The Use Case Podcast: Storytelling About Advance Partners With Jeremy Bilsky

Music:  00:02

Welcome to Recruiting Daily’s Use Case podcast. A show dedicated to the storytelling that happens… Or should happen when practitioners purchase technology. Each episode is designed to inspire new ways and ideas to make your business better. As we speak with the brightest minds and recruitment in HR tech. That’s what we do. Here’s your host, William Tincup.

William:  00:25

Ladies, gentlemen, this is William Tincup and you’re listening to the Use Case podcast. So today we have Jeremy Owen from Advance Partners, and we’re going to be learning about the business case or the use case for Advance Partners. So, Jeremy do us a favor, the audience a favor and introduce both yourself and Advance Partners.

Jeremy:  00:45

Great. William, thank you for having me. Jeremy Bilski, I’m the senior director and general manager for Advance Partners, been with the company for going on 18 years, in a variety of different roles. Now, the leader for the last couple years. And what does Advance Partners do? We provide financial services, consulting partnership in the way of strategic services, credit support, cash application. In some cases, we also do payroll processing and invoicing, all for the temporary staffing industry. We have been supremely focused on staffing for the entirety of our 23 years in business.

Jeremy:  01:30

And why staffing? Because staffing has an acute need, but particularly when we got started for the type of services that we offer, particularly the financial piece. Because, anybody who spent 10 minutes in a staffing firm knows that, the more you grow, the more cashflow negative the situation becomes. And the need for capital to be available week after week, day after day is imperative. In order to meet the obligations of both the temporaries that you employ, and the users, the work sites, where you’re sending these folks, who are going to be demanding more and more people every week, but aren’t going to pay for 30, 45, 60 days. So, that’s where a company like ours comes in and helps bridge that gap. So, the staffing firm doesn’t have to say no. “No, I can’t supply you any more people until you pay me, because I don’t have the capital to do it.” We fill in that gap and provide the capital and support in order for them to not say no, which is one of the reasons that we exist. And, have been doing it for all these years.

William:  02:41

It’s interesting. The first time I got introduced into this a long time ago, we’ll just say, and he was actually a gentleman that ran a staffing firm in Charlotte, and he was talking about factoring. And of course at the time, I was, I had a different concept of factoring in my mind, right? And so, he said, “Oh no, here’s how this plays out. Basically, we take on the labor cost, and then we invoice, and then we have to pay the staff. We have to pay employees, we have to pay the workers, et cetera. And then, depending on the size of the company…” Again, this is 20 plus years ago. “If it’s a large company, it was plus 120.” It was this these crazy numbers.

Jeremy:  03:30

Yep.

William:  03:30

And he goes, “The larger the company, the more net that number is larger. The smaller the company… Et cetera.” And so, either you have the working capital to do it, or you got some type of financial institution, or you got a line of credit, which of course, as a staffing firm is hard to get, is a line of credit as a business, because you don’t have assets. You don’t have what banks consider the hardcore plant, property, and equipment type assets. And so, that’s where I got introduced into factoring. And so, y’all, obviously I don’t know if you do that or not, but you provide the service that blends that gap between, “Okay. You want to staff? Fantastic. We’ll staff that for you.” We have to pay those folks, because they are going to get a daily, or weekly, or whatever the bid is. They’re going to get paid. So that money comes out of the bank. And yet, we’re not going to get the money or receive the money from the client for, could be weeks, could be months.

Jeremy:  04:34

Yep.

William:  04:34

Et cetera. So, take us a little bit into the different types of products that y’all have for staff-

Jeremy:  04:42

Yeah. So, it’s funny, I have a unique sense of humor, at least I think so. And I used to call it the other F word, factoring. Which people have had a negative stigma about for years, which I don’t completely understand, but I guess, maybe I’m too close to the situation to see the stigma. But, that’s exactly what we do. We factor accounts receivable.

William:  05:08

… Right.

