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Take Home the Gold in 2014 when you Stay Ahead of These Staffing Trends

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Mentally Prepare, Physically Train, Gloriously Fail. Get up. Repeat. And Keep Going for the Gold.

This year’s winter Olympians have done that all their lives. Truly great players like Kesler, Carlson and Quick show us how to look to the future, how to train, how to improve. And ultimately how to make a vision a reality… like playing on the 2014 U.S. Olympic Hockey team.

Here at Bond, we are honored to bring the best staffing and recruiting software to staffing pros who are poised to take home staffing gold this year. They have been studying the trends driving the industry. They dial-in and not only react, but predict and deliver what is needed in order to drive efficiencies into their staffing businesses.

With them, we have identified 5 trends which we feel ALL staffing and recruiting pros should study, and plan for carefully.

Could this year be a “Miracle off the Ice” for you? Get ahead of these 5 trends and claim the gold for yourself!

 

Staffing Trend 1 – The Need to Cast Wider Nets to Recruit Talent is Growing

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In order to achieve great results, champions know no bounds. This approach to the game is what moves NHL greats to Olympian status.

Today’s recruiters face the same opportunity. To score the best talent, recruiters must not see obstacles. Rather, they need to set up wider nets.

Even with the unemployment rate of ~7 percent, talent seems to be scarce. According to Price Waterhouse Coopers U.S. CEOs are sharing that a shortage of skills is a potential threat to growth.

Staffing firms can get ahead of this trend by using social media, video interviewing, and actively courting qualified referrals.  Managing the deluge of candidates found through these (and other) methods can be done more efficiently with well selected recruiting software.

 

Staffing Trend 2 –   Labor Pool Access is More Open – Yet Challenging to Manage

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From a VERY deep talent pool, only 25 players were selected for the men’s U.S. Hockey team. It wasn’t easy and it was definitely a thorough process.

Likewise, recruiters have few boundaries and lots of access to candidates especially online job seekers (and non-seekers). With the growth of social recruiting (from 56 percent of employers in 2011 to 77 percent of employers in 2013) the addressable labor pool has grown at staggering rates. But let’s be honest, bigger has not necessarily meant better.

The opportunity for recruiters is to invest in the right systems, processes and recruiting software designed to rapidly source qualified candidates, especially those with a high degree of specialization.

 

 

Staffing Trend 3 – Mobile Recruiting is Becoming a Must!

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Olympians have heart. They have brains. And bottom line, they have the pure will to win. They are different from most of us in that they persevere when in pain. They get up and keep going when – for most of us – we might prefer to take a nap.

Mobile recruiting will be a key focus for staffers in 2014.  86 percent of jobseekers use mobile phones. 90 percent of job seekers read emails (potentially from recruiters with career opportunities) on their phones. And 82 percent expect to apply for a job via a mobile device.

Will you win market share by developing and enhancing your mobile presence? It means more work than simply maintaining a traditional web presence. For those of us not up to the mobile challenge, it might just be time for that nap.

 

Staffing Trend 4 – Social Staffing – It’s no Secret – Is Here to Stay…and Grow

shutterstock_80672521Suiting up since they were three. That’s the story of most of this year’s U.S. Olympic Hockey team. And to make it this far, they have been dedicated to studying and practicing the nuances of their sport.

While 95 percent of LinkedIn members are open to relevant InMails from recruiters, the magic is finding the right candidate and romancing them enough to find interest in the career opportunity you hold in your hand.

Hiring managers and staffing offices will continue to use social media as part of their recruiting process. But those who study the nuances of social recruiting and learn how to integrate with their staffing and recruiting software will have success courting highly qualified – often passive – candidates.

Some staffing companies no longer require resumes, replacing them with a candidate’s LinkedIn profile. If you haven’t yet, it’s time to study up and adapt to social recruiting. Hit it with eyes of wonder. Like a 3 year old future Olympian!

 

Staffing Trend 5 – Contract Workers are Nearly Doubling

shutterstock_72956344In 2010, 8 percent of U.S. Hockey Olympians were returning to the Olympics. This year over half the team is composed of returning Olympians.

Building bench strength can lead to a stronger future workforce.

42 percent of employers plan to hire temporary or contract workers in 2014, up from 40 percent in 2013. 57 percent plan to increase the number of contingent hires. The reasons vary, but the reality is the same.

Develop the processes and grow the systems to become not only a skilled recruiting agency, but also a staffing firm, with a recurring revenue stream, and you will be relied upon by your clients to fill their contingent workforce.

Study up staffers and recruiters. This year is destined to be a golden year for you. All you have to do is follow the biggest industry trends and setup your business to stay ahead of them.

Sound simple? Well remember to mentally prepare. And know that you may gloriously fail. If you do, get up my friend! Repeat. And keep going for staffing and recruiting gold. 

Sun Tzu and the Art of Engineering Staffing Victory

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In a previous post, I mentioned four key steps in addressing the issue of staffing employee retention. In order to continue that discussion, I thought it would be wise to look at the issue from a micro perspective. One of my favorite books is Sun Tzu’s Art of War and for those of you unfamiliar with it, I would recommend checking it out. It’s one of the most important leadership, strategy, and decision-making books ever written.

