Recruiting Software Blog Staffing Insights: John Vanderkin, President of Employers Overload (Part 2)

The staffing and recruiting industry is operating in the midst of an uncertain time.

The steady, yet not thriving, economy, federal government actions (or inactions), and the introduction of the Affordable Care Act have all made an impact on the industry. As result, recruiters are working hard to use the latest in staffing software and recruiting software, designed to provide the right solutions to employers and workers. Industry professionals are focusing their attention on adapting to the changing needs of employers during an uncertain economic and legislative environment.

John Vanderkin, President of Employers Overload, an innovative workforce staffing company, spoke with us about the impact the ACA and the federal government shutdown has had on the recruiting industry and what we can expect to see in the future.

Current employment market looks positive

The November jobs report from the U.S. Department of Labor details that total nonfarm payroll employment rose by 203,000 in September 2013. This is positive news. In addition, the unemployment rate dropped three tenths of a percent to 7.0 percent.

“The current employment market is picking up. We are seeing more hiring in the manufacturing and distribution industries as well as more opportunities in general clerical and administrative positions. This increase is certainly not a robust return to previous hiring levels but it is an encouraging sign that we hope will continue to accelerate,” said Vanderkin.

The potential repercussions of the ACA on the staffing industry?

As the Obama Administration works the kinks out of the deployment of the ACA, many employers are trying to adapt their recruiting software and processes to implement the necessary changes. The staffing industry is simultaneously trying to better prepare for the potential repercussions of the ACA (read the Bond White Paper on staffing industry perceptions of the ACA).

“The staffing industry should not become an avenue for companies to try and avoid the ACA requirements, but the ACA creates some opportunities for the staffing industry if companies adopt the use of certain staffing industry services. Used properly, the staffing industry can help a company minimize some of the impacts of ACA,” said Vanderkin. “Utilizing temporary employees for short- term business growth or projects can alleviate the tracking and notification requirements that a company needs to follow for ACA. Using temp-to-hire services to fill permanent positions can help to reduce turnover and avoid more costly ACA administration tasks until the company is sure that a candidate will really be a good fit for the organization.”

He went on to say that “the ACA has also created numerous challenges for the staffing industry. The increased costs associated with longer term temporary project placements, administration and tracking of the ACA requirements as well as educating the staff and candidates of the staffing company are just a few of these challenges. As staffing organizations recognize the increased costs of administrating and paying for the ACA, they will need to determine how to pass those costs along to their clients in a fair and reasonable fashion.”

Working with partners to prepare for the ACA

Staffing and recruiting professionals may have to advance their use of new recruiting software technology solutions to better prepare for the implementation of the ACA – especially as the various deadlines come into play. Vanderkin told us that his organization is focusing on educating key members of the company to take point on various ACA-related responsibilities and projects.

“We have done a tremendous amount of work to prepare for this change. We have spent a great deal of time educating key members of our staff, we continue to meet with customers and businesses within our service areas to educate them about the ACA and its effect on staffing, we are working closely with our software vendor, Bond International, to enhance our applicant tracking system so we can meet the requirements of ACA and we are continually working to answer questions by our candidates and employees on how the ACA will affect and support them,” said Vanderkin. “Keeping abreast of the changing ACA regulations is an important task of a staffing vendor and we provide this service and support to our customers to ensure that they have the latest information to base their hiring decisions upon.”

By implementing strategic tools, recruiters will be better able to meet the needs of clients. Comprehensive tools like staffing and recruiting software that boost productivity and efficiency in the office are the key to better preparing for the potential upheaval that the ACA will create.

Governmental budgeting issues and its impact on staffing

The 16-day partial federal government shutdown in October certainly made an impact on the rest of the economy and public opinion. Even as lawmakers now (in mid-December) work to pass a two-year budget agreement that may provide some stability, there is still much uncertainty on the impact of any budget agreement on the economy.

“I think any government uncertainty is bad for economic growth and unfortunately we have had a long run of government indecision to contend with. This uncertainty has had a very big effect on hiring and overall economic growth. The government shutdown in October had an effect on this overall issue but in and of itself, it will not have a major impact on hiring across the broader American business community,” said Vanderkin.

Looking forward, continued improvement in employment figures demonstrate a pickup in business demand for staffing as sales increase. This need is reinforced by continued business uncertainty, in that there is still a reluctance to hire more FTE’s until a reasonable level of economic stability is reached.

