02 Aug 3 Mistakes that Keep Your Staffing Firm from Growing
This post was written in collaboration with Tom Kosnik, President of Visus Group. Tom is a recognized staffing expert and business thought leader who has facilitated the increase of bottom-line profits for corporate leaders throughout the continental United States. He and his team provide consulting services, internal diagnostics, training programs, and more to help organizations achieve their next growth and productivity milestones. Need executive advice? Start your conversation with Tom here.
Every staffing firm dreads hitting a plateau in their growth, especially after previously experiencing success expanding their production, placements, and revenue. What causes growth to flatten out needs to be explored until the answer is found. One possibility can be eliminated outright: the state of the overall staffing market.
Staffing Industry Analysts forecasts the staffing industry to grow to $146.6 billion by 2018, implying there are more than enough opportunities to be had. Looking at the numbers a little deeper, you see that the top 42 IT staffing firms comprise 62% of the market share, proving those firms are tapped into strategies their competitors would be wise to adopt. From our experience, the difference between small to midsized staffing agencies that continue to grow and those locked in stasis boils down to growth averse mistakes like the following three:
Mistake #1: Their Best Value Propositions Get Ignored
Though most staffing and recruiting firms have a list of value propositions they consider to be rainmakers, very few of those purported benefits actually appeal to prospects.
For example, every staffing firm at some point has advertised their ability to find incredible people who aren’t available anywhere else. Prospective clients just don’t buy it. Unless you are raising next gen. technical professionals on some farm hidden upstate, then you’re working with the same talent pool as everyone else. Everyone’s resumes are on Dice, Indeed, or LinkedIn anyway (though you can improve your odds of getting responses from candidates through better LinkedIn InMails).
On the other hand, IT staffing firms that continue to grow highlight two features of their branded service better than their competitors: the quality of their fulfillment process and their industry specialization.
Fulfillment Process –A branded fulfillment process conveys a clear message to clients: we have a formula in place to streamline your next hire and our methods consistently surpass industry averages. Staffing companies in growth mode tend to have a defined and articulated fulfillment process in place, backed by results. Low submittal to hire rates, high close rates, and high candidate retention rates communicate to clients that working with a given firm is low risk.
The right staffing averages even help when negotiating fee agreements. Hiring managers want clear justification for their spending with a specific staffing firm, and strong performance averages are hard to ignore.
One staffing client company relying upon a distinct fulfillment process had an average close rate of 85% in their industry. When clients were hesitant about fees, they were able to ask a very simple question: “Okay, you want a lower fee? What step in the fulfillment process do you want to sacrifice?” With a proven method, any change to the formula might weaken the results. Because of that, more prospects see their fee structure as necessary for the quality of candidates they received.
Specialization – This embodies more than experience in a specific industry. Staffing firms that use specialization as a value proposition convey that they’re subject matter experts. In the minds of clients, their recruiters provide a depth of specialization that offers a competitive edge.
One approach is to have a pod of recruiters who specialize in hard-to-find technical skills like SAP or Cloud Security. Having a team of professionals who spend all their time finding, connecting with, and placing IT professionals in those exact roles is gold to buyers. Additionally, staffing firms with recruiters who specialize in hybrid tech roles (tech professionals for the healthcare or financial sectors) have more leverage with prospects. Either way, technical staffing firms differentiate themselves in the field from generalists.
Mistake #2: The Efforts of Top Performers Are Not Maximized
Q: How many recruiters does it take to change a lightbulb?
A: Zero. Their time is better spent on more productive tasks.
With the staffing industry more competitive than ever, staffing firms need to be thinking about the way they use their internal talent – especially their top performers. More than other members of the team, top performers’ output increases placements, revenue, and growth targets. As their time spent building connections, overcoming objections, and closing deals yields more business growth, it’s paramount to prioritize those activities over all else.
Which time sucks prevent top sales performers from closing deals faster? It’s the type of activities that fall outside of their most productive skillset:
- Administrative Duties – Order entry, job post processing, and resume formatting are tedious. Administrative staff, internal sourcers, or even outsourced recruiting support easily handle these tasks and top performers lose nothing from the transition.
- Screening Duties – Is a candidate the right fit for a position? Junior staff members are capable of searching for passive candidates, screening resumes, and running application processing with limited guidance from top performers. That enables top salespeople to spend more time on calls and face-to-face visits.
- Onboarding Duties – More technical staffing agencies value a high touch approach to their placements, guiding candidates and clients beyond the onboarding process. However, routine background verification, reference checks, and onboarding preparation can be handled by other members of your staff and still be treated as part of your branded value proposition.
Another reason some staffing firms find their growth has gone static is that top performers lack the resources needed to reach that next plateau. In part, it’s because the range of lead generation and peripheral staffing solutions are multiplying.
Access to sales intelligence services like DiscoverOrg (See our eBook published for DiscoverOrg on finding Purple Squirrels) accelerate the identification and engagement of potential buyers. Premium applicant tracking systems offer a streamlined and integrated experience that allows sales people and recruiters to utilize the full lifecycle in one dashboard. Even automated reference check tools help to verify information in the shortest timeframes.
In all instances, eliminating time sucking activities is like weeding – it’s necessary to foster desirable growth. Plus, it needs to be done regularly, so even if you feel like your top performers already have access to all the best time-saving resources, think again. The IT staffing industry moves so fast that regular audits are central to continuous growth.
Mistake #3: Brands Fail to Attract Candidates
In the current market, one of the greatest challenges facing staffing firms is maintaining a steady flow of quality candidates in their pipeline. Branded processes, specialization, and optimizing recruiting efforts remove several barriers to a staffing firm’s growth, but candidates still need convincing that your brand is the perfect fit. Their time is valuable and you need to prove your services are too.
Staffing firms that are in growth mode are magnetic in their own right. They attract passive candidates long before job searches begin (learn more about proactively increasing your headcount here). How do they do it? These staffing agencies unleash a multitude of touch points that create brand awareness and trust. Here are just a few of the ways they do that:
- Sponsoring Community Events – Being a presence in the industries you serve draws a dotted line between you and their career fulfillment. Whether it’s sponsoring a networking event, conference, or hackathon, your company integrates itself into the fabric of the industry. That makes it a much more logical step to reach out to your organization to improve their career.
- Content Marketing – Are passive candidates seeing your brand as an industry expert? Content marketing establishes recruiting firms as thought leaders that put serious reflection into challenges facing job seekers. If passive candidates trust you as a source of career and industry advice, they’ll be more willing to trust you with their actual careers.
The Secret to Growing Your Staffing Firm
What do all of these mistakes have in common? They fail to maximize the capabilities and expertise that small to medium sized staffing firms already possess. Advertising your value propositions simply communicates your niche expertise. Supplying salespeople and recruiters with the time to leverage cutting-edge resources multiplies your existing successes. Widening the talent funnel improves even more careers through your diligence and service. In every instance, these differentiators take the exceptional qualities that already exist in your business and help them to be heard.
Want to learn how to differentiate your staffing firm even more? Download your own copy of Differentiating in the IT staffing RFI/RFP for free and learn how to stand out from your competitors.