Fascinating Staffing Niches: Flexible Funding’s Payroll Funding Success Stories
Steve Capper – Flexible Funding - July 17, 2017
Most people across the country are familiar with basic, general staffing niches that have flourished for decades– clerical and administrative staffing, accounting and finance staffing, and light industrial labor. Much of the public is not aware of the numerous specialty staffing niches that have come up in the most recent decade. The pay rates and bill rates in these specialty
niches tend to be higher than in general staffing, which creates a need for greater amounts of funding.
The following are examples, case studies, of these interesting niches. Flexible Funding has successfully provided accounts receivable payroll funding, or payroll financing, for all of them. In a future article we plan to cover some interesting niches that we considered financing but did not end up funding for various reasons (such as IRS problems or international credit risk) but are fascinating to know about nonetheless.
Case Studies of Payroll Funding for Unique Staffing Agency Niches
A staffing agency in Kodiak, Alaska needed funds for satellite launches. Kodiak island is a good position on the globe to put objects up in space, and if something goes wrong with the launch there are no major population centers in the area for fragments to fall on. A few months before a launch, high-rate engineering contractors come into Kodiak to set up the launch, and temporary security people are needed to protect the facility. As soon as the satellite is up in space, the project is basically over and people leave town. The project was quasi governmental…a cooperation between private industry and state government.
Cancer research is not always done by doctors, in medical labs or in Petri dishes. Statistical analysis of populations helps determine cancer hotspots, cancer causes, and cancer prevention. One staffing agency specialized in these statisticians exclusively.
Scientists working as nuclear physicists at a National Laboratory in New York, and at facilities in Tennessee and Georgia were all on board as 1099 contractors. The U.S. government demanded that they all immediately become W-2 employees, but was not offering the job as a U.S. government W-2 position. This necessitated that they quickly go onto the payroll of a staffing agency. As these scientists were high hourly pay-bill, the need for payroll funding jumped dramatically.
Indian Casino Black Jack Card Dealers and Bankers
Indian tribes have utilized staffing agencies for both financial and experience/knowledge purposes. Financially, not all casinos are strong especially in the beginning years; there can be huge loans to pay off for the construction of the casino. Later additions of parking structures or adjacent hotels can tax financial resources. And some tribes have other non gaming businesses that burden them financially. Utilizing the services of an outside staffing company gets the casino an unsecured loan to cover payroll (for as long as it takes the tribe to pay the bill). A tribe may build a casino and not have experience to operate it; they would hire an experienced hotel-gaming company to run it for them, such as Harrahs. Or they rent labor from a staffing specialist until they learn the business, and then wean off or completely eliminate the staffing agency.
Verizon Cellphone Infrastructure
Verizon was a Johnny come lately with the Apple I Phone. Other cellular companies had it first. To catch up, Verizon hired contact engineers from one of Flexible Funding’s Los Angeles, CA based payroll funding customers. The basic infrastructure was set up, the Verizon Apple I Phone was launched, and the project winded down.
Travel Nurses for Snowbirds
Every winter, tens of thousands of snowbirds from the Northeast descend upon Arizona, Florida, Palm Springs California and other warm regions to escape the cold. These are older retirees with all of the health problems associated with age. This requires armies of travel nurses and other healthcare individuals to fill in the gaps in caring for them. Commonly, nurses would take thirteen week travel assignments in Phoenix, Arizona or Florida. By the time the hospitals and/or insurance companies sorted out the staffing agency’s bills and a multitude of related travel expenses (such as temporary housing for the nurses) it would take them eight weeks to make payment. The sales volume of the staffing agency hit $1 million dollars per week requiring Flexible Funding’s payroll funding program. Flexible also provided added-value support (at no additional cost) to help sort out and follow up on small-item travel expense disputes that would often delay payments.
This large travel nursing company eventually sold for a large sum. The owner and his lieutenants were under a two year contract to continue to run the company, and not compete. But as soon as the two year contract expired, the offspring of the owner and the lieutenants, who worked in the business for years, came right back to us for payroll funding for their new travel nursing agencies.
Military Truck Drivers
The U.S. Marine Corps will outsource truck drivers. You just can’t take a young Marine recruit and put him or her at the wheel of a truck. You have to have special permits to drive these trucks. When an invasion or battle is being planned, massive amounts of supplies will have to be moved in the weeks leading up to the action. While the front pages of the national newspapers and radio talk show hosts in St. Louis, Chicago, Boston and San Diego may be hotly debating whether or not the U.S. will actually invade somewhere, Flexible Funding would know for sure what the U.S. was going to do because it’s staffing agency funding customer needed large payroll amounts to pay the short term contract truck drivers.
In some county jails in, the prisoners do not sit and languish. While in the pen, they can (or must) take classes to get an education so that they are not put back on the streets without a way to make money. One of Flexible Funding’s payroll funding customers provided educators to prisons. An interesting class taught the prisoners dog grooming. Envision a hard core tough-guy criminal in an orange prison jump suit tidying up a white dainty poodle!
