Temporary staffing agencies have many financial obligations directly connected to running their business. From paying workers’ compensation insurance to marketing service to potential clients, every dollar spent is aimed at keeping the agencies competitively positioned in the industry.
Yet, with all of these expenses, none are as challenging as funding payroll. Ensuring there is enough money to cover payroll and taxes is more important than marketing. Think about it. An agency could host the biggest job fair, add hundreds of candidates to the roster who are skilled to fill client positions.
However, if the staffing agency is unable to pay their associates on time, those highly skilled candidates will go to the competitor that does not have cash flow problems. This presents a challenge for staffing agencies who typically pay associates and vendors weekly. The problem is clients can take 30, 45 or in some cases, 90 days to pay invoices.