Although the staffing industry has pulled itself up from the desolation of 2009, this year is still full of challenges. The paramount challenge may be overcoming the reticence of clients to block out the daily ups and downs of the economy and decide to bring on revenue-producing workers.
This resistance cuts across the industry, from temp agencies to retained search firms. “Employers are hesitant to hire non-contingent workers, so they’re hiring contingent employees,” says Tony Gregoire, senior research analyst at Staffing Industry Analysts. “Often they’re even skittish to hire contingents. There is growth in staffing, but it’s spotty. We project 16 percent revenue growth for industrial staffing in 2010, but healthcare should see a 3 percent decline in revenue.”
What can staffing firms do to keep up enough momentum through the sales process to close the deal? Here are six ideas from industry insiders.
Partner with clients to rationalize their staffing strategies. When a client comes to you and says, “I need to fill 20 chairs in four weeks,” it’s tempting to just take the order and run with it. But it’s more prudent to lead the client through an analysis of their labor needs and agree on a staffing plan that’s sustainable. “We assess what the client’s business needs are right now,” says Tina Chen, director of operations for Carlisle Staffing. “We need to understand their organization, and the position they’re filling.”
Size the candidate field to suit the client. Perhaps more than ever, clients now come to staffing firms and recruiters with a wide variety of notions about how many candidates they want to see. Some just want warm bodies; others insist that only superhumans need apply. “Because employers have the feeling that there are many candidates on the market, they feel less pressured to settle for less than a perfect match,” says James Essey, president of TemPositions Group.
In this market, where employers feel in command, they’ve got to be humored, though you will put in extra hours rounding up additional qualified candidates. “Clients don’t want to make a decision until they are sure they’ve seen the full breadth of available candidates,” says Essey. “So we do our best to present a wide range of candidates right from the beginning, like four to six potential hires rather than just one or two.”
Keep clients to their plan. These days, the most challenging moment for a staffing firm or recruiter may be the handshake that actually brings workers onboard. Rather than letting clients lose their way in the ongoing morass of economic uncertainties, you’ve got to remind them of the plan that rationalizes the hires. “When a client starts to hesitate, you have to go back to the reason they decided to hire in the first place,” says Greenwald. “What are they losing if they don’t add a person?”
For many employers, the logic is simple. “My guess is that businesses cut back so dramatically, they’re finding it difficult to manage the workload,” says Steve Berchem, vice president at the American Staffing Association. In such a situation, employers can be reminded that if they don’t hire, they risk worker burnout, quality problems and so on.
Temp-to-perm, now more than ever. Some of the benefits of temp-to-perm labor are obvious, but not all. So remind clients that even in a labor market that favors employers overall, you’ve got to use every available tool to land the best candidates for contingent roles. “A temp-to-perm position gets you high-quality people,” says Chen. “Temp-to-perm is attractive to candidates, because they want a full-time situation with benefits, not contract work.”
Essey also suggests a variation on temp-to-perm that lowers clients’ risk by putting off part of the placement fee for hires that may or may not become permanent. “The client hires the candidate directly on their payroll for a consulting engagement, for which we are paid a reduced placement fee,” says Essey. “If the candidate is hired at the end of the engagement, we receive an additional fee.”
Extend clients’ planning horizon. Economic reports often make clients feel queasy about planning beyond next week, so remind them that with the economy in recovery, they’ve got to think further ahead or they’ll risk losing the edge to their competitors. “In the first quarter there was a surge in staffing activity; the second quarter tapered off a bit,” says Richard Greenwald, president of Concorde Staffing Group. “Now our clients are talking about adding staff in the fall.”
The HIRE Act can be a potent sweetener. You may be leaving money on the table if you don’t sell your clients on Federal incentives to boost the workforce. Through the HIRE Act of 2010, employers that bring on unemployed workers may be able to skip payment of 6.2% payroll taxes and receive a tax credit of up to $1,000 per worker. Agencies that help clients identify candidates who would qualify under the HIRE act could get a leg up. “That tax incentive does mean something to employers,” says Greenwald.