I was reviewing my dog-eared and heavily highlighted copy the other day and ran across a section that stood out in terms of defining and achieving victory in the staffing industry. Effectively applying the “Five Factors for Victory” that Sun Tzu spoke about could be the difference between being just an average firm in your market and becoming an elite firm. Ultimately, if you can engineer victories in the field, your people will be more inclined to stick with you. After all, everyone loves a winner.

First, know when to fight

The first factor for victory that Sun Tzu spoke about was knowing when you can fight and when you can’t fight. From a staffing perspective, this is essentially saying that we should all pick our battles and what opportunities to take on. Practically speaking, the firms that successfully take on the roles that are “center of the circle” for their practice will emerge victorious and grow while their competition remains stagnant or declines. Taking on a role for the sake of taking on a role isn’t a winning formula.  If the goal is victory over the competition, it is unwise to try to be all things to all people. Knowing what you can deliver and being able to deliver it means certain victory.

Second, focus resources

The second factor for victory that Sun Tzu spoke about was recognizing how to deploy large and small numbers. In staffing, this is all about working closest to the dollar on the highest margin opportunities. From a practical perspective, it’s essential that sales and leadership have a system in place to determine what the hottest recs are and assign the number of recruiters accordingly. Additionally from a sales and planning perspective, this also means keeping an eye on mid-term and long-term projects your clients have coming up. The ability to have a pipeline of candidates ready to fill roles before the competition even gets wind of the rec is a crucial success factor. The majority of clients I brought to Addison was a direct result of working my project pipeline and keeping my leadership and rock-star recruiting team in the loop on what I had coming up. Do this successfully and you win.

Third, align goals

The third factor for victory that Sun Tzu mentioned was having leadership and the team in alignment on goals, objectives, and desires. This is a critical leadership issue in any firm but especially staffing. We all know what a “day in the life” for us looks like, so it’s essential for leaders within our organizations to be visible, communicate the message, and inspire the troops. The difference between winning and losing an account can come down to the passion your recruiters and sales people have for the firm. If you’re inspiring your people and sharing with them the vision and mission of your firm, you win.

Fourth, prepare, prepare, prepare

Fourth, Sun Tzu noted that those who wait fully prepared for the unprepared to act will always win. From a sales perspective, this is a critical success factor. Your team should be digging in to the weeds about their prospects. They should know what skills the hiring managers look for, what personality types work well with the team, who is planning on leaving, and any number of other things about the firm (and be able to keep track of the information for easy retrieval). I found that asking every hiring manager who their best employee was and their plan if that person left tomorrow crucial to really understanding the manager and the account. Understanding the granular details of what the account is looking for and being prepared to deliver it in “emergency” situations guarantees victory.

Fifth, lead with trust

Lastly, Sun Tzu noted that capable leaders needed to be left alone in order to insure victory. This point applies at all levels of the organization and is especially important from a morale and turnover perspective. Once you’ve determined that the team you have in place is capable and have the tools needed to perform their jobs successfully, there’s no need to micromanage them and map out a step-by-step list of things for them to do. Your role is to inspire and coach. If you fall into the trap of micromanaging, you run the risk of having your star players and even your “steady Eddies” going elsewhere.  If you’re focused on inspiring, motivating, and coaching your team instead of micro-managing them, you will win.

Everyone knows that we’re in the business of selling people to people. In an environment where there are very few quantifiable differences between your firm and your competitors, it becomes critical to really understand what defines your firm as unique. Sun Tzu mentioned that one of the keys to victory is to know yourself and know your enemy. Applying these steps in addition to empowering your teams with the proper tools for battle will insure your victory. Want to win more and more often? Check us out.

 

Future sight: ‘Big data’-enabled staffing and recruiting software to create actionable insights

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The future holds big promises for big data

There has been a lot of conjecture about what ‘big data’ – massive databases of information managed by super-computers and powerful software — might be able to do to improve virtually every aspect of our lives. IBM, for example, has recently released its ‘five in five’ predictions for Innovations that will change our lives in the next five years, and these five innovations have amazing potential. But closer at hand, and more relevant to we in the staffing and recruiting industry, is how ‘big data’ can be used in the future to improve business processes, efficiency, revenues, and profits.

From today’s ‘regular data’ to tomorrow’s ‘big data’

Today, through the innovation of recruiting software technology and inclusion of new processes, we are able to evaluate information in near real-time. With that ability managers can consider the merits of a data set compared to past data and decide whether a course of action is appropriate or needs to be altered. Taking those small steps further into a giant leap in the future, staffing and recruiting professionals can see how big data has the potential to have a transformative impact on the success of candidate resourcing strategies and customer care, as well as sales and operational processes.

The future of comprehensive staffing data solutions

Data is a paramount source of information. While many staffing firms use a wide variety of separate staffing and recruiting software systems across the enterprise, such as an ATS system, Customer Relationship Management system and a Payroll system and another Accounting System, it has been difficult or prohibitively expensive to even consider integrating them. Big data-enabled software will herald the end of silos of information that hinder the overall development of real-time solutions. Data should available so that information analyzers and various systems can find patterns from within the endless configuration of numbers.

