Now is a great time to be working for a staffing firm. Many for-profit companies are unwilling to commit to full-time employees in the current economy, what with the benefits, vacation days, and long-term contracts involved. Instead, they are increasingly turning to staffing firms for temporary workers – and job hunters, in turn, are looking to such firms for placement.

In fact, a study by Addison Group found that half of job-hunters use staffing firms in their searches. And according to ASA reports, staffing companies created the most jobs of any industry from June 2009 until July 2012.

But there is one problem: It can be difficult for staffing firms to manage these employees. In many situations, staffing firms and their employees remain affiliated even after the latter has been placed. The company often pays the staffing firm directly, and the firm then pays the employee from that amount. And so, in order to maintain a positive reputation among their clients, staffing firms have to manage an ever-changing workforce of remote employees.

So, what can staffing firms do? How can they ensure that their employees are top-quality and well placed in their positions? It all comes down to these two important factors: correct hiring procedures and rigorous time tracking.

Hiring Procedures

Because staffing firms are not involved in the day-to-day management of their employees, hiring is critical. As a staffing firm executive, this is your only chance to assess the quality and skill set of your applicants. It’s possible that your employee is reliable and high quality but unsuited for the job you are trying to fill. Or else they are suited for the role – but they aren’t high quality or reliable. How do you make these sorts of determinations?

Here’s a tip: do not rely on solely on an interview. In many cases, the interviewer just tries to get to know the interviewee through rambling, unstructured conversation. While this is a great way to make friends, it is not a reliable way to figure out an employee’s experience or skill set. In fact, this classic study found that interviews were little better than a coin flip at predicting whether or not an employee will be a suited for a job. In 2010, Lunenburg found that “despite its widespread use, the interview is a poor predictor of job performance.”

Why are interviews so unreliable? Well for one thing many factors cannot be measured in an interview, including technical skills, physical skills, intelligence and attitude. Additionally many interview questions are vague and unrelated to the needed skills, and there is often no script or scoring rubric to ensure that the necessary questions are covered.

So if interviews are unreliable, then how should you assess applicants? One way to go about it is with aptitude tests. Unlike interviews, aptitude tests measure the applicant’s skills in a structured and rigorous way. You should test your applicants in several different areas, including cognitive ability, and working and cultural preferences.

Before administering the tests, have in mind which responses the position requires. Does the role necessitate advanced math skills? Or is it a more communications-based job? Is the company’s working environment laid-back or strictly managed? Does the company value dominance or teamwork more? Having some idea of the correct answers for the target position will help you score these assessments.

Additionally, if you have the applicant take these assessments first, you can then base your interview questions around their responses. Did the applicant test as more conforming than the target company would like? Ask them about a time where they had to step up as a leader. Did they test as more math-minded than communications-minded? Ask them about a time where they had to communicate effectively with a large group of people. This way you’ll be able to figure out if your applicant can handle the specific requirements of the target job.

Time Tracking

Once you have placed your employee with a company, you still need to track their time. While the company’s on-site manager is in charge of your employee’s daily activities, you are still in charge of their payroll – and in some ways, their productivity. You want to make sure that your employee is staying on track so that the employer will come back to you the next time they need to hire a temporary worker.

So how can you stay on top of your employee’s time management? First, invest in an electronic time tracking system. This system should allow you to track time and expenses, automate cost accounting, measure work profitability, bill the client company, and pay your employees. Additionally, consider investing in a program that will allow you to employ variable rates. Because not all employees will be working every month (depending on whether or not they are placed in a position) there will be some variability in your payroll.

Once you have a time tracking system in place, keep track of your employees’ productivity. Employees should input their labor hours on all projects on a daily basis or more frequently if possible. Eventually, this data will provide visibility into per-project, per-employee profitability. You will be able to see how productive your employees are for individual projects as well as the profitability of those projects.

If your employee isn’t maintaining a certain level of productivity, let them know. Your employee should be motivated to succeed in their temporary position, especially considering that your firm has the ability to help them find their next position. Motivate them to increase their productivity through either incentives or penalties. Additionally, get in touch with the employee’s superior to discuss the productivity situations; the superior will most likely be pleased by your involvement.

Staffing firms are a booming business right now. But managing employees can be difficult, especially when those employees are remotely based. Fortunately rigorous hiring practices and time tracking can help staffing firm executives hire and manage their employees effectively.

About The Author: Curt Finch is the CEO of Journyx. Journyx strives to be relentlessly creative and to build tools that help you spend your time on things that matter. After all, time is all we have. Founded in 1996, Journyx offers customers two solutions to reach the highest levels of profitability: Journyx – project, time and expense tracking software – and Journyx PX – resource management software that provides work and financial forecasting for a complete picture of project and budget status, employee time and availability. Connect with Curt on Google+.