delivery. This is based on a genuine appreciation for the fact that any business willing to outlay capital in outsourcing the staff component should be shown a return on their investment.

When choosing a TES provider with which to partner, it should be a priority to find a company that is reputable and that leads with not only compassion, but integrity, honesty and transparency in their costs and service offering. Such a provider should have their clients’ and workers’ interests at heart, while focusing on service delivery and not just their own profitability. When the right TES provider is chosen, the value gained from the partnership will far outweigh the cost of their service.

By Tania Govender, Sales Director at Worldwide Staffing

 

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