Full-enterprise cloud-based staffing and recruiting software solutions are becoming the norm in staffing and recruiting operations for just this reason. The availability of one integrated information process server that can take data from different business functions and processes and enable the creation of a clear picture of a scenario in the past or potential for the future will be crucial to competitive success.

Recently Pinstripe, a recruitment process outsourcing provider, suggested that “the true sign that analytics have arrived in the staffing software space is the presence of visual reporting tools, customizable data relationships and cross-platform data integration in nearly every product. Staffing and recruiting software vendors clearly understand how important analytics are to staffing and recruiting, and they are building analytics functions into their products.” Big data offers far more than just analytics for human use as many describe them. Big data is really about incredibly powerful software that looks deep within the data to reveal relationships, dependencies, and to perform predictions of outcomes and behaviors.

The deployment of big data-enabled staffing and recruiting software systems allow for succinct and accurate decisions make decision-making for staffing professionals much more reliable. Without the comprehensive solutions of the future that are designed to consolidate the various sourcing of information, a recruiting agency or staffing firm will be without a key component in the development of a strategy for their own future.

You can learn more about Bond’s unified staffing and recruiting software solutions by emailing us.

 

Recruiting Software Blog Staffing Insights: John Vanderkin, President of Employers Overload (Part 1)

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To this day, staffing and recruiting professionals, and the general public, are still feeling the effects of the recession.

The employment market has been steadily, if slowly, improving, yet the lingering taste of a recession is still there. As a result, recruiters are using the latest technological developments, like staffing software and recruiting software solutions, to provide relief and to leverage the current job market.

John Vanderkin, President of Employers Overload, an innovative workforce staffing company, spoke with us about the impact the recession has had on the recruiting industry and what trends we can expect to see in the future.

Staffing and recruiting industry impacted by the recession

It’s undeniable that the recession had an impact on the staffing and recruiting industry. After all, when your business is finding jobs for qualified professionals, and employers are slowing hiring, it’s a tough time. However, not all of the effects of the recession were necessarily negative, according to Vanderkin.

“Yes, the recession had a significant impact, both good and bad, on the staffing industry. As the recession began, companies were forced to reduce their workforce and often the first to go were the contingent employees. This had an obvious effect on the staffing industry as well as those contingent employees,” he said.

Vanderkin went on to say that “on the positive side, it created opportunities for a well-run staffing organization to provide strategic consultative support to those companies that could still benefit from a contingent workforce. A good staffing vendor was able to help their client identify how temporary project employees could improve their bottom line and help them address short-term increases to their business while not creating a significant impact to their ongoing labor costs. In many instances, the staffing industry was able to help companies who have never used temporary employees understand and utilize this resource. While these opportunities did not replace the losses from the recession, they created opportunities to minimize some of the impact and to grow the overall staffing client base.”

Employment trends created by the recession

For the staffing and recruiting industry, some firms found some surprising reoccurring trends. According to Vanderkin, the unusual job market conditions and new attitude prevalent in the nation created a unique situation for staffing professionals.

“The biggest trend that we noticed in 2009 and 2010 was the difficulty in getting job seekers to accept available positions rather than staying on long-term unemployment benefits. Through our sales efforts we were able to secure many short- and long-term temporary positions. but many of the candidates we spoke with decided to remain on their unemployment benefits instead of having to go back to work. We ultimately found the workers that we needed for these positions. but recruiting and placement took much more effort than the high unemployment rate should have generated,” said Vanderkin.

On the other side of the employment equation, many employers decided to reduce the number of full-time opportunities they would make available and instead relied on a part-time workforce. In addition to paring down the number of full-time workers on staff, it wasn’t unusual for companies to begin to demand that professionals have a greater number of skills under their belt so that they could take on more diverse roles.

“With a reduced workforce many companies adopted a multi-position mindset for their existing workforce. This meant that an employee that used to perform 1-2 major roles was now performing 3-4 different roles so the company could still meet their business demands. As business increased, these companies maintained their multi-position approach, making their hiring requirements much more demanding for the job seeker. A job seeker who used to be a multi-metal welder now had to be able to operate milling equipment, learn to program a CNC machine, drive a forklift and/or be able to interact with customers regarding their specific job order. The days of being a 1-2 skill employee were beginning to diminish,” said Vanderkin.

How employment trends impacted the staffing industry

The employment market will always have an impact on the staffing and recruiting industry. However, the recession of the early 2000s had one of the more lasting impacts the industry has ever seen, and the resulting changes are expected to stick around. As the industry has found innovative ways to streamline work, besides utilizing recruiting software for better management, agencies continue to make changes to operations.

