Every year, the staffing agency business grows more competitive. If your agency wants to get an edge over the competition, you need to control costs and enjoy a stronger bottom line. The first step is to control costs associated with your mark-up fees. The lower your spending, the more profit you gain with each employee placed.

Lowering Unemployment Insurance Costs for Staffing Agencies

Staffing agencies face unique challenges when it comes to unemployment costs, but you also have the opportunity to greatly improve your bottom line by properly managing your unemployment insurance claims. Poor unemployment claim management can leader to a higher unemployment insurance tax rate, raising how much you spend to provide employees to your clients and how much you need to charge as a mark-up fee.

If your competitors can charge lower mark-up rates, you may lose out on placing employees. Not only will you have smaller profit margins, you’ll lose your competitive edge.

Lower profits are just one of many reasons why staffing agencies need a strong tracking system for unemployment claims. Unemployment claim tracking systems help you manage your costs, lower your tax rate and make you competitive. You’ll be able to spot potential trouble spots, such as particular clients who end up costing you in unemployment or don’t properly follow your processes. You can also be sure every unemployment insurance claim is valid and gather the information you need to challenge claims in hearings.

Through your tracking system for unemployment claims, you should keep an eye on:

•       Claims
•       Potential costs
•       Protest/hearing wins and losses
•       Actual costs

You can track in a variety of different ways, including:

Track unemployment insurance claims by location/branch office internally

Design your system to track the performance of your various branches at controlling unemployment costs. Keeping an eye on the performance of your front line staff is critical to ensuring the success of your UI cost management program. If you have one or more offices not properly following your program or processes can lead to increased costs for your entire company and make your unemployment claim tracking ineffective.

To improve the effectiveness of this kind of unemployment claim tracking, you should manage your new and reopened claims, sending out a weekly “hotlist” of new claimants who are going to collect unemployment. Your staff should try to put these claimants back to work as quickly as possible so you can keep UI costs down.

Track unemployment insurance claims by client

When you track unemployment claims by client, you can see which clients help you control costs—and which clients only make them worse. You can address these problems with your clients this throughout the year with effective communication so the issues can be solved. If costs don’t come down, you will have the reports and evidence to show your client why you need to increase their markup rate.

With the right tracking software, you can even track unemployment claims by more specific factors such as client location, department, job title and more. These specific factors can help you get to the root cause of high unemployment costs so you can address the issue and enjoy a better unemployment insurance tax rate.

To succeed in any industry, you must control the costs that you can influence and achieve any competitive advantage possible over others in your industry. Through a tracking system for unemployment claims, you can help your staffing agency achieve true cost control (and likely lowering those costs) and gain a price (or profitability) advantage over your competition.  For more information on unemployment tracking systems, please visit us on the web at UnemploymentTracker.com.