Staffing Industry Review, February 13, 2017
By Barry Asin, President of Staffing Industry Analysts
Of the nearly 20,000 staffing firms operating in the US, few reach $10 million or even $5 million in annual revenue — and just a select few exceed $100 million — the threshold for firms to land on our pinnacle list of largest staffing firms. Our 2016 list contains a scant 133 firms. What enables those firms to “break through” to join the pantheon of staffing industry leaders?
I’ve been working on a book on this topic with Mike Cleland of Charted Path. We’ve spent hours debating the question. Not surprisingly, we’ve learned that there is no single answer, but there are some intriguing commonalities among those high performers:
Strong markets, clear differentiator. What does it take to break away from the pack? First, there are a series of strategic hurdles that staffing firms must cross. While it is possible to grow in just about any staffing market, the fact is that the strategic choices staffing firm owners make have a significant influence on their ability to grow. To maximize the odds of success, staffing firms must choose a strong market to serve and a strategy to differentiate their business from competitors. The larger- and faster-growing the market and the clearer your business’ points of differentiation, the more likely you are to have a business that will grow to outperform the industry as a whole. SIA offers a wide variety of tools to help you develop an effective strategy and market focus.
Great execution, ambitious mindset. Having a solid strategy and choosing the right markets and business model are necessary conditions to succeed, but they are far from enough to get your business off the ground. What is needed more than anything is great execution. First and most important is the presence of a growth mindset and ambition among the executive leadership of your business. Many staffing execs are quite happy to have a lifestyle business that grows modestly. While that is a perfectly fine choice, it will seldom lead to break-through levels of growth and performance.
Growth-oriented culture. Once you’ve chosen a winning strategy and committed to a growth mindset, take note of a number of disciplines demonstrated by those firms that outperform. First among those is the focus on reinforcing cultural standards. Top-performing firms have strong, growth-oriented cultures that are by design and not by chance. More than anything else, a strong, healthy culture was a common element among all the firms we spoke with that were able to grow from the ground up.
Strategically aligned, driving sales. Top performers also exhibit the discipline of constantly enhancing strategic alignment. These firms are ruthless in building processes and behaviors that continually deliver an operation that is aligned with their strategy and ensure that the strategy is adjusted over time to fit real-time operating conditions. Driving sales execution is also critical. Staffing firms that break through the barriers to growth don’t do it without relentlessly driving execution in their sales force. Metrics, hiring criteria, operating processes and compensation are among the key areas that firms must drive to ensure their sales strategy is well executed.
Boosting internal talent, operations. Break-through staffing firms also invest significantly in bolstering their internal talent. In fact, among the most successful firms, leaders see the growth of talent and building the next generation of leaders as the most important element in being able to grow. Finally, breakthrough firms also display the discipline of constant attention to enhancing operational performance as well as ensuring that they have the appropriate financial and back-office support to execute on their strategy.
While the odds are long on firms growing from startup to the pantheon of industry leaders, it can be done through focus and discipline. Of course, there are many factors that can help drive great performance, but leaders able to make good strategic choices and consistently drive these disciplines are more likely to make it above the clouds to a higher level of staffing success.