Why Staffing Agencies Are Replacing Legacy Providers with Scalable Solutions

In a competitive staffing industry marked by talent shortages, tight budgets, and global challenges, meeting client demands is increasingly difficult. Many staffing firms struggle with outdated legacy systems or providers that hinder efficiency, pressure profit margins, and limit service expansion.

To thrive in this challenging environment, agencies need more than adaptation — they require transformation. With Deel, you can streamline operations, offer exceptional flexibility, and effectively address client needs, from seamless global hiring to compliant payroll management and much more.

Transitioning to Deel allows you to protect your margins and establish your agency as a preferred partner for top clients. Are you ready to enhance your services, attract larger accounts, and achieve remarkable growth? Discover how Deel can elevate your operations and differentiate your staffing business.

Why legacy providers are holding you back

Staffing agencies are experiencing a slowdown in 2024 amid the ongoing talent shortage and economic downturn. In this tough market, there’s increased pressure to meet every client’s need to avoid losing valuable accounts and stifling growth strategies.

Many agencies are turning to Employer of Record (EOR) services to fulfill client requests in other countries. However, legacy providers often can’t keep pace with demand — their outdated tech, limited product range, and minimal coverage make it impossible to guarantee client satisfaction.

Legacy solutions with narrow offerings can force you into a tight corner when you have to meet client needs beyond the standard scope. You must decide between four unappealing choices:

1. Say no to the client and risk losing their business
2. Charge the client extra and potentially drive them away
3. Absorb the additional costs, cutting into your profit margins
4. Add yet another local vendor, raising your overall expenses

By investing in a scalable tech solution, you can meet client needs while protecting your profit margins. It becomes easier to source, hire, and manage a contingent workforce globally to fulfill their every request.

Read on to discover more about how an all-in-one solution like Deel can help your staffing agency scale its operations and fuel business expansion.

How scalable solutions give staffing agencies a competitive advantage

In uncertain economic times, staffing agencies may be hesitant to allocate more funding to back-office software. However, recent research shows the investment pays off. Fast-growing agencies dedicated more of their budget to software and automated more processes in 2023 than shrinking ones.

Research also indicates tech investments can give staffing agencies a significant lead. While half of agencies experienced little to no expansion in 2023, fast-growing companies increased their revenue by over 50%. The same companies are experiencing:

• Higher client Net Promoter Scores (NPS)
• Increased profit margins
• Fewer layoffs
• Further global expansion
• Stronger candidate relationships

Basically, scalable solutions don’t just provide benefits to staffing companies. If implemented well, you can immediately differentiate yourself from competitors, attract and engage job seekers, and support growth despite the difficult economic climate.

In the following sections, we explore how Deel can give your company such a significant lead.

Hire and source top talent wherever needed

Leading solutions provide global coverage, allowing staffing agencies to hire from anywhere, making it easier to quickly fill positions at client companies. For example, Deel supports the employee hiring process in over 100 countries worldwide.

Why has coverage become so critical, though? The issue is that even if clients operate out of a single country, staffing agencies still need to look further afield. The global skills shortage has made it challenging to find qualified candidates close to home, and some companies require niche skills and experience that are only available in specialized foreign talent pools.

Without global coverage, you’re forced to either limit your scope or turn to another EOR to hire foreign talent. Option one makes it harder to satisfy all your client requests. However, option two means juggling multiple providers and potentially driving up your overhead costs.

Broad international coverage is the only way to scale your back-office operations to deliver results quickly while keeping processes streamlined.

See also: Unlock Global Talent: Deel’s International Hiring Guide

Guarantee seamless worker deployment

Recruiting talent is only half the challenge. Many staffing needs are time-sensitive, as workforce shortages can reduce productivity or delay projects at critical moments. You must deploy workers quickly to help keep client operations running smoothly.

Great solutions simplify the hiring and onboarding process to ensure workers are ready to start within days. For instance, Deel automates key steps like:

• Employment contracts: Deel generates contracts based on the role, location, and industry and asks workers to supply an electronic signature
• Document management: The platform prompts workers to upload documents like academic qualifications and licenses and stores them in one centralized place
• Task assignment: Deel’s Slack plugin lets you develop custom onboarding workflows, which walk new hires through all the necessary tasks
• Equipment provisioning: When workers need laptops or software to do their jobs, you can automatically send them pre-approved catalogs to choose from. Deel IT also manages shipment, maintenance, and device recovery

Streamlined deployment doesn’t just keep clients satisfied. The extra efficiency saves you time and lets you allocate resources more effectively, increasing your agency’s capacity. You have more scope to focus on expanding your offerings or building stronger client relationships.

In addition, your staffing agency will be able to offer incredible scalability as client needs change over time, enabling companies to quickly scale up or down their workforce. This flexibility ensures greater agility and cost-effectiveness.

See also: Elevate Employee Onboarding & Offboarding Efficiency with Deel

See also: Elevate Employee Onboarding & Offboarding Efficiency with Deel

Maintain compliance across borders

Leading solutions can help staffing agencies avoid compliance issues that interfere with their ability to hire and manage contingent workers. The best ones automatically track regulatory changes in all the countries where you operate and apply them to their software. Where action is required, they give you advanced notifications so you can resolve the issue.