The price of oil/gas has fluctuated widely–mostly up– in the past ten years. When the price would climb, the energy companies would hire petroleum engineers from our staffing agency customer to go into old wells in California’s Central Valley or subcontract to companies in Houston, Texas to get more oil out of them. This was not controversial fracking, but rather older style wells being reopened or fitted with new technologies. Billing shot up dramatically, requiring large shots of payroll financing
Pharmacists, temporary and permanent
A huge success story of Flexible’s was a Denver, Colorado company that specialized in placing pharmacists. In the last decade there has been a shortage of pharmacists. Universities have not turned out enough of them as the pharmacy major is a difficult curriculum; there is a lot of chemistry and sciences that many students cannot handle. Pharmacy chains such as Walgreens and CVS have built thousands of new stores further out into the new suburbs, and all of the new stores need pharmacists seven days a week. Supermarket chains such as Safeway stores have added pharmacies and pharmacists to many of their larger stores and they too have built further out into suburbs.
There has been a large shift in U.S. population demographics as people are living longer on average, and the largest segment of the population known as baby boomers are moving into old age which requires more pharmacists and drugs. One can easily see the big demand and the reason for pharmacist shortages–and a potent staffing niche. As a result, pharmacy majors getting right out of school have been able to get jobs in many markets that pay $100,000 per year and more. And we have even seen an inducement signing bonus of a new low-end Mercedes for recently graduated students.
Flexible Funding successfully worked with this niche pharmacy staffing company for years until the owners sold out at a very good price.
Insurance Disaster Adjusters
A Southern company headquartered in Texas contacted Flexible Funding with a special niche and special needs. At a national level, disasters go on almost all year, every year. And they all cause needs for short term armies of insurance adjusters along with huge jumps in payroll and needs for payroll funding accounts receivable funding. When it is not hurricane season in Florida, it is hail season in Texas. When it is not hurricane or hail season, it is fire season in California, Oregon, Washington, Montana, or Idaho. When it is not any of the previous, it may be tornado season somewhere else in the midwest. Flood season happens in many states every year. Climate change seems to be making the situation worse, which creates the need for even more adjusters.
The staffing company did not even have to wait for disasters to happen: Florida started a program where thousands homes had to be inspected (prior to any hurricanes or damages) to determine their hurricane “worthiness”. The disaster insurance agency had the people with just the right expertise for the job.
Staffing companies like these often don’t know how big their volume will be and don’t know what their payroll financing needs will be, if any. They want to have financing set up in case they need it, and also because they may not need it, they don’t want to be obligated for monthly minimum fees and early termination fees. They don’t want to have to pay deposits, due diligence fees, setup fees, documentation fees. Flexible Funding’s funding program does not have any of these– a good match.
Large Sports and Music Events
NASCAR Races, The Superbowl, and other large events are very large short-term needs for the niche of hospitality labor, especially in the area of food service. Flexible Funding’s staffing agency customers have provided labor and we have provided the payroll funding for many of these events in New Orleans Louisiana, Dallas Texas, San Diego California, Atlanta Georgia, and Birmingham Alabama.
Substitute Teachers and Educational facilities
Although we have seen a number of entrepreneurial staffing agencies plan on providing teachers and other people for education, we have seen few do it successfully. One specialized in teachers for charter schools only. One specialized in school psychologists. Another one of our Seattle, WA payroll funding customers specialized in nurses only for educational facilities in Washington Sate and the Pacific Northwest.
One Northeastern U.S. based staffing company came to us in full bloom– had already been around for years, had high volume, and were still growing. They basically provided every substitute teacher in the state of New Jersey, for years, and worked with us until they sold. A lot of people would be surprised to learn of a statistic they had verbally shared with us at the time; on average 10% of the teachers in the state of New Jersey are out sick at any given time. That is a larger percentage than many would imagine.
Banking and Real Estate Mortgage Industry-Loan Modifications
When the mortgage meltdown happened the across the U.S. the need for mortgage modifications exploded. Everybody wanted a modification sooner than later, and the banks did not have enough people to push them through. A Los Angeles, CA based company, specializing in the mortgage and banking industry had the mortgage experts but did not have the capital for the explosive growth. Accounts receivables PAYROLL FUNDING secured on invoices only was needed for banks and real estate mortgage companies across the country in Charlotte North Carolina, Atlanta Georgia, Denver Colorado, Dallas Texas, Chicago Illinois, Houston Texas, Las Vegas Nevada, Los Angeles California, Miami Florida, Milwaukee Wisconsin, Philadelphia Pennsylvania, Hartford Connecticut, Tampa Florida, Raleigh North Carolina, Washington D.C, Philadelphia Pennsylvania, Tucson and Phoenix Arizona, San Jose California, and Portland Oregon, New York City New York, Cleveland Ohio, Buffalo New York, and both Nashville and Memphis Tennessee.
Locum Tenens Temporary Physicians
Doctors are educated in larger cities that have medical schools. Teaching hospitals and residencies are mostly in larger U.S. cities. Doctors and their spouses, partners, and families all get used to the abundance of culture (music, arts, intellectual stimulation) in these larger cities and as a result do not instantly take off for rural or farming areas, causing shortages of doctors in the rural regions. Flexible Funding worked with an Atlanta, Georgia based company to provide temporary doctors across less populated regions of the United States. Retired doctors are a great labor pool for this niche. With their families all grown up, many of them have time to go off on assignments for a few weeks. It gives them some stimulation, but as they are retired they don’t want too much stimulation. Working a few weeks or months of the year is what they like… the rest of they year they can golf, travel, or pursue hobbies.