Recruiting Software Blog Staffing Insights: John Vanderkin, President of Employers Overload (Part 1)

To this day, staffing and recruiting professionals, and the general public, are still feeling the effects of the recession.

The employment market has been steadily, if slowly, improving, yet the lingering taste of a recession is still there. As a result, recruiters are using the latest technological developments, like staffing software and recruiting software solutions, to provide relief and to leverage the current job market.

John Vanderkin, President of Employers Overload, an innovative workforce staffing company, spoke with us about the impact the recession has had on the recruiting industry and what trends we can expect to see in the future.

Staffing and recruiting industry impacted by the recession

It’s undeniable that the recession had an impact on the staffing and recruiting industry. After all, when your business is finding jobs for qualified professionals, and employers are slowing hiring, it’s a tough time. However, not all of the effects of the recession were necessarily negative, according to Vanderkin.

“Yes, the recession had a significant impact, both good and bad, on the staffing industry. As the recession began, companies were forced to reduce their workforce and often the first to go were the contingent employees. This had an obvious effect on the staffing industry as well as those contingent employees,” he said.

Vanderkin went on to say that “on the positive side, it created opportunities for a well-run staffing organization to provide strategic consultative support to those companies that could still benefit from a contingent workforce. A good staffing vendor was able to help their client identify how temporary project employees could improve their bottom line and help them address short-term increases to their business while not creating a significant impact to their ongoing labor costs. In many instances, the staffing industry was able to help companies who have never used temporary employees understand and utilize this resource. While these opportunities did not replace the losses from the recession, they created opportunities to minimize some of the impact and to grow the overall staffing client base.”

Employment trends created by the recession

For the staffing and recruiting industry, some firms found some surprising reoccurring trends. According to Vanderkin, the unusual job market conditions and new attitude prevalent in the nation created a unique situation for staffing professionals.

“The biggest trend that we noticed in 2009 and 2010 was the difficulty in getting job seekers to accept available positions rather than staying on long-term unemployment benefits. Through our sales efforts we were able to secure many short- and long-term temporary positions. but many of the candidates we spoke with decided to remain on their unemployment benefits instead of having to go back to work. We ultimately found the workers that we needed for these positions. but recruiting and placement took much more effort than the high unemployment rate should have generated,” said Vanderkin.

On the other side of the employment equation, many employers decided to reduce the number of full-time opportunities they would make available and instead relied on a part-time workforce. In addition to paring down the number of full-time workers on staff, it wasn’t unusual for companies to begin to demand that professionals have a greater number of skills under their belt so that they could take on more diverse roles.

“With a reduced workforce many companies adopted a multi-position mindset for their existing workforce. This meant that an employee that used to perform 1-2 major roles was now performing 3-4 different roles so the company could still meet their business demands. As business increased, these companies maintained their multi-position approach, making their hiring requirements much more demanding for the job seeker. A job seeker who used to be a multi-metal welder now had to be able to operate milling equipment, learn to program a CNC machine, drive a forklift and/or be able to interact with customers regarding their specific job order. The days of being a 1-2 skill employee were beginning to diminish,” said Vanderkin.

How employment trends impacted the staffing industry

The employment market will always have an impact on the staffing and recruiting industry. However, the recession of the early 2000s had one of the more lasting impacts the industry has ever seen, and the resulting changes are expected to stick around. As the industry has found innovative ways to streamline work, besides utilizing recruiting software for better management, agencies continue to make changes to operations.

“Staffing companies made significant changes. One of the most prevalent was cutting prices. Many staffing companies would approach companies with offers of significant price reductions while promising higher and more costly screening and selection criteria than what the company was currently utilizing. While this seems like a good thing for the consumer, it created two significant challenges; 1) the staffing company increased their supply costs and 2) the staffing company found it much more difficult to find suitable candidates who could meet the new more stringent criteria, which raised their recruiting costs. In the end, the staffing company wasn’t making a reasonable income for the services they provided and what were once qualified candidates now struggle to get back to work because they cannot meet the new hiring criteria.”