Employment law is a good case in point. Certain regions and industries have strict requirements about working hours, rest periods, and severance terms. You must reflect all these in each worker’s employment contract and adjust it when necessary to ensure compliance.

Deel lets you generate compliant contracts within minutes. You only need to enter a few details about each worker and the client company. If you have any concerns, our local teams can provide specialized and targeted support.

Global compliance is especially beneficial for staffing agencies looking to enter highly regulated markets like the UK and Germany. You can source and deploy talent in regions where many agencies struggle, instantly differentiating yourself from the competition.

See also: Unlock Continuous Compliance with Deel’s Compliance Hub

Simplifying contractor management

The global demand for freelancers continues to grow, meaning staffing agencies must be prepared to source and deploy contract workers on a large scale alongside permanent hires. However, managing these processes on a separate platform from your leased employees adds extra steps to your workflow and increases the risk of errors.

Leading solutions include a Contractor of Record (COR) service, which allows you to manage your entire contingent workforce in one place. They provide the same services and the same level of global coverage, so you never need to add vendors to satisfy client requests. For example, Deel Contractor of Record offers:

• Worker classification
• Contract management
• Onboarding
• Invoice processing
• Payment
• Expense management
• Perks and benefits

CORs should include a reliable classification service. In recent years, governments have begun to regulate employment more closely to prevent the misuse of contractor arrangements to avoid paying employee benefits.

While the COR should assume all legal liability, misclassification can still impact your clients. You’ll likely need to amend the worker’s contract or end their engagement. A reliable classification service like Deel’s ensures you can keep your promises to clients and avoid causing them any setbacks.

Offering global payroll services

Staffing agencies looking to test new revenue models or meet the demands of larger clients may consider running their payroll. Consolidated global payroll streamlines processes across regions, reducing administrative overhead and keeping operational costs low. This ensures payroll doesn’t eat into your agency’s profits, even as you expand into more locations.

Managing payroll tasks in one place means you don’t have to manage different systems or copy across data. You can maintain relatively lean finance teams and reduce labor costs.

Additionally, consolidated global payroll gives your internal team a better overview of all the data, meaning they’re likely to make mistakes or overlook issues. This leads to fewer errors in critical areas like tax withholding or social security contributions, which often incur a significant penalty. For example, the Internal Revenue Service (IRS) charges 5% of any unpaid taxes each month until you catch up on payments.

While this benefit often goes unnoticed, as you can’t see the direct impact, consolidated global payroll also helps you improve the worker experience and retain employees. Half of freelancers admit to stressing about their finances at least once a week. When you can guarantee timely and accurate payments, you can reduce their stress and foster loyalty among team members.

See also: Decentralized vs Centralized Payroll: Pros and Cons

Taking care of HR management

Offering comprehensive HR management can help you win over clients in a competitive market. The challenge is incorporating these services into your operations without driving up costs.

Most providers include at least some core HR services in their package. Leading solutions like Deel provide everything you could possibly need to manage the full lifecycle of employees, including tools for onboarding, compensation, and workforce development.

Here are some of the essential features to look out for:

• A people directory
• Org charts
• Meeting and check-in tools
• Communication and collaboration tools
• Project trackers
• Time and attendance management
• Feedback surveys
• Employee risk management
• Reporting and analytics

Deel has a built-in HRIS system, which includes all the essential compliance management tools. You can add Slack Plugins to build out processes and make them as basic or as complex as you need.

For all your other software, you can count on the Deel integrations marketplace and API. You can connect all your HR, applicant tracking, and finance systems to develop a smoother workflow.

See also: How to Enhance HR Efficiency with Deel HR and Deel IT

Establishing legal entities

You may wish to establish a legal presence in specific regions after reaching a certain level of growth or demand. However, this process requires significant investment of time and resources. In some places, the entity setup process can last months and incur many unexpected expenses.

A select number of providers include entity setup in their services. You can rely on their experts to handle the process, minimizing the risk of setbacks and keeping costs low and predictable.

Deel even gives you the flexibility to mix and match solutions. You can have owned entities in some countries and rely on our EOR and COR services in others. As your needs change, Deel lets you quickly add or end services or helps you establish a legal presence.

See also: Employer of Record Switch: 7 Tips for a Successful Transition

Wow clients with Deel’s scalable solution for staffing agencies

Today’s challenging market means staffing agencies often sink or swim. Scalable solutions are often the deciding factor that enables companies to thrive and grow in a tough economic climate.

Deel is one of the leading global providers with our range of EOR entities, Contractor of Record services, global payroll services, entity setup, and immigration support. You can develop tailored packages from our modules to offer clients multiple choices for managing a contingent workforce in over 100 countries.

Deel customers benefit from:

• Centralized workforce management
• Modular plans with the flexibility to pick and choose by location
• 100+ wholly-owned entities
• Automated global compliance management
• Employee hiring in highly regulated markets like the UK and Belgium
• Contractor hiring, including worker classification and contract management
• Visa and immigration support
• HR extras like equipment setup, background tracks, and more
• A choice of integrations

Looking for a scalable solution that allows you to meet any client demand? Book a 30-minute call with Deel to learn how we can support your digital transformation and drive long-term success.