Jeremy:  05:08

So, for those not familiar with what that means, we purchase the accounts receivable that the staffing firm presents to us each week at a high enough advance rate percentage to cover the pay payroll costs the wages, the taxes, the insurance, et cetera. So, they can meet the demands each week, staffing firms typically pay weekly. So, it’s a weekly cycle. And while it can seem like maybe Groundhog Day at some point where week after week, we’re doing the same thing, that’s exactly what it needs to be. Because, every payroll that goes through every invoice that is issued, the staffing firm has a greater dependency on a firm like ours, if they want to continue to grow.

William:  05:57

Right.

Jeremy:  05:58

And, meet the demands that end user, the user of the labor. “I want 5 people this week. I want 10 next. I want 15 the week after.” Like I said earlier, the staffing firm wants to be able to deliver and not say no. So, that’s exactly what we helped them with this financing product. We also have a separate product, which we call full service, where we do all of that, that I just described. But, the paradigm is a little bit different. The client submits the time that the temps work into our hosted software platform, we suck in that data. We generate the invoices off of that work being performed based at the prescribed bill rate that the client is working under, pay the temps, and we process the taxes and prepare the invoices as well.

Jeremy:  06:53

It’s definitely more of an outsourced model in that regard, the full service piece, because we’re doing a lot more. Think of it this way, William, you could be… And this is what we talk about a lot with our clients on both product lines, you’re outsourcing quite a few elements of your business to us in addition to financing with each of these products. The full service product, you’re outsourcing a little bit more. And then, you have to look at your cost structure and say, “Hey, because I have you doing my payroll. Instead of needing one payroll manage… Two payroll folks, I only need one. Because the one that is going to work with you guys in advance, is just going to be submitting the time in. And then, you guys do the rest.” And, it’s a cost benefit analysis to figure out what’s going to make most sense. Either way, they have the freedom of choice to choose between the different product lines, which is something we really like.

Jeremy:  07:54

Sometimes, when a startup firm comes in, they don’t have the knowledge, frankly, they don’t have the capital, perhaps to do as much on their own. So they might come in and say, “Let me use your platform. You guys do the full service. That’ll save me the time.” And in some cases, agony, when they’re learning the business to figure this stuff out, “You handle the invoicing, the financing. I’m just going to go find the people and sell.” And then, it works very nicely. And, it’s not necessarily something that you graduate from. I wouldn’t say that at all. Some clients really like it and it becomes the fabric of their business and Advance Partners does what we do. And, they do the rest. And then, other times, they’ll say, “You know what? We’re ready to take this on. Maybe we want to look at a different software platform or…” What have you?

Jeremy:  08:47

And then, that’s fine. We continue to do the financing, the credit analysis, the collections, the cash applications, all the things we do on the back end for both product lines. But those clients handle the payroll processing. Maybe they hook up with a company like Paychex, who is near and dear to us. They’re actually our parent company that purchased us almost six years ago. And, they have a tremendous appetite for the temp staffing market, and all the other ancillary services that they offer.

Jeremy:  09:21

And, that might become more available to a client of ours, if they have us do what we call funding services, and they have a third party, a Paychex. Who’s not really a third party to us, because we’re one of the same. But, there’s additional opportunities there to add additional services, maybe through a player like that, that has a 100 different products, outside of just the financing that we offer, so.

William:  09:47

Right.

Jeremy:  09:49

We really try to put our clients in the best position, where they can get what they want. Because at the end of the day, honestly that’s what makes us the best partner we can be, by suggesting that they go in a direction that’s going to benefit them the most.

William:  10:05

Right. For folks that maybe haven’t worked at a staffing firm, or even haven’t interacted with a staffing firm. Typically, there’s two main parts. One is on the business development side, it’s going and getting clients. So, you’ve got folks that are really good at attracting clients. So they go out and they find those clients, they find those contracts, they get into those deals, et cetera. The other half of the organization, if you will… And sometimes these are the same people. So, it might be Jamie or Billy that goes out and gets the client. And it also works the back half of it where they fill on those positions, so they staff. And whether or not it’s temp, or perm, or any of those types of things. It’s, you’ve got to get the client, get a deal in place, and then you’ve got to fulfill on that. And then, again, some of that, it’s weekly. Some of that goes over a longer period of time, but that’s essentially how staffing firms work behind the veil is they’ve got to go get clients, and then they’ve got to go fulfill on whatever agreements that have been sold.