Vanderkin went on to say that “we have seen a serious development occur as we meet with many of the customers who accepted these lower rates. Their quality of candidate has gone down which affected their production costs and many of the skills, background, drug screen and E-Verify screening they thought they were being provided, were being skipped by their current staffing vendor. Our organization has been able to find innovative ways to help many of these clients establish reasonable hiring requirements, maintain lower labor costs and have an audit path to ensure that they receive the screening that they are paying for.”

“Many of the trends from the recession were fleeting and have worked their way out of the process. I believe the multi-position mindset adopted by most companies will continue to be the new norm. The aggressive pricing strategies by some staffing companies cannot continue long term and still allow that company to fully meet the clients hiring requirements. I believe this trend will work itself out over the next 1-2 years but pricing that meets the value of service provided by reputable staffing companies might never reach previous levels.”

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Our interview with John Vanderkin of Employers Overload continues next week, as he comments on the current state of the staffing and recruiting industry, the impact of the Affordable Care Act (Obamacare), and other government actions.

Recruiting software blog: Tips for staffing and recruiting professionals on maximizing LinkedIn’s sourcing benefits

Staffing and recruiting professionals who are adapting to the changing needs of the marketplace have a wide range of tools and tricks now available to them. The proliferation of social media and the digital presence of most professionals make the task of candidate sourcing significantly different than it was just 10 years ago.

In fact, new technologies are consistently being developed to increase productivity and efficient practices. In conjunction with the proliferation of social media is the advancement of staffing software and recruiting software solutions made available to recruiters. Industry professionals are better able to investigate the qualifications and expertise of a worker online and then integrate this information into an easy-to-read format in a staffing softwaredatabase. The inclusion of easy-to-search terms and profile organization methods used by a staffing software system and mobile accessibility makes this tool a go-to resource for recruiters.

To better optimize staffing software and recruiting software, a recruiting professional can use LinkedIn for improved candidate sourcing. Here are three tips and tricks for maximizing the candidate sourcing benefits of LinkedIn:

1) Understand the power of social media. The benefits of social media can be immense. According to a white paper from Ace Group titled, “Social Media: The Business Benefits May be Enormous, But Can the Risks – Reputational, Legal, Operational – Be Mitigated?”, in less than a decade, social media has taken over the world. The largest social media network, Facebook, boasts more than 750 million people actively using the site. It is expected that the number of users engaged on the website will soon grow twice as large as the population of the United States, which currently hovers at 311 million. For most staffing and recruiting professionals, quality information will be more viable about workers’ histories on LinkedIn. However, it is important to consider the industry a professional is in. Those who are in the media, marketing or entertainment industries are just as likely to have a professional Facebook presence as a LinkedIn profile. Regardless of what industry a person is in, it may be pertinent to consider a precursory look at a prospect candidate’s Facebook profile to ensure there is nothing that may come back to haunt a potential employer.

According to HH Staffing Services, 12 percent of employers have admitted to finding reason not to hire a potential employee because of something they found on a social media site. After a quick investigation of Facebook or Twitter, a majority of the time a staffing professional spends on social media networks doing research will be dedicated to LinkedIn.

2) Check candidate engagement. A staffing and recruiting professional may be looking for a candidate to serve as a manager or director of a department. As a result, it will be important to identify whether a potential candidate fits the mold for the position. Is this person a thought leader within an industry or do they try and spread information around or encourage engagement? LinkedIn Groups allow a staffing professional to track down whether a potential candidate is an active member of an industry community. Those who are on the cutting-edge of a sector are often participating in future developments. Social media allows for an individual to create and spread his or her voice, insight and information about topics.

“The opportunity to interact with anyone, anywhere, anytime is too world-changing to ignore. It has altered the traditional media expectation of consumers listening passively to radio and television broadcasts, or reading newspapers and magazines, with no hope of an immediate interaction. With Social Media, all that changed,” stated the Ace Group report.

Never before have staffing and recruiting professionals been able to evaluate whether a potential candidate is an active member of an industry community. While a lack of presence on LinkedIn Groups may not necessarily rule out a candidate, poor quality interactions could.

3) Align candidate qualifications. Clients of a staffing and recruiting firm want to hire a professional who aligns experience and job performance with their wishes. The prolific use of LinkedIn allows staffing professionals to engage with those who are not job seeking or who have not filled out an application for a position, but who might still fit the needs of the client. By researching and comparing the qualities an employer is looking for with the experiences and skills listed on a LinkedIn profile, a recruiter could find the right person for a job and contact them, instead of being on the receiving end of applications and hoping for a qualified candidate. In addition, the organized and static format of LinkedIn allows a staffing and recruiting professional to quickly peruse the information he or she most desires to determine if greater investigation into an individual is needed.

