Back in the early 90s when I entered this business, I was exposed to a simple yet accurate description of the staffing industry by Al Dubuc of Oz Enterprises- “People selling people to people”.  The crux of that definition was that this business runs on the strengths of one-on-one relationships with clients and consultants. However, as clients have changed how they purchase staffing services and candidates have change how they look for jobs, the business has become more complex. While the ability to build long lasting trusting relationships is still critical to a staffing company’s success, other critical factors have crept in over the last decade and altered the landscape of how we need to view and manage this rapidly changing business.

Developing Internal Talent:  Companies are frustrated by the inability to hire qualified sales and recruiting talent.  Relying on hiring experienced and qualified talent that are willing to leave their current position has become exceedingly difficult for a variety of reasons.  The alternative is to hire less experienced people and train them.  However, most companies are ill prepared to hire and develop inexperienced talent, but you don’t have to look far to see the return on such an approach. It’s no coincidence that the top staffing firms are also the ones that invest heavily in hiring and developing inexperienced internal talent.  Lessons: Hire for drive, invest in your talent.

Data Management:  It used to be that a key success factor for a recruiter was being the first to the thermal fax in the morning.  Now recruiters are deluged with data from a wide range of sources, but it doesn’t end there.  More sales people are trying to master vetting through large numbers of automated job orders and submittals than learning how to sit down with managers to understand requirements.   Possessing the ability to process and manage data is no longer optional and Staffing companies must understand that they either learn to manage their data effectively or be buried underneath it.  This is the new normal that will be with us for the foreseeable future.  Lessons:  Continually strengthen your processes and tools, know your metrics.

Focus on the Core:   Cloud Computing, MSP/VMS services, Off Shoring, Job Boards, Social Media and low barriers to entry are only a few of the factors that contribute to an increasingly competitive future in the staffing industry.  This competitive landscape requires staffing firms to better define their plan of attack that will maximize their return on investment dollars and effectively leverage their strengths.  This focus is best achieved through a strong strategic plan that builds on the core of the current business.  Strategy should be a practical planning exercise that can bring needed focus and rigor to an organization.  Key principles around this approach to strategy can be found in books such as Good to Great and Profit from the Core.   Lessons: Focus your team, leverage your strengths.

It’s important to keep in mind that the factors above are independent of poor market conditions and that all of them could potentially become bigger factors as the market rebounds.  There are more success factors that could be listed, but these three are consistent reoccurring themes in the companies I encounter.