“Staffing companies made significant changes. One of the most prevalent was cutting prices. Many staffing companies would approach companies with offers of significant price reductions while promising higher and more costly screening and selection criteria than what the company was currently utilizing. While this seems like a good thing for the consumer, it created two significant challenges; 1) the staffing company increased their supply costs and 2) the staffing company found it much more difficult to find suitable candidates who could meet the new more stringent criteria, which raised their recruiting costs. In the end, the staffing company wasn’t making a reasonable income for the services they provided and what were once qualified candidates now struggle to get back to work because they cannot meet the new hiring criteria.”

Vanderkin went on to say that “we have seen a serious development occur as we meet with many of the customers who accepted these lower rates. Their quality of candidate has gone down which affected their production costs and many of the skills, background, drug screen and E-Verify screening they thought they were being provided, were being skipped by their current staffing vendor. Our organization has been able to find innovative ways to help many of these clients establish reasonable hiring requirements, maintain lower labor costs and have an audit path to ensure that they receive the screening that they are paying for.”

“Many of the trends from the recession were fleeting and have worked their way out of the process. I believe the multi-position mindset adopted by most companies will continue to be the new norm. The aggressive pricing strategies by some staffing companies cannot continue long term and still allow that company to fully meet the clients hiring requirements. I believe this trend will work itself out over the next 1-2 years but pricing that meets the value of service provided by reputable staffing companies might never reach previous levels.”

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Our interview with John Vanderkin of Employers Overload continues next week, as he comments on the current state of the staffing and recruiting industry, the impact of the Affordable Care Act (Obamacare), and other government actions.

Have a recruiting or staffing agency employee retention problem? Here are four tips to help solve it.

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Reducing your agency employee turnover is a leadership responsibility.

reduce employee turnover with Bond Adapt recruiting softwareEarly in November I had the opportunity to facilitate a roundtable discussion on staffing and recruiting agency salesperson retention and development at the TechServe Alliance Conference in Las Vegas. Needless to say, my inner nerd was pretty stoked about the opportunity considering that my dissertation topic is on salesperson retention and training in the staffing industry. I came ready to discuss four key areas on the topic but the discussion was so vibrant that our table never made it past the first area of discussion. Before we knew it, our table was the last one left in the room and we had to get back to the convention. Given the passionate discussion, I thought it would be a great idea to share the “rest of the story” with you.

When looking at the issue of voluntary turnover (where your people leave your organization), the associated costs are stark. Depending on where you look, the cost of turnover can be two to three times the annual salary of the person you hired. Data from various industry sources indicates that staffing industry show turnover ranges from 30-60%. Those numbers, even on the low end, represent a huge waste of resources. In the face of such high turnover, many staffing and recruiting agencies have implemented initiatives to fix the problem. While implementing these initiatives is a good idea, they must address the following four core areas in order to be effective: managerial/leadership training, proper candidate selection, employee empowerment, and employee development.

First, focus on staffing and recruiting leadership and management.

If your staffing or recruiting agency has a turnover problem, perhaps the most cost effective way to fix it is to focus on the leadership/management tier. As the saying goes, people join companies and leave their managers. That saying is backed up by research which points to managerial issues being ranked as two of the top five reasons an employee leaves a firm. Additionally, research has shown that leadership training pays huge dividends when it comes to employee retention. I’ve been lucky in my career not to have to deal with poor leadership but the vast majority of employees don’t have that luxury. Employees rely on their managers to provide the vision and live the mission and values of the company. A critical component of your turnover mitigation initiatives has to focus on making sure your leadership is armed with the tools to retain your best people. Focusing on training at the leadership level is among the most consequential investments you can make and one of the most likely to dramatically change the direction of your organization.

Second, select staffing and recruiting employees systematically.

A second piece of the “solving turnover” puzzle has to do with employee selection. When it comes to selecting recruiters or staffing and recruiting salespeople, it is critical that companies use a systematic approach to selection. Whether you are looking for a hunter or farmer personality, you must understand the core skills and competencies of each role and evaluate that throughout the interview process. Additionally, incorporating a diagnostic tool like the Predictive Index, LSI, or other personality assessment should be a central element of your selection process. Furthermore, it is crucial that you use a team/panel interview format AND that one person on the team is tasked with putting the candidate on the spot in order to assess how well they perform under pressure. Lastly, there needs to be consensus on the team. Before bringing someone into the team, you should have wide agreement on the panel that the candidate fits your organization from both a competency and cultural standpoint.

Third, empower your employees to solve business problems.

A third and often forgotten element of the “solving turnover” puzzle is the issue of employee empowerment. The level of employee empowerment is directly related to leadership style. The amount of freedom that an employee has on the team depends on the level of control exercised by the leadership. This is where leadership training can play an important role in empowering employees. Team leads should always be looking at how they can get the most out of their people and the best way to get positive results is to get out of the way. If the goal is to retain top talent, leaders must recognize that the team they put together must be given the freedom to reach goals their own way. No top-tier employee will want to stay with a team where there is no freedom to be creative in solving business problems. Similarly, it’s up to leaders to empower employees with the facilities, resources, and tools – such as world-class staffing and recruiting software – necessary to perform their jobs. This reinforces to employees the importance and value of their contributions to solving business problems successfully.

Fourth, don’t neglect employee development.