William:  11:18

Jeremy, I’ve never understood the stigma of factoring. It just makes a business sense. Again, unless you’re sitting on a ton of capital, there’s just a better way, that again, you’ve got to go back to, what makes a staffing firm? You got to go get clients, and then you got to go fulfill on the contracts. This other part about money. Well, the people that you have as employees, and the folks that you put in the field. Yeah, they all have to be paid. And, I think factoring is just a mechanism to help you get there.

William:  11:59

I want to go into the deeper part of, either one of the services. But basically, when you purchase the receivables… I’m assuming you do that at somewhat of a discounted rate to where it makes sense for you and it makes sense for them as well, so there’s that. But, do you take over the receivables part of that business? Are, y’all the one that actually talks to the customer, the client, and then does the invoicing, and follow-up, and make sure… If it’s with a VMS, going through that process. All of that stuff. Do y’all take care of all of that to make sure that you get paid?

Jeremy:  12:40

Well, you just open up a can of worms with VMS.

William:  12:43

I know. I know. Sorry.

Jeremy:  12:45

No, no, no, don’t apologize. Don’t apologize. I’ll get to that in a second. Generally speaking, we try to play to the beat of the drum that’s presented to us by the client. Some clients will say, “Hey, Jeremy, I hate dealing with collections. I’d rather you guys deal with it and just get after it.” Obviously, courteously, we’re always very sensitive to the fact that when when we engage in collection activity, we’re calling on our client’s client. This is not smile and dial third party collections, the classic, just no holds barred, nonsense. We don’t do that, but we have clients who want us to roll up our sleeves and manage the process.

Jeremy:  13:29

We have other clients that, “we want you to get involved when we need you.” Rather, have you be a little less visible. We have some credit folks that handle these activities. That’s fine. Again, we want to give the client what they want and need. Obviously, with the understanding that we retain the ability to get involved when we need to contractually, because we’re buying these receivables, we own them. And obviously, we have a financial interest. Our interests are a 100% aligned in getting paid too. And we have to feel comfortable that we are to be paid. Interestingly, on the VMS piece, what was a VMS 10 years ago? Well, we knew what it was, but we didn’t really care about it that much, because they were just coming on the scene, and we’re not nearly as adopted as they are now. And what we found 10 years later, give or take, is we have a team of people that are self-taught experts on these different systems.

Jeremy:  14:46

I was talking to someone in our department that handles our VMS interface. We have over 800 that we deal with. Which, I didn’t even know that, that existed. And obviously, you have the household brands, Fieldglass, IQN, Beeline. The ones that we all know so well. But then, we have one off deals here and there. And what we’ve found is… And, I don’t think this is such a revelation, but in order to maintain the integrity of the receivables that our client and we are collecting together, that’s their revenue, and this is what we’re purchasing each week.

Jeremy:  15:30

So, we obviously have a huge interest in getting right information, that if you’re not pulling the information directly from the BMS, love it or hate it, that’s the system of record that’s going to tell you what you’re going to get paid, what you’re not going to get paid, who worked, who didn’t, et cetera, et cetera. And, it’s the great authenticator of everything that’s going to happen, it’s going to tell a story. Yeah, they got to pay you, but they’re not going to pay you if it’s not in the system, ever in existence. So, we’ve really gone to great lengths to build up our team in that regard. And work with our clients too, and educate them, and listen they’re educating us too. 811 different platforms, we don’t know all of these platforms.

Jeremy:  16:21

So, we might say, “Hey, you’re coming on board with us, help us figure out the lay of the land.” Some are more intuitive than others. But the bottom line is, having an understanding that, if you’re not going to wrap your arms around the VMS situation, and really learn it, and deal with it, then you’re not going to be very successful supporting the staffing firm in our position, and also getting paid. Which at the end of the day, if we don’t get paid, then we’re all up a creek.

William:  16:54

That’s right.

Jeremy:  16:54

So, we’ve really come a long way in that regard. And, I actually expected the adoption rate over the firms that we deal with, the clients of our clients, if you will, I thought the adoption of VMS would be even greater than it is right now. But as it stands right now, we’re looking at about 40% of the transactions that we’re dealing with over the totality our client base, as dealing with VMSs. And, that’s a number of transaction that’s in the billions.

