The agency temp model has been the tried and true mainstay of the staffing industry for many decades. The client needs a contingent worker, the staffing firm finds and supplies the right one while serving as employer of record. The machinery for executing this process has not changed that much—automation has been introduced to optimize here and there—but all the basic steps have remained the same, like an old dance that everyone knows and loves to do.
Or maybe not everyone is loving it: dances change over time—for example, from a minuet to a hot cha-cha-cha.
And staffing firms may be starting to feel the heat these days. BLS data suggest that a cyclical peak may have been reached heading into 2015, perhaps signaling an end to the “post-recession recovery temp staffing party.”
But deeper changes may also be at work. Staffing Industry Analysts recently published these staffing firm survey results, indicating that even some large percent of staffing firms were expecting to generate less revenue from conventional temporary help services and more from SOW and online staffing.
Other studies, including one by Ardent Partners, basically mirror these findings--except they anticipate changes occurring within a shorter time frame (in coming years, not over the next ten years).
Most staffing firms and analysts have been mesmerized by one new, fast-growing services model called SOW. But SOW is just the first visible signal of changing models—it is not the end-all. At the same time, SOW is showing many staffing firms how difficult it is to adopt and perform new service processes and delivery successfully to customers with new business models (e.g., for fee by completed project vs. a % of ongoing temp billings).
More changes are coming, including “workers on-demand” and “specialized, short-burst talent-as-a-service.” Customers and candidates want to engage in processes that offer them control, visibility, and speed (patience is waning for the service time frames and practices of traditional middlemen).
Staffing firms that are fully locked into their traditional temporary help business models, processes, and technology may not be able to change and adapt to new processes and models as demand for temporary help services begins to recede in favor of other workforce services and solutions. For firms like these, the flames may not be visible and there may not be any smell of smoke, but their businesses may be turning into “burning platforms.”
The way to avoid becoming a “burning platform” is to start making small changes and to start innovating NOW—begin to introduce new digitized processes and service offerings. This does not mean that you should shift your focus away from your core business and try to substitute a new innovative one. It means that on a small scale you should start making changes, getting accustomed to changes, trying to make changes work (some will, some won’t).
NextCrew is the ideal platform for pursuing this process—complete with capabilities that can be used to digitize and start to transform the way you engage with clients and candidates and how you deliver your staffing services to them. It is economical and easy to deploy, complementing and integrating with your existing technology. Moreover, you control how much and what change you want to try, and the NextCrew platform will support your doing so. NextCrew even offers pre-developed service processes and models for you to try out (like Talent Showcase, Private Talent Pools, et al).
Closing questions: Are you and your staffing firm going to be doing the same things you've done for years when the music starts and there is smoke rising in the air? Or are you and your business going to face the music now and start to dance?
Guest Blogger, Andrew Karpie, is Principal Analyst at The Research Platform and a recognized expert on emerging online work intermediation platforms as well as their impact on the staffing industry. Over the past three years, he has produced and published numerous research reports and articles on these subjects with Staffing Industry Analysts. He has also produced research and published content for a number of major staffing firms and online staffing platform businesses, and he serves on the Advisory Board of The Rise of the Platform Economy research program, a joint initiative of Stanford University Business School and The Center for the Global Enterprise. Andrew holds an MS in Policy Analysis from Carnegie Mellon University, and he lives with his family in the San Francisco Bay Area.