Lastly, once you have the three other pieces in place, you need to make sure that the people you have within your staffing or recruiting agency are being developed. Employee development isn’t just about having a career path; it’s about creating and giving opportunities to move a person’s career forward. In a very general sense, it means creating the opportunity for the employee to drive the direction of the company. In order to do this effectively, you must first know what the employee is passionate about and then empower them to come up with ideas that improve the company from a systems or processes. In the process of doing this, you’re assessing their ability to influence and lead and preparing them for the next step in their career. Even if you don’t have a defined career path, increasing the responsibilities the employee has goes a long way in developing them for future leadership.

Employee turnover, and more specifically voluntary turnover of your top talent, is a crushing problem to deal with. The most critical element of solving the problem is to be honest about addressing the core issues. When you look at organizations with high turnover, you can almost always find significant challenges at the managerial and leadership levels. Fixing problems at the leadership level and then working down from there provides a workable roadmap for turnaround.

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Improve staffing and recruiting efforts with key metrics tracked by recruiting software

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Regardless of what industry you are in, you most likely understand that business is largely a numbers game. Numbers are everywhere, from tracking successes and failures to improving process operations and analyzing customer data. With all of these facts and figures running around, it would be foolhardy to think that the staffing and recruiting industry is no less a numbers game.

Now, with staffing and recruiting agencies that focus more on providing a consultative service rather than simply just access to a mass talent pool, the numbers become more critical. Successful staffing firms are tracking staffing metrics to understand a wide range of factors. The adoption of recruiting software has allowed recruiting professionals to gain access to necessary metrics faster than ever. Metrics allow staffing agencies to justify costs, show return on investments, predict hiring trends and even the potential success of certain candidates over others.

In the staffing industry, it’s hard to find anything more worth the recruiting software investment than hiring metrics. However, for the average staffing professional, it may be hard to truly understand where all these figures are coming from, how they are derived and what they mean.

Why should a staffing and recruiting firm use metrics?
Metrics in the staffing and recruiting industry can lead to a wide range of benefits. One of the greatest benefits is the advancement of the relationship between a recruiter and the hiring manager. Metrics and their proper application enable recruiters and hiring managers to align their objectives. In addition, figures allow for a staffing agency to prove credibility to current and potential clients. According to Qualigence International, recruiters are better able to display their understanding of an industry and whether they have appropriately achieved goals and objectives. With the help of recruiting software, a recruiter can enhance his or her ability to be actionable and effective in his or her role. Recruiting software and metrics allow an agency to generate internal benchmarks to better create performance standards and drive recruitment.

Three time periods most metrics cover in the staffing and recruiting industry
Understanding metrics begins at discovering what is being measured. According to ERE.net, there are three time periods that metrics should cover so that staffing professionals get the most out of the numbers.

1) Historical metrics. Too often when a staffing company is talking about metrics, it is focusing on historical metrics. According to Dr. John Sullivan at ERE.net, relying solely on historical metrics is a recipe for disaster. These metrics measure the events and data accrued in the last year and should not be used for real-time decision making because everything they tell a staffing professional has already occurred. These metrics are better used for trend analysis.

2) Real-time metrics. This type of metric allows a staffing professional to see what is going on as it is happening. This is helpful but could also cause potential problems. According to Sullivan, because real-time metrics occur for the most recent month or quarter, the figures could give a skewed glimpse of how the agency is performing. It’s best to remain aware, make slight adjustments and possibly look over how any changes in the economy or processes could be impacting the results.

3) Predictive metrics. Sullivan told ERE.net, that although predictive metrics are very rarely used in the staffing industry, these figures could be the most important of all. By using these figures, a staffing agency may be able to determine what challenges it could face in the future or whether an opportunity is on the horizon. Staffing and recruiting professionals seeking to work proactively versus reactively should consider the merits of using predictive metrics in decision making.

Key staffing and recruiting metrics to track

1) Number of positions filled. This figure tracks the number of candidate applications accepted for a position by a client during a fiscal year. This number falls under the historical metrics category and often helps recruiting professionals determine employee turnover and total costs spent annually on new workers. A recruiting software system put in place can help track this process easily and help professionals determine how best to improve performance.

2) Retention. Depending on the staffing and recruiting organization you are working for and what part of the industry it services, it could be important to track employee retention for replacements. How long are workers placed at agencies staying? This is of course less applicable to recruiters who are providing professionals who work in contract positions with a set end date. However, if retention is a figure being used by your firm, make sure that it also includes voluntary versus involuntary talent turnover for workers on assignment that takes the month, quarter and year into account. In addition, measure average overall time of employment, average number of talent on site, and whether the number of onsite talent appreciates over time.

3) Position vacancy rates. Staffing and recruiting professionals are often used to find a worker for a position faster and cheaper than an in-house human resource office. This means that every day a position is left unfilled an agency may be losing future orders from the client. Vacancies impact corporate revenue for a staffing and recruiting firm as well as the client. As a result, it’s imperative to find a person for the position in a timely manner and to ensure that the average vacancy time is not lengthy. ERE.net reported that it is a good idea to consider creating a standard vacancy rate so that recruiters have goals and benchmarks to measure their performance against.