William:  17:33

Right.

Jeremy:  17:33

So, it’s big. I mean, it’s big. And, if you’re not going to get on the VMS train, then you’re probably not well suited for staffing or factoring for staffing firms.

William:  17:46

And, it’s a gateway to procurement. And, if you can find how to work the procurement Rubik’s Cube, then again, it helps you get paid. I mean, no one’s not trying to pay you.

Jeremy:  17:59

Sure.

William:  18:00

There’s that myth, and it’s just a myth. They want to pay you. They just want to make sure that they’re paying you for what was going to consumed, et cetera. Let me get your take on a couple of things. One is, this movement of daily pay. And you see this on a lot of the gig working, Uber drivers that tab out at the end of their shift, et cetera. But, you can also see this on a lot of things that are moving into other pay. In fact, I’ve seen mechanisms for people that are accountants, professional workers, they can get paid for, at the end of their day, as a salaried employee. Have y’all had discussions from you with your clients about the frequency of pay, and if that looks like that’s changing?

Jeremy:  18:54

We’ve had this conversation not to adopt the word… Use frequently on the frequency of pay. It’s a thing. And I think it’s something that transcends not just our industry, but the labor force in this country, in general.

William:  19:12

Yeah.

Jeremy:  19:12

People want to get paid sooner. Unfortunately, a lot of people need to get paid sooner. And, why should I have to wait two weeks to get paid for something I did a while back. The money’s just sitting in the… It’s a liability on my employer’s balance sheet. Why can’t I get paid sooner? I know that’s getting a little more technical, but we’re seeing this frequently. We’ve seen it a lot during COVID.

William:  19:40

Right.

Jeremy:  19:41

A number of clients we’ve seen, where they’ve been able to accelerate the pay to their staff. It’s a differentiator. It’s helped them get more temps. Particularly in the medical space, the staffing space… Or the nurse staffing space, where there’s such a scarcity, as I’m sure you know.

William:  20:05

Right.

Jeremy:  20:05

What a great way to differentiate yourself by paying every day. Go complete a shift, punch it into the system, and get paid. So, we have seen that, and I know this is something that’s… It’s been a hot topic in the overall payroll market, which we have a bird’s eye view of that working with Paychex.

William:  20:25

Yeah.

Jeremy:  20:25

Because, they’re paying, I think, 1 out of every 10 or 11 private employees in this country. And, that’s being asked of them too. They have partners that they’ve worked with on that. And, it’s a common topic of conversation.

William:  20:41

That’s interesting.

Jeremy:  20:45

I don’t want age either one of us. But, I think before your career and my career over, I think it’s going to be more commonplace for average schmos like us to get paid sooner.

William:  20:55

Oh, 100%.

Jeremy:  20:55

Maybe, just because that’s where it’s going.

William:  20:59

Oh, yeah.

Jeremy:  20:59

I think it’s heading that direction.

William:  20:59

And, that puts more of an emphasis, again, in getting back to a traditional staffing firm of focusing on getting business, and then fulfilling on that business, which is the core of any great staffing firm, is doing that.

Jeremy:  21:14

Yep.

William:  21:15

Now, you add in your own employees, and the folks that you’re placing, they want to get paid in a frequency that actually puts even more of a capital constraint on them, because they don’t have that money in their account, yet. So, I think, it actually positions the fact that society is moving in that direction. I think it actually helps Advance Partners, just positionally, to be able will to fill and actually help staffing firms differentiate, but also just do what’s in their clients’ and their employees’ best interests.

Jeremy:  21:56

I agree with you. And, I think that a big element of this whole situation, this early pay, or more frequent pay.

William:  22:08

Right.

Jeremy:  22:08

It’s about the cost, who’s going to pay for it?

William:  22:11

That’s right.

Jeremy:  22:12

Because right now, Fortune 1000 companies are laying back and paying people generally two weeks in arrears, they’re getting a free ride.

William:  22:20

That’s right.

