The Eagle Blog

The Decline of the Staffing Industry is Greatly Exaggerated

Hiring quote by David OgilvieThe staffing industry comprises “middle men” who find talent to meet their client’s demands.  In the optimal case they find the perfect candidate, in a timely manner and at a good price.

Of course “middle men” have been targets for disintermediation for years.  Technology will replace them (travel agents) or better business models will replace them (taxi companies using the sharing economy).

The recruitment industry can be a frustrating one for both clients, and the talent they pursue, which just increases the desire of innovators to replace the industry, either with technology or just a better way of doing things.  Everyone thinks they can do it better.

“If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.”   Red Adair

Over the years those of us within the industry have seen some major changes that were predicted to cause that disruption.  There were job boards that would allow clients to access the candidates directly.  There was technology that would restrict a client’s staff from engaging “unapproved staffing vendors”.  More recently there have been technology innovations using Artificial Intelligence, machine learning, Big Data and analytics in addition to crowdsourcing, shared economy solutions and just about any option using pieces of the above.  Yet here we are.

Why has this industry survived?

  1. It is not as easy as it seems. How hard can it be?   The client needs someone, you find a qualified person, you match them up and there you go!  Well it is just not that easy … here are Just SOME of the challenges:
    • Understanding the client need is not simple. Job descriptions are never complete, different industries use different language to describe the same roles, acronyms are widespread & inconsistent.  Job roles change and very often client needs “evolve” as the search progresses.  Staffing companies understand this world, and trained agency staff work hard to become proficient in this environment.
    • Clients have many competing priorities and the hiring cycle can suffer, meaning that quite often they lose great candidates because they couldn’t act fast enough. Yet the staffing companies keep coming back with more.
    • We have many, many GREAT candidates … BUT also many, many candidates lie! Big lies and little lies, and certainly more often than you would think.  On their resume, in their interviews and we have even had different people interview than showed up to sign the contract!  Agencies use experience, process and tools to be able to manage this.
    • Among the candidates that don’t “lie” are the many candidates who oversell themselves. Just because they say they can do the job, and their resume might be written that way, it does not mean that they can!   Agency recruiters learn to identify the real candidates.
    • Attracting more candidates seems like a good thing to the casual observer, but in reality higher volume just equals LOTS of extra work. Staffing companies cope with this and work to serve their clients.
    • Many clients have challenging expectations. Expecting “A” candidates for below market rates, expecting experts when all the job needs is a journeyman, expecting great talent in extremely competitive markets etc.  But that is just a staffing company’s reality …if we don’t deliver, then we don’t get paid.
    • Demographics and global competitiveness are conspiring to create serious skills shortages … finding talent is getting harder. It’s what staffing companies do.
    • Candidates can be challenging too … changing their mind, having unreasonable expectations, expecting Champagne service on a beer budget (despite the fact that they pay nothing), leaving jobs early, playing clients off against each other, playing staffing companies off against each other.  The experienced agencies understand this world and work hard to ensure things are handled professionally.
    • Our “product” is people! With all of the differences inherent in the human race and while we have never seen it all, the average staffing agency has dealt experience with these kinds of issues.
    • I could go on …
  2. The Staffing Industry has been doing this a long time. We understand the challenges and have developed the processes, capabilities, training and tools to deal with them.
  3. The Recruitment world is hard work! Recruitment companies hire, train and set an expectation of their people that their job will be hard, every day”.  From the outside it looks easy, but once you understand the nuances and take into account the human factor you quickly change your mind!
  4. The successful recruiter is a sales person in addition to all of their other skills. These are hard skills to find, and to train.  The recruitment function within companies tends to be an HR function … which is not typically associated with a hard charging, sales culture (I am generalizing of course because there are SOME very successful internal corporate recruiting teams).
  5. The Staffing Industry continually evolves as the landscape changes. We take advantage of the new technologies, new approaches, and tools.
  6. Focus brings success. Car companies focus on building cars, banks focus on finance and staffing companies focus on talent acquisition.
  7. Profits in the staffing industry are skinny. To compete and be successful staffing companies have to be good at what they do.

I have no reason to believe that the changes in today’s environment will signal the end of our industry.  In fact the growing need for talent (#1 on CEO wish lists worldwide), the growing skills shortages and hyper competitive nature of business today will just mean a stronger staffing industry.  Don’t count us out just yet!

“I am convinced that nothing we do is more important than hiring and developing people. At the end of the day you bet on people, not on strategies.”  Lawrence Bossidy

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Kevin Dee is Chairman and founder of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Board!
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