At the end of the day staffing and recruiting professionals know that he/she who gets there first (with the right candidate/employee) – wins. Wisely using the reports and metrics possible through an advanced staffing and recruiting software system plays a crucial role in understanding and running operations that are consistently first.

Staffing Insights: Industry Consultant Amy Bingham on Staffing and Recruiting Trends Driving Business Decisions

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The latest numbers are in and everyone is talking: The use of contingent labor is growing in force and workers and their employers are becoming increasingly comfortable with the change. This trend is causing more businesses than ever to invest in the services of staffing professionals equipped with the most advanced recruiting software.

We have Amy Bingham, managing partner and staffing industry consultant for Bingham Consulting Professionals, LLC, speaking with us today about the recent developments in the sector.

The increasing trend of contingent labor
News reports celebrating the increase in hiring are common. However, unlike in previous decades when the nation was recovering from an economic slip, the positions being created are not necessarily permanent, salaried work. Reuters reported that three out of four of the nearly 1 million hires made in 2013 were for part-time positions. This number represents a great opportunity to ensure that recruiters are as efficient as possible with the right recruiting software.

According to the U.S. Bureau of Labor Statistics, the number of adults employed part-time was 8.2 million in July 2013. While part-time and contingent labor are different, the increases in both categories indicate a growing trend toward greater employment flexibility in the marketplace.

“I think that one trend [in the staffing industry] is the increased use of contingent labor. The increased adoption of contingent labor services by employers is the result of skittish hiring due to the economy. This has resulted in a sluggish jobs picture, unemployment rates that remain stubbornly high and consumer confidence levels that are up one month and down the next,” said Bingham. “The adoption of the ACA is also increasing costs associated with hiring. All of these factors weigh heavily on employers and when they have the option to shift those costs to staffing agencies they do so, which has boded well for the industry in the past few years.”

Bingham continued on to say that “the staffing industry remains strong, but it is moderating. Most of the national firms have announced their revenue increases over the prior year are down in the low single digits. There is some leveling off, but that is to be expected relative to the wave the industry has been riding for the past few years.”

The adoption of managed services impacts the recruiting industry 
The increased use of contingent labor is not the only trend Bingham sees impacting the staffing industry. According to her observations, the widespread use of management services is also changing how business is conducted and the staying power of the staffing industry.

“Another trend impacting the industry is the widespread adoption of managed services and vendor management services, which continues to exert downward pressure on industry margins,” Bingham said. “I think that employers will continue to rely on the staffing industry to manage their labor costs. [It could be more cost-effective], for example, for a company to break one full-time position into two part-time jobs. I believe businesses will look to creative solutions to manage rising labor costs.”

Generational reactions differ on the switch
Like many things regarding the workplace, the different generations will have mismatched opinions and reactions to the growing presence of contingent labor.

“We will likely see more work being parsed out in contract type positions and project roles, and an increase overall in part-time employment. For an employee that is accustomed to holding a full-time job, it could be challenging to adjust to the evolution to more part-time work,” said Bingham. “I think that generally, Gen Y is not skittish, they are typically very confident and they look to work as a series of experiences. Instead of expecting to hold one full-time job for 20 years – they are much more open and will embrace the changes associated with an increasingly contingent workforce. Aging baby boomers who are looking for more flexibility will embrace this type of work as well. Gen X could be challenged as this group is in the throes of raising families and therefore will be more inclined to seek the stability of full-time employment.”

Changes in the marketplace impact staffing firms
All of the trends previously mentioned are impacting staffing professionals, but mostly on the reactionary front toward employment. However, in the recruiting world, agencies are also changing processes by increasing consolidation. One of the best ways to consolidate is utilizing the right recruiting software.

“I think we are going to continue to see more consolidation among staffing firms and more short-lists of preferred suppliers within their customer base which will increase competition,” Bingham told us. “In the next few years, we will likely see margin compression in professional staffing sectors that haven’t experienced this to the same extent the commercial staffing sector has. We are already seeing this in healthcare, and in industries like accounting, finance and IT. As a result, staffing firms will have to get smarter about how they deliver their services, using technology for virtual delivery models so that they can drive down their costs and reduce delivery costs.”

She continued on to say that “within staffing organizations, more staff training will be required as the market continues to change and the way they talk to buyers of staffing services requires adjustments to effectively take their message to market.”

The importance of selling the staffing service
As employers continue to tighten their figurative belts, it’s important for staffing agencies to perfect sales and operations tactics to gain clients and prove to customers the value of the service. By implementing the right recruiting software, staffing agencies are able to create value to pass onto their customers.

“The staffing industry understands first-hand how the employment landscape is changing, and it is more expensive to employ people today than in the past,” said Bingham. “[It’s therefore important to] craft the right message on a sales campaign and package that message correctly. Staffing firms will need to package their value propositions and take the company message to market in a way that resonates with employers.”

The recession taught many businesses how to make do with less and how to increase efficiency. As a result, it is the job of a staffing agency to prove how services can reduce operational expenses in the long term and show a return on investment.

