For a temporary staffing business, getting to know a new client isn’t just about delivering better service and expanding placement opportunities. It’s also about empowering the staffing firm to manage the unique risks of working with each client. Developing a clear, consistent process for studying new clients is an important strategy for reducing costs and improving financial performance.
Each staffing business faces challenges that are unique to it and the industries it serves. A strong know-your-customer program typically assesses clients from at least two angles: financial trustworthiness and employee safety. Each of these umbrella topics covers a number of distinct processes that will make sense for many firms. Always bear in mind that the goal of a know-your-customer process is to identify risks so a firm can make informed choices. If a process uncovers a serious problem, management can evaluate whether going forward with the relationship makes sense in light of it.
Assessing a Client’s Financial Trustworthiness
A client’s financial trustworthiness should be assessed at an early stage in the relationship. A staffing business assumes a lot of obligations on the client’s behalf. If the client doesn’t pay its bills on time, or not at all, the consequences for a staffing firm can be significant. Beyond paying bills, a client’s financial wellbeing can also affect its relationships with other vendors, like insurers and important customers, which can indirectly impact the staffing firm and its employees. Some common financial due diligence steps include:
- Obtaining a credit report, such as those maintained by Dunn & Bradstreet.
- Asking for third-party references, such as from the client’s other vendors.
- Requesting disclosures about the client’s history with bankruptcies.
- A study of the client’s industry to identify significant trends that might affect the client’s business.
Assessing a Client’s Workplace Safety
Keeping workers’ compensation claims costs under control is essential for the long-term success of any temporary staffing firm. Understanding conditions that employees will encounter inside a client’s facilities is crucial for identifying potential problems. Once hazards are understood, a firm can implement special training or work with the client to improve safety standards. As part of this process, a firm should consider the following steps:
- Review of the client’s safety manuals and policies.
- Examination of job descriptions to verify that the client supplies all necessary safety equipment for the required tasks.
- Review of any OSHA reports.
- A report of the client’s historical workers’ compensation claims or losses, looking back at least three years.
- An on-site inspection of the places where the staffing firm’s employees will actually work.
- Interviews with managers who will have responsibility for safety oversight during a placement.
Gunnin Helps Staffing Businesses Craft Better Risk Management Policies
Gunnin has served the insurance and risk-management needs of clients in the temporary staffing industry for decades. We can help your business develop a strong, practical process for getting to know new clients. Call us today to learn more.