Remember, social media is a powerful tool and can provide great insight into the personality and experiences of a candidate. But, according to Karen Rehn, owner of HH Staffing Services, it’s important not to write someone off as a wrong match because of a couple social media posts expressing personal beliefs.

“Although employers can certainly gain some insights into the lives of potential new hires by their online profiles, be careful not to judge or to make hiring determinations solely on the information discovered online, unless it is directly related to the qualifications of the individual. Social media can also be misused and judgments can be made that are not correct or even relevant to the individual’s on-the-job capabilities,” said Rehn.

By searching for potential job candidates online with the use of social media, recruiting professionals are opening up their search to a much wider scope. In addition, the influx of information available may reveal information about a potential candidate that must not be used in the hiring process, including religion, race, gender and health status. Staffing professionals will have to carefully determine why and how they are determining the quality of a worker.

Have a recruiting or staffing agency employee retention problem? Here are four tips to help solve it.

Reducing your agency employee turnover is a leadership responsibility.

reduce employee turnover with Bond Adapt recruiting softwareEarly in November I had the opportunity to facilitate a roundtable discussion on staffing and recruiting agency salesperson retention and development at the TechServe Alliance Conference in Las Vegas. Needless to say, my inner nerd was pretty stoked about the opportunity considering that my dissertation topic is on salesperson retention and training in the staffing industry. I came ready to discuss four key areas on the topic but the discussion was so vibrant that our table never made it past the first area of discussion. Before we knew it, our table was the last one left in the room and we had to get back to the convention. Given the passionate discussion, I thought it would be a great idea to share the “rest of the story” with you.

When looking at the issue of voluntary turnover (where your people leave your organization), the associated costs are stark. Depending on where you look, the cost of turnover can be two to three times the annual salary of the person you hired. Data from various industry sources indicates that staffing industry show turnover ranges from 30-60%. Those numbers, even on the low end, represent a huge waste of resources. In the face of such high turnover, many staffing and recruiting agencies have implemented initiatives to fix the problem. While implementing these initiatives is a good idea, they must address the following four core areas in order to be effective: managerial/leadership training, proper candidate selection, employee empowerment, and employee development.

First, focus on staffing and recruiting leadership and management.

If your staffing or recruiting agency has a turnover problem, perhaps the most cost effective way to fix it is to focus on the leadership/management tier. As the saying goes, people join companies and leave their managers. That saying is backed up by research which points to managerial issues being ranked as two of the top five reasons an employee leaves a firm. Additionally, research has shown that leadership training pays huge dividends when it comes to employee retention. I’ve been lucky in my career not to have to deal with poor leadership but the vast majority of employees don’t have that luxury. Employees rely on their managers to provide the vision and live the mission and values of the company. A critical component of your turnover mitigation initiatives has to focus on making sure your leadership is armed with the tools to retain your best people. Focusing on training at the leadership level is among the most consequential investments you can make and one of the most likely to dramatically change the direction of your organization.

Second, select staffing and recruiting employees systematically.

A second piece of the “solving turnover” puzzle has to do with employee selection. When it comes to selecting recruiters or staffing and recruiting salespeople, it is critical that companies use a systematic approach to selection. Whether you are looking for a hunter or farmer personality, you must understand the core skills and competencies of each role and evaluate that throughout the interview process. Additionally, incorporating a diagnostic tool like the Predictive Index, LSI, or other personality assessment should be a central element of your selection process. Furthermore, it is crucial that you use a team/panel interview format AND that one person on the team is tasked with putting the candidate on the spot in order to assess how well they perform under pressure. Lastly, there needs to be consensus on the team. Before bringing someone into the team, you should have wide agreement on the panel that the candidate fits your organization from both a competency and cultural standpoint.

Third, empower your employees to solve business problems.

