Risk & Reward in Recruitment How do you mitigate the dangers and maximise the income in new business opportunities? Platinum WFM combined its technical expertise with finance insights from Scott Weddle, founder of Think Fast Finance, to bring you some answers. The demand for specialist contractors remains high, especially in disciplines like finance and IT. Since a handful of these contractors can represent over a million dollars in payroll, contractor management offers a very attractive growth opportunity for recruiters. With the sweet comes the sour, and the potential reward goes hand-inhand with risk. Darren Berson caught up with Scott Weddle to share ways that recruitment agencies can reduce the risk and maximise the reward. Reducing Risk Recruiters are exposed to fairly specific risks when they manage contractors. Time delays need to be mitigated because any delay between the recruiter paying the contractor and the client paying the recruiter has a direct impact on the recruiter’s cash flow. PlatinumWFM’s back office solution minimises delays: first, we chase contractors to submit their timesheets. Then we follow up on client approvals, and the moment those are done, our system automatically issues the invoice.
Our Contractor Care team is critical to this process because human beings are much better at chasing up other human beings than any automated reminder. Another necessity is meeting the tax and reporting obligations involved in paying contractors. Our system tracks taxable income and Super contributions, checking off tax, reporting and governance requirements with as few opportunities for human error as possible. If PlatinumWFM reduces the risks in the back office, what else can recruiters do to protect their business while expanding into contractor management? We asked Scott about other financial risks, and he highlighted two important issues: #1 Exposure Risk This happens when a recruitment agency is overly exposed to one client. What would happen to the recruiter if that one client suddenly couldn’t pay them? This is a very real risk so being prepared for it is important.
Darren Berson Platinum WFM
Scott Weddle Think Fast Finance #2 Working Capital Risk Running out of working capital is a major risk. This could result from exposure risk or because the recruiter did not fully understand their cash flow cycle. This cycle tells business owners what their current capacity is for growth. So, if a recruiter has ambitions to expand their revenue streams, it’s a great idea to get professional advice and plan for it financially. Securing Rewards Contractors are much more likely to choose a recruiter who takes good care of them. PlatinumWFM knows this, and both our Contractor Care Team and business system is designed to make the cycle of contracting, onboarding, and submitting timesheets as quick and easy as possible. A recruiter who takes equally good care of their contractors and clients is much more likely to have repeat placements and more secure revenue growth. (Continued page 33) RECRUITMENT & CO | 31
