During this time of economic stabilization, you may breathe a sigh of relief that you withstood the headwinds of 2020 in staffing. Have you thought about how you will keep your business strong as corporate hiring slowly hits the restart button? Where will you look to develop new revenue streams in 2021? Many in staffing would wince at the thought of chasing government business. After all, it conjures up images of a massive machine that is cumbersome and downright arduous to demystify. Believe it or not, there are some advantages you may not have considered.
Why Pursue Government Business?
Government business minimizes the impact of an economic downturn in staffing and is a good diversification to your commercial business. Even in economic uncertainty, the government is required to provide many basic services like public safety and infrastructure to the community. The need to staff these critical functions means staffing companies will always be needed. In addition, many state and local entities buy contract labor instead of utilizing permanent resources to avoid lengthy hiring processes mandated by civil service or state laws. For staffing companies, this creates a lucrative environment to increase contractor headcount.
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Another known advantage of doing business at the federal, state, or local level is long term Master Services Agreements usually over a year in duration. Their agreements with staffing providers tend to coincide with government program awards, so contract labor resources stay on assignment for extended durations. Many staffers also have a misconception that resource bill rates in the public sector are low. Surprisingly, bill rates are equal to and sometimes better than the private sector. Along with equivalent bill rates, skills sets typically needed for commercial clients are usually the same skills used in the government space. This discredits the myth that government only uses outdated and antiquated technology and expertise.
Many staffing companies ignore the public sector because they think it will be difficult to gain entry and provide staffing services. State and local municipalities often have low barriers to entry. Many either buy off of a state contract or will write their own contract to work with a staffing provider. The process varies from state to state, but it is often easier than you would think to do business. Ask their leadership and procurement what it takes to do business with them and provide solutions to their pain points. Many municipalities are decentralized and have their own Technology, HR, and accounting teams so be certain to meet all the applicable buyers, and you will be on your way to new business.
Have you ever had a client not pay or slow pay your organization? Many have encountered that over their tenure in staffing. The good news is that government typically has timely invoice payments due to structured budget cycles and a rigorous PO process. Payments are on time and don’t require constant follow up. A final reason to entertain government business is reduced competition. Most staffing suppliers focus on the commercial sector and minimize their reach into the public sector. As a result, many state and local municipalities are often open to meeting and partnering with staffing providers because they need options to staff their projects and initiatives.
A New Perspective
Don’t assume that providing staffing solutions to the government is unwieldy and unprofitable. The government needs contract resources to fuel their business just like the private sector. With solid skill sets, rates, payment terms, and low barriers to entry, adding government to your client portfolio can be a great diversification.