A third and often forgotten element of the “solving turnover” puzzle is the issue of employee empowerment. The level of employee empowerment is directly related to leadership style. The amount of freedom that an employee has on the team depends on the level of control exercised by the leadership. This is where leadership training can play an important role in empowering employees. Team leads should always be looking at how they can get the most out of their people and the best way to get positive results is to get out of the way. If the goal is to retain top talent, leaders must recognize that the team they put together must be given the freedom to reach goals their own way. No top-tier employee will want to stay with a team where there is no freedom to be creative in solving business problems. Similarly, it’s up to leaders to empower employees with the facilities, resources, and tools – such as world-class staffing and recruiting software – necessary to perform their jobs. This reinforces to employees the importance and value of their contributions to solving business problems successfully.

Fourth, don’t neglect employee development.

Lastly, once you have the three other pieces in place, you need to make sure that the people you have within your staffing or recruiting agency are being developed. Employee development isn’t just about having a career path; it’s about creating and giving opportunities to move a person’s career forward. In a very general sense, it means creating the opportunity for the employee to drive the direction of the company. In order to do this effectively, you must first know what the employee is passionate about and then empower them to come up with ideas that improve the company from a systems or processes. In the process of doing this, you’re assessing their ability to influence and lead and preparing them for the next step in their career. Even if you don’t have a defined career path, increasing the responsibilities the employee has goes a long way in developing them for future leadership.

Employee turnover, and more specifically voluntary turnover of your top talent, is a crushing problem to deal with. The most critical element of solving the problem is to be honest about addressing the core issues. When you look at organizations with high turnover, you can almost always find significant challenges at the managerial and leadership levels. Fixing problems at the leadership level and then working down from there provides a workable roadmap for turnaround.

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Staffing and recruiting sales growing faster than the economy

The staffing and recruiting industry is in the midst of many changes.

The introduction of the Affordable Care Act and relatively steady, but slow, economic growth over the past few years is creating an interesting landscape on which recruiters are having to traverse. As a result, professionals are having to count on more operationally efficient tools like recruiting software and staffing software to appropriately deal with increases in contingent hiring and employment ups and downs.

The negative hiring effects of the recession are decreasing

Economic indicators are showing that the negative effects of the recession are slowly receding. The unemployment rate has declined about 2.5 percentage points since its peak during 2009 and other economic cycles are showing signs of a jobs recovery, according to Monster. While there is still political gridlock and economic conditions keeping hiring at low rate of growth, productivity games have been made.

“The huge productivity gains we were seeing a year or two ago have pretty much evaporated,” said Bernard Weinstein, an economist at Southern Methodist University’s Cox School of Business in Dallas, according to the source. “If we can’t squeeze much more productivity out of current workers, then we have to hire more workers.”

Changes in the marketplace will have a positive impact on the economy in the future. Current conditions are indicating to economists that hiring will pick up soon and recent interviews of large employers in the U.S. confer. According to a Yoh survey, four out of five large organizations plan to hire as many or more new workers in 2013 as they did in 2012. Out of those who reported that they would be hiring in 2013, 50 percent expect to increase their workforce between 3 and 5 percent. Another 22 percent of companies are planning to increase the number of workers they have on the payroll between 6 and 9 percent.

“The economy was depressed for a long time, so the potential is there for hiring,” said Farrokh Hormozi, an economist and chair of the Public Administration Department at Pace University in New York City.

Changing sales picture in the staffing industry

The recession seemed to have had one positive outcome – sales in the staffing industry picked up. According to the American Staffing Association, the industry’s sales losses in 2009 were the largest ever – despite increases in temporary and contract employment in some sectors. However, this quickly turned around in 2010, when companies begun implementing more strategic hiring plans to deal with the effects of the recession, instead of simply reacting and using mass layoffs to control the budget.

In 2010, sales increased 21.3 percent to $87.4 billion and by 2011 sales rose another 12.4 percent – bringing industry sales to $98.3 billion. Just a year later, staffing and recruiting professionals were able to celebrate a good year once again when sales in 2012 increased by 6.6 percent in a year-over-year comparison to $104.8 billion.

According to Staffing Industry Analysts, growth did slow down in some sectors, yet search and placement peaked and continued to grow. U.S. staffing industry sales reached $117 billion in 2012 – a 6.5 percent increase in a year-over-year comparison. As the economy has improved , the staffing and recruiting industry has met each positive movement two-fold. Temporary and contract positions are being offered at increased rates, which is leading many staffing professionals scrambling to implement new procedures to deal with the workflow. This trend is expected to continue in the next few years, which is why it’s crucial for professionals to invest in the staffing software made to handle the influx.