The Eagle Blog

The Staffing Industry – Getting Paid for Our Work

Every now and then I write an industry specific blog entry related to the staffing industry. The topic for today’s blog entry came from an industry colleague yesterday who has been struggling with this issue.

The Staffing Industry sometimes suffers from misconceptions and differing opinions about the value that we bring. I have written several entries about the value proposition offered by companies like Eagle. The last time I wrote about this general subject was called Staffing Companies and Their Value of Canada. Within that blog entry I referenced some other relevant blog entries … such as the IT Staffing Company Value Proposition, there was also a blog entry with some interesting statistics and facts about our industry.

Today’s blog is about a particular issue we face with some clients, who maintain their own databases of resources … and how they use those databases. The issue is that they ask staffing companies to find them candidates, but when we find that great candidate for them we are told that because the candidate already exists in their internal database they are not prepared to pay us for our work.

At first blush you might consider that to be a reasonable stance, why would you pay someone to find a candidate that you already had? There are many answers to that question, but the probably the best way to answer is with another question. If the client had the candidate in their database AND the client had the job description then why didn’t they find the person themselves?

My suggestion to the client is this … I understand that you want to get the best value you can and if you want to have an internal recruiting capability that is your business decision. So … exhaust your internal searching capability first, and only then after failing to find a suitable candidate should you engage the staffing industry, at which point every submission is considered fresh.

The reality is that staffing companies earn their living by finding (A) the right resource, (B) at the right time and (C) at the right price … and (D) by doing it quickly! This is our core competence and it is not as simple as a list of names in a database, it requires an investment of resources in keeping that database current, in maintaining relationships and in tracking great candidates. It requires disciplined processes and a commitment to staying current, all of which forms part of the cost of doing business as a staffing company.

Candidate profiles change quickly, they get more experience, learn new skills get promoted and their resumes from a couple of years (months?) ago may look very different. If you are out of date you won’t find them for your job. People use different resumes for different roles … there are a million reasons why a corporate database might not “cough up” the right candidate, and if that’s all it took to find the right people then everyone would sign onto Monster and the staffing industry would be redundant.

Staffing companies invest a lot of time and effort into process, tools and staff to provide this service. My view is that if we do the work and we are successful then we should be paid. Most clients recognize the value (which goes far beyond a mere searching capability) but there are a few who don’t get it. Over time we have developed a short list of companies that we choose not to work with, because of their policies on this issue. Perhaps they will change as the workforce continues to shrink!


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12 thoughts on “The Staffing Industry – Getting Paid for Our Work

  1. Interesting topic. In the Internet age are staffing agencies obsolete?

    Are you starting to see a higher percentage of contract workers who find their own work then seek out Eagle to act on their behalf?

  2. Interesting topic. In the Internet age are staffing agencies obsolete?

    Are you starting to see a higher percentage of contract workers who find their own work then seek out Eagle to act on their behalf?

  3. Hi Don … good question. I think that question worried a lot of people 10 years ago! It worried retailers, “middle men” (like us) and anyone with a storefront as we were all told we were fast becoming irrelevant.

    The reality has been somewhat different … which was the point of this blog entry. Recruiting is a lot more difficult than keeping a database or searching Monster, and generally speaking most companies are not that good at it. The other big factor is that we are dealing in terms of people, so the varuiables become infinite and matching systems just don’t work that well. (Perhaps artificial intelligence wil change that in the future).

    As for all those other businesses, I think we have seen many companies enhance their offerings through online sales, but their storefronts don’t seem to have been hurt. They just have two separate ways to market. I think the agencies have become the biggest users of the online tools as a part of their “arsenal” too … so the intenet has actually proven to be good for the staffing industry.

    The fact is that the technology world changes at an incredible pace so who knows what the future brings, but I am not seeing any decline in the relevance of staffing companies. In fact with the increasing shortages (skills AND labour) our value to the economy will only increase.

    Your second question asked about contractors findiong their own jobs. I don’t think we have seen any increase in that phenomena, it has always been there and payrolling is a part of the business.

    Once again you ask tough questions and make my brain hurt … thanks!

  4. Hi Don … good question. I think that question worried a lot of people 10 years ago! It worried retailers, “middle men” (like us) and anyone with a storefront as we were all told we were fast becoming irrelevant.

    The reality has been somewhat different … which was the point of this blog entry. Recruiting is a lot more difficult than keeping a database or searching Monster, and generally speaking most companies are not that good at it. The other big factor is that we are dealing in terms of people, so the varuiables become infinite and matching systems just don’t work that well. (Perhaps artificial intelligence wil change that in the future).

    As for all those other businesses, I think we have seen many companies enhance their offerings through online sales, but their storefronts don’t seem to have been hurt. They just have two separate ways to market. I think the agencies have become the biggest users of the online tools as a part of their “arsenal” too … so the intenet has actually proven to be good for the staffing industry.