“A staffing firm can be a significant enabler of workforce management for employers – even more so today,” Bingham said.

Staffing Insights: Mike Cleland, Staffing Industry Operations Consultant, on “Driving Excellence” Via Recruiting Software

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The staffing industry is quickly adapting to meet the changing needs of modern businesses by altering operations and increasing the use of modern technologies like recruiting software. As employment trends continue to impact the recruiting sector, professionals experienced in staffing will find that learning to maneuver and meet clients’ needs in the evolving marketplace may require different things than in years past.

Mike Cleland, founder of Charted Path LLC, and author of the book titled, “Behind the Wheel: Driving Excellence in Staffing Operations,” recently sat down to talk with us about the changing state of the staffing industry and how having the latest recruiting software really makes a difference.

Greater adoption of contingent labor
While it’s no surprise to staffing professionals that there has been increased reliance on contingent labor than in past years, it is important to note that not every industry is using these forces in the same way or frequency. Professional services like IT and healthcare are using contingent labor in a much different way than clerical or administrative services.

“I think the [greater adoption of contingent labor] is impacting different segments in different ways. In the IT staffing area I do think that more consultative staffing companies will be providing greater and greater value as the labor market continues to tighten. In contrast, high volume transactional staffing firms may struggle as the readily available talent pool continues to shrink,” said Cleland. “This is certainly anecdotal, but from an IT perspective, from what I’ve heard, there is more work coming back from offshore companies. If that is the case then there will be more projects and more project-based jobs that have a beginning and an end. Contingent workers will be the answer to this employment situation if that is going on.”

As the labor market continues to shift and the adoption of contingent and part-time labor increases, staffing firms will have to alter behaviors and offer even greater services at affordable rates. To take advantage of this shift, utilizing the right staffing and recruiting software will allow recruiters to stay competitive. According to Cleland, the open talent pool is creating a much more competitive market for recruiters.

“For high-demand talent as the labor market tightens the staffing firms who have recruiters with more traditional networking and sourcing skill will have a greater and greater competitive edge. Tools like LinkedIn are accelerating this trend back to referral-based recruiting because research and selection is being driven by a network of talent,” he said. “On the lower skilled temp sector side of the business, managing an inventory of reliable temp resources is critical and proving to be a greater and greater challenge. Firms that are disciplined in building and managing their candidate inventory will prove to find themselves with greater competitive advantage if the labor market tightens.”

Demand for staffing services expected to increase
With the adoption of contingent labor increasing, the services of staffing and recruiting professionals will play a larger role in employment. Contingent labor offers greater flexibility to both businesses and workers, which is boosting its popularity. To handle this surge in popularity, the right staffing and recruiting software will allow professionals to operate with efficiency in the face of increased demand.

“I think that the contingent trend is going to become more and more important part of the labor pool, which means that staffing has a very strong future, but firms have to continue to improve their people and processes to remain competitive. Either way the demand is not going anywhere but up,” Cleland said. “The underlying uncertainty [of the economy] and labor costs means that not a lot of firms want to hire permanent talent.  In addition, the ACA may also be playing its part in spurring on the use of contingent labor even with the delay of the employer mandate. However, for high demand labor, part of the trend toward contingent labor is driven by the talent who simply prefers contract based work. A lot of those high demand workers prefer project-based work because it tends to accelerate skill set development and provides greater control over their career path.”

Opinion on contingent labor trend differs between generations
Not every generation is on board collectively with the switch to contingent labor. Older generations that grew up with the idea of stable, long-term employment view work in a different manner than younger generations. With younger workers adapting and more companies becoming comfortable with contingent labor, the tides of change are upon the market. Having staffing and recruiting software that allows you to adapt to generational workers allows you to place the right workers in the right position.

“Companies are becoming more comfortable with contingent labor and the culture associated with using this type of labor. It has also become a more acceptable way to procure talent and a more acceptable way to work. This is partially due to the changing generations. Generation X, the people who are moving into or in current management positions have very different expectations of what it means to work for a company,” said Cleland. “As a Gen X, we don’t mind moving from company to company and most people from this generation show a certain amount of movement on their resumes. Statistics show that how many people change careers, not even jobs, during their lifetime has grown and this is very different than what it was 40/50 years ago.”

According to a study by Future Workplace titled, “Multiple Generations @ Work,” 91 percent of Millennials, defined as those being born between 1977 and 1997 (which also includes Gen Y for the purpose of this article), expect to stay in a job for less than three years. This means that the average Millennial will have between 15 to 20 jobs during the course of his or her working life. Another study from social researcher Mark McCrindle claims that those of this generation will change careers five times.

“Gen Y is even more comfortable with this approach to work than Gen X. For Gen Y, jobs are more about an interest and enjoyment than stability. There is no thinking that you’re going to be with a company for 20 years and employers understand this now and they know people are not going to be with a company for long. As a result, businesses are more focused on procuring talent and retaining the right employees because employees are more than likely open to looking for other jobs,” said Cleland. “For the younger generations a job is more about the work. What is being done and is it challenging and interesting [is important to millennial workers and they often believe that if] you ever get bored it is time to move on. This is a very different mentality than baby boomers who have a completely different expectation on work and are more apt to stay with a company for the long haul.”

