Why Managed Labor Costs 15-30% Less Than Temp Staffing

We guarantee a minimum overall savings of 15% compared with your current temp staffing provider

Here’s a temp staffing riddle for you: when is $14 less than $12?

Answer: when a temp agency places 10 more people than you need at your plant: 10 x $2 = $20/hr. higher.

And that’s just the most obvious of the hidden costs of temp labor. The cost of our managed labor staffing services is up to 30% lower than the total cost of temps when you consider the “all-in” math.

“All-in” labor cost incorporates the additional benefits of LACOSTA managed labor that you don’t get or pay extra for with temp providers:

  • Increased productivity
  • Higher plant output
  • Lower EMR
  • Discovery of process efficiencies that bring additional cost savings

Here’s how it works.

Why Managed Labor Costs 15-30% Less Than Temp Staffing

When You Want 10 Workers, You Get 10 Workers

When plant, operations and production managers want 10 workers, temp agencies often have to provide 15-25 workers, to guarantee that at least 10 will show up the next day – and sometimes only 6-7 do.

If more temps do show up than are needed, the law requires they must be paid for at least four hours, even if they are sent home early.

There is no downside for the agency in this scenario – in fact, quite the opposite: they generate more revenues and commissions, and their business model depends on increasing hours on site.

There is a better way. With LACOSTA managed labor staffing, when you need 10 workers, you get 10 workers.

When You Want 10 Workers, You May Only Need 7

Because of our LEAN process methodology, the extensive training and cross-training our employees undergo, and the oversight of a dedicated onsite supervisor, our employees are as much as 25% more productive than temps. As a result, seven LACOSTA employees are usually enough to do the work for which you thought you’d need a team of 10.

When your need for workers fluctuates, we’re able to adjust, ensuring that you always have the right-sized workforce – even if this means providing less workers. We always work with the best interests of our customers in mind rather than billing you for as much as we can.

Turnover & Training Costs

Industry average turnover for temp staffing providers is 300% with the best temp agencies claiming to be as low as 100% to 150%. By comparison, we have turnover of 0% to 20% per site because we pay our employees a fair wage, provide strong benefits, 401k with matching, paid time off, as well as issue recurring training to ensure they know how to do the job.

How much do you spend training temps and their replacements? Since they are LACOSTA employees, we train them, so our customers never have to spend time delivering our services.

Higher Plant Output

Here’s where the math gets even better. Increased productivity generated under our managed labor industrial staffing model can boost plant output by up to 30% in the areas where our employees are present.

Click here for a list of the managed labor skill sets we provide

Temp agencies crow about achieving “fill rates” of 93-98%, and “fill time” but what good when you’re getting more or less bodies than you need, plant KPIs aren’t improving and your resources are tied up training their people? LACOSTA instead aligns our KPIs to yours.

Lower TRIR & EMR Rates

As a result of our training, onsite management, low turnover rate, LEAN methodology, and daily reporting to ensure accountability, LACOSTA workers have fewer safety incidents and are incentivized to improve the safety environment.

In fact, our total recordable incident rate (TRIR) and experience modification rate (EMR) are both below 1. Because all workers that we provide are LACOSTA employees, we may even lower your TRIR and EMR, especially if any temps you’ve hired have been hurt on the job.

LACOSTA Employees Find Customer Savings

Our team is invested in your success, which means our employees are often responsible for identifying opportunities for our clients to reap additional savings and efficiencies. Here are a few examples of savings discovered by our employees:

  • We saved a customer $4 million per year by consolidating products from 5 offsite warehouses into 4
  • We increased waste reclaim up to 50% for a paper mill
  • We eliminated weekend shifts for a manufacturing firm by negotiating more weekday deliveries from their trucking company
  • We retooled a consumer product company’s loading processes to eliminate a practice that tended to cause product damage costing tens of thousands of dollars per year

The False Economy of Industrial Staffing Temps

If you consider the “all-in” costs of temps vs. managed labor, the formula shows why we typically cost 30% less than temp agencies:

Labor Model
Temps
LACOSTA Managed Labor
Hourly Rate*
$11-12
$13-14

# Workers Needed
10
8*

Sub-Total**
$229K-$250k
$216k-$233k

Training Costs***
$15k-$30k
$0

Sub-Total
$244k-$280k
$216k-$233k

Savings Discovered†
$0
($10k-$100k)

Total
$244k-$280k
$133k-$206k
  1. * Average for tier 1 skill set workers
  2. ** Annualized
  3. *** HR employee salary of $60k/yr. spending 25-50% of their time on training
  4. † It is common for LACOSTA employees to find $10,000 to $100,000 in savings and there have been several cases where $500k to $1 million+ were found; this savings does not include the value of up to 25% more plant output and any safety incidents affecting LACOSTA’s EMR (not yours)

The best part: this formula holds even when we replace temp agencies, and hire some of the former temps as LACOSTA employees. It’s because of our experience and efficient managed labor process, honed over 45 years.

We’re the company you turn to when temps fail and, with LACOSTA managed labor, there’s never any risk of co-employment.

Contact us to learn more about managed labor industrial staffing