    The fact is that the technology world changes at an incredible pace so who knows what the future brings, but I am not seeing any decline in the relevance of staffing companies. In fact with the increasing shortages (skills AND labour) our value to the economy will only increase.

    Your second question asked about contractors findiong their own jobs. I don’t think we have seen any increase in that phenomena, it has always been there and payrolling is a part of the business.

    Once again you ask tough questions and make my brain hurt … thanks!

  5. Most of the job postings I see on Workopolis are from staffing agencies. Using Workopolis is much easier for the job seeker than searching each staffing firm’s job board.

    Often the same job is posted by more than one agency, so I get to choose which one to contact. That’s good for me but not so good for the staffing firms.

  6. Most of the job postings I see on Workopolis are from staffing agencies. Using Workopolis is much easier for the job seeker than searching each staffing firm’s job board.

    Often the same job is posted by more than one agency, so I get to choose which one to contact. That’s good for me but not so good for the staffing firms.

  7. As you say the staffing companies have become probably the largest users of the job boards, that were originally going to put us out of business.

    You are absolutely right in many cases about the opportunity to pick and choose the agency you want to work with from the online postings. The good agencies will create strong relationships with the contractor community and be the agencies of choice for contractors doing this.

    Having saod that we post most jobs that we get, but more often than not we find a candidate for the job before we get any responses from the web. It is however nice to get the qualified candidates apply through the web, especially when we are struggling!

    Hopefully Eagle is one of the companies you would choose to work with!

  8. As you say the staffing companies have become probably the largest users of the job boards, that were originally going to put us out of business.

    You are absolutely right in many cases about the opportunity to pick and choose the agency you want to work with from the online postings. The good agencies will create strong relationships with the contractor community and be the agencies of choice for contractors doing this.

    Having saod that we post most jobs that we get, but more often than not we find a candidate for the job before we get any responses from the web. It is however nice to get the qualified candidates apply through the web, especially when we are struggling!

    Hopefully Eagle is one of the companies you would choose to work with!

  9. I’ve never had the opportunity to work with Eagle, but this is what I look for in an agency:

    1. Open bidding. I need to know how I am being marketed to a client. I don’t want to work with an agency that will overprice my services and lose me the job by default. Yes, this means that the agency has to disclose their margin, and some hate to do that.

    2. Financial stability. I want an agency that has the financial resources to pay me on time, regardless of when the client pays the agency’s invoice.

    3. No “non-compete” clauses. This one I know you will disagree with. 🙂

    4. Reasonable margins. Staffing agencies are entitled to make a profit, but once the job is won I am the one who is doing 100% of the work. Ideally, I would like to see the agency’s margin trimmed after every contract renewal past the original term.

    5. Zero margin for overtime work. I would like to see overtime earnings to be completely margin free. I don’t know of any agency that does this.

  10. I’ve never had the opportunity to work with Eagle, but this is what I look for in an agency:

    1. Open bidding. I need to know how I am being marketed to a client. I don’t want to work with an agency that will overprice my services and lose me the job by default. Yes, this means that the agency has to disclose their margin, and some hate to do that.

    2. Financial stability. I want an agency that has the financial resources to pay me on time, regardless of when the client pays the agency’s invoice.

    3. No “non-compete” clauses. This one I know you will disagree with. 🙂

    4. Reasonable margins. Staffing agencies are entitled to make a profit, but once the job is won I am the one who is doing 100% of the work. Ideally, I would like to see the agency’s margin trimmed after every contract renewal past the original term.

    5. Zero margin for overtime work. I would like to see overtime earnings to be completely margin free. I don’t know of any agency that does this.

  11. Don … this is way too big a topic for comments. A very abbreviated high level comment … my belief is that the agency brings a ton of value to the client, the client pays a fee to the agency to cover the agency fee plus the contractor fee. To suggest that the fee paid by a client is purely for the work a contractor does just doesn’t work. A good contractor needs to know their worth in the marketplace and charge accordingly, if you are paid what you are worth and the client is happy to pay an agency for what they do then everyone should be good with that. (Incidentally I agree that the contractor should know what the agency is making in their 3-way deal, and the agency should be prepared to say what they do for that fee). I’ll leave it at that for now.

  12. Don … this is way too big a topic for comments. A very abbreviated high level comment … my belief is that the agency brings a ton of value to the client, the client pays a fee to the agency to cover the agency fee plus the contractor fee. To suggest that the fee paid by a client is purely for the work a contractor does just doesn’t work. A good contractor needs to know their worth in the marketplace and charge accordingly, if you are paid what you are worth and the client is happy to pay an agency for what they do then everyone should be good with that. (Incidentally I agree that the contractor should know what the agency is making in their 3-way deal, and the agency should be prepared to say what they do for that fee). I’ll leave it at that for now.

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