Is The Facebook Job Board The End Of Staffing As We Know It?

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REM sings “It’s the End of the World as We Know It.” Depending upon whom you ask, it’s an appropriate song for both staffing agencies slow to adapt to social media, and competing social platforms, to listen to while pondering the recent launch of Facebook’s new job board, the Social Jobs Partnership.

For most agencies, the adoption of social media – in some capacity – is already part of staffing efforts.  The Social Jobs Partnership will likely have only moderate impact, as savvy agencies look for any edge they can to create better connections within a network of nearly 900 billion potential candidates.

Significantly impacted, however, will be those staffing agencies that have made minimal strides into social media.  These agencies, some of whom may not even yet have a dedicated Facebook page, will likely feel the ground move beneath their feet as they must take the advice to ‘get started with social media yesterday’ almost literally.

Another organization that will likely feel the world they know start to end, again – dependent on whom you ask – is LinkedIn.  As staffing agencies optimize their Facebook presence, questions surrounding LinkedIn’s relevance are beginning to surface.   LinkedIn’s base of 175 million college educated users varies significantly from Facebook.  However Facebook’s voluminous user base allows an almost unprecedented ability for demographic segmentation.

For example, even though only 22 percent of Facebook’s members are older than 45 years of age it equates to nearly 220 million people – more than LinkedIn’s entire network. Facebook’s Social Jobs Partnership is also proving initially successful at recruiting lower-skilled workers.  This could be a starting point for Facebook’s eventual movement upstream, which may reduce LinkedIn’s market share in the process.  Note that LinkedIn’s distinct advantage, ie, its ability to support connections with more highly educated job candidates, is unlikely to change.

Ultimately, Facebook’s Social Jobs Partnership is a game changer within the staffing industry that provides agencies and competing platforms with a tremendous opportunity to move their world ahead – or see their world start to end – depending on how they adapt. For staffing agencies, success, more than ever before, will be contingent on how one of the biggest social networks ever created is blended into a holistic and optimized recruitment strategy.

For more information on the battle between LinkedIn and Facebook I encourage you to read a white paper my company developed several weeks before the launch of the Facebook Social Jobs Partnership, LinkedIn Updates vs. Facebook’s Jobs Board: What You Need to Know.

5 Ways Health Reform Can Benefit Your Staffing Agency

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Health ReformThere have been countless articles on healthcare reform and how it impacts your staffing agency.  Reading through each of these posts can leave the waters a bit murkier in terms of exactly what the impact is going to be.

What we do know is that healthcare reform isn’t going anywhere with the reelection of President Obama.  Starting in January 2014, employers will have to offer qualified health insurance to full-time employees or pay penalties, estimated at $2K per employee.  Staffing agencies currently are not fully exempt from these penalties.

This healthcare legislation has resulted in significant discussion regarding the potential negative impact to staffing agencies, even as the ASA has successfully fought for a ‘look back’ period, which lessens penalties.

While much of the discussion regarding potentially negative side effects is valid, there are some definitive benefits that are arising for the staffing industry. 5 such benefits appear below.

5 Crystallizing Benefits

1. Temporary hiring boom likely to continue: many temporary segments are forecasted to peak in 2013. Right or wrong, temporary non-full time employees look more attractive to employers since they may not be on the hook for as high of potential health costs (operative phrase at this point being ‘may not’.)  While there is no definitive way to say whether this will truly result in lower health costs – the perception that it will lead many employers to be more comfortable with hiring contingent workers.

2. Healthcare staffing poised to improve:  it’s not inherently apparent the specific positions health care reform will create.  However, with an estimated 3 percent increase in provided healthcare, there is no denying that the demand for workers within the industry will increase.  The increase in demand is a welcome sign for staffing agencies servicing the healthcare industry.

3. Easier to attract and retain better candidates:  staffing agencies that offer healthcare coverage to employees “maintain a competitive edge in the marketplace as it pertains to recruiting and retaining employees.”  As demand increases and qualified employees become scarce, offering insurance could be the catalyst staffing firms need to thrive in a new era of healthcare.

4. Time to decide: The most impact from the Affordable Care Act will be felt starting January 1st, 2014, which affords staffing agencies a little over a year to decide which road to take.  Having time to decide on the correct course of action provides staffing firms the ability to research additional information about the law and weigh their options.

5. Staffing firms control the message to their clients: staffing firms that decide to offer health insurance to their employees and clearly communicate that fact to their clients may see an advantage over competitors that seem to be passing costs on to clients.

While healthcare reform is met with mixed emotions, significant opportunities exist for staffing agencies – both in managing any potential negative impact and better understanding the positive impact.  Now is the time for staffing firms to fully immerse themselves into this new world, decide on a strategy, and execute.

For more on how health reform will impact your staffing agency, I invite you to attend the upcoming webinar, Health Care Reform: What You Need to Know, being hosted by Bond US on Thursday, December 13th.