The value of using an agency

Last week I was approached by an owner of a local construction company. He was ready to start his project but was shorthanded and asked if Construction Personnel Group would help. Within three hours I was on his site and had completed my needs assessment. He committed to needing three guys. He signed my paperwork and we shook hands. It was then that the conversation took a left turn. He said to me, “Call me in two days and I’ll let you know what we are doing for sure.”

Two days later – at the appointed time – I made the follow-up phone call and got the response, “Give me another day and I promise, I’ll know for sure”. Only then did it occur to me what was going on. He had placed his own classifieds and was desperately interviewing trying to fill his own positions. Meanwhile, the start date was looming and he was spending all of his time doing the exact thing that he was paying me to do for him.

Truth: It is somewhat difficult for me to compete with you – especially if you place minimal value on your time. If you’re the type of person who would rather change your own oil than pay someone $29.95 to do it, then it is possible that you would have a difficult time seeing the dollar value of our service. Most managers generate between $100 and $300 per hour for their company. My recommendation is that you go generate money for your organization rather than trying to save a $5 or $6/hour fee. Our greatest value to you comes when you let us do our job.

I’m a numbers cruncher, so let me give you another example. For years I ran a remodeling company. Sometimes we would deconstruct something where a lot of the materials would be salvageable. Take a 2×4 for example. A new one costs about $3. In my company, a lead carpenter might produce $500,000 a year by himself. That means his time is worth about $4.17 of revenue/minute. Why do we see so many perfectly good 2×4’s in the dumpsters? Because the three minutes it would take a lead guy to pull nails out of it would cost $12 of revenue. The same principle holds true when a project manager or owner spends his/her day conducting interviews. My recommendation: go produce something.

I think the biggest mistake you could make in hiring us would be to spend your own time and resources first; only using Construction Personnel Group as a backup plan. Using this method you will have paid twice for the tradesman that you end up hiring from us. A more economical approach to using an employment agency would be to retain us first. Give us a fair shot at filling the opening. If we are unsuccessful, you have lost nothing and it would then make sense to invest your own time into the process. If we are successful, then you were probably out earning your company $250/hour so you’ll be that much further ahead of the game.

The story I opened with ends well: I explained to this particular manager that I would go to work for him as soon as he was actually ready to hire my people when I produced them. He agreed to stop interviewing. And within 24 hours we had successfully placed two guys on his job. They have both been there three weeks so far and his project is moving along well.

Many of our readers are number crunchers as well. I would love to hear what you think of my numbers. How much does a manager in your organization produce?