Jeremy:  22:20

Yeah, it’s a liability. But, if they have to accelerate that by a week or two, there is a cost associated with it.

William:  22:27

That’s right.

Jeremy:  22:29

And, it’s no different in our space here in staffing. Wouldn’t it be nice to clock out on Friday and get that direct deposit that night heading into the weekend, rather than waiting a week in arrears. And I’m sure you’ve thought about this too, once you start that cycle, we’re most commonly… Generally, people are used to getting paid in arrears. Once you start that accelerant, if you will, it’s hard to get off that merry-go-round. So it’s got to be something that’s sustainable too, because people are going to build their lives around… Yeah, that first week you’re going to feel like you got paid twice, but then, every week thereafter, then you’re in that cycle.

Jeremy:  23:10

So, there’s got to be considerations to the cost associated with it. And, I tend to agree with you too. I think that it makes a company like ours, more relevant to that conversation, because the money isn’t just going to come out of nowhere. It most likely needs to be financed.

William:  23:33

Right.

Jeremy:  23:34

I don’t necessarily think that the staffing owners are going to want to pull that out of equity, and pay that out, which they can’t-

William:  23:43

I was about say, even if they could.

Jeremy:  23:45

… Right.

William:  23:45

I don’t think they’re going to want to.

Jeremy:  23:46

No.

William:  23:47

Last question, Jeremy.

Jeremy:  23:49

Sure.

William:  23:49

And, this is just my curiosity, more than anything else is, as y’all look at risk factors, when you take on a new account or a new client, or even a new type of staffing firm, et cetera. And again, no specifics, but what’s business that you would say no to? What would be something you just can’t do it, or you can’t do it yet? Is it the newness of the firm? Is it the type of worker that they’re placing? You’ve had to say no to business over your 20 years there. So, at one point you’ve had to say no.

Jeremy:  24:27

Yes.

William:  24:28

What led up to that?

Jeremy:  24:30

I will tell you that the most common reason that we say no, is not necessarily the type of business that the firm is engaging in, unless they’re doing business with clientele that it’s just for 100% un-creditworthy.

William:  24:50

Right.

Jeremy:  24:50

What usually happens, even before it gets to that, is it’s… This is relationship business. This is about building that personal connection with the prospect to become a client. And, we’re looking for people that we can partner with, people that there’s going to be a mutual respect. They need to have some staffing experience, of course.

William:  25:17

Right.

Jeremy:  25:17

And we’re looking for people who are good operators. That’s a given. But, if we don’t feel great about the people as individuals, as people, it’s tough.

William:  25:31

Yeah.

Jeremy:  25:31

It’s really tough. Because, on both sides of the ball here, this is a unique position of trust. We’re entrusting our clients to do the right thing. They’re entrusting us to do the right thing, deliver the capital each week after week, do all the things we say we’re going to do. And, both parties need to feel really positive and good about that. And I would say that, that would probably be where… When we have to say no, we don’t have a great feeling that, that they’re going to respect the relationship, and/or that they lack these experience to be successful. And, that’s not to say that we don’t take people that don’t have experience. Of course, we do.

William:  26:12

Yeah.

Jeremy:  26:12

Everyone needs a first chance. But, I would say character even supersedes that, if we don’t feel great about them. And that’s one of the reasons we try to get in front of people in person, which is why the last year and a half’s been so challenging. We want to have lunch, we want have a drink, we want to have a dinner. “See the office. Come to our office.” Really connect, and talk shop. “Let’s talk about staffing.” Because, we know a lot from vicariously living in it for 23 years, but we want to learn from them and really get educated in ways that we already haven’t been, so we can stay relevant, and be a good partner. And, it’s important we have someone that’s like-minded in that regard.

William:  26:57

Brother, this was awesome. Thank you so much for taking us into this world, because it’s not something we talk about on a daily basis. But, this is the stuff that makes the machine go. Absolutely appreciate your time today, Jeremy. And also, thanks for everyone that listens to Recruiting Daily podcasts, and especially the Use Case podcast. Just thank you.

Jeremy:  27:18

Thank you, William. It was great talking to you, and I hope we can do it again.

William:  27:21

Absolutely.

Music:  27:22

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