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

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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

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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.

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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

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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.

How Mobile Technology is Changing the Staffing and Recruiting Industry

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The world of mobile technology has taken off, which is impacting a wide variety of industries.

how-mobile-technology-is-changing-the-staffing-and-recruiting-industry_897_521258_0_14089939_500-150x150According to the Pew Research Center’s Internet & American Life Project, 91 percent of adults own a cell phone, 56 percent of Americans own a smartphone and 34 percent own a tablet computer. Another 26 percent of American adults own an e-reader. It’s easy to say that mobile technology is taking off, but how is this change impacting the staffing and recruiting industry?

Introduction of mobile-ready technology solutions

More staffing and recruiting firms are beginning to support the inclusion of mobile-ready recruiting software and practices in everyday ways. The faux pas of keeping a cell phone out during a meeting or on a desk has been erased in many work environments. According to a 2012 survey from CareerXroads titled, “The Evolving World of Mobile Recruiting,” more than half (about 54 percent) of staffing companies are now providing or subsidizing their recruiters and hiring managers’ mobile phones as an important business expense. In addition, nearly four in five (79 percent) of recruiting companies are conducting mobile-related staffing practices to better connect with job seekers – prospects and candidates. That’s up from 68 percent in the first CareerXroads mobile recruiting survey conducted in December 2011.

Other recruiting software technologies are becoming mobile accessible to better promote efficient practices. Staffing and recruiting software is now being made to promote greater usability with an intuitive web-browser interface which is mobile accessible. Staffing professionals can target the recruiting software solutions they want to access with a few finger swipes and a click of a button on a smartphone or tablet for streamlined production. Increase productivity and boost success with a variety of mobile-ready tools that are designed with a staffing professional’s responsibilities in mind.

Making job posts accessible to mobile users

Staffing and recruiting professionals are hardly blind to the growing mobile trend, which is why more and more jobs are being posted online on mobile-friendly sites and applications. Developers are creating mobile applications that make it easy for users to search and apply for jobs from their smartphones or tablets.

“Job searching is very ‘transactional,” said Vasu Nagalingam, senior product director for Consumer at Monster. “Job seekers typically visit job boards at frequent intervals for new jobs. The mobile-savvy audience is discovering their mobile phone to be the perfect channel for this type of behavior. Supporting these changes is critical to maintaining a healthy candidate pipeline.”

Nagalingam went on to say that the next generation of workers will find the ability to apply for jobs or research potential positions right from their mobile devices especially appealing.

“The emerging workforce is a popular group of mobile Internet users,” he said. “Employers who want to target this emergent workforce should review their recruitment plans and incorporate mobile recruitment strategies to increase their recruiting efficiency.”

Mobile recruiting is changing everything about the way staffing professionals find and research qualified candidates for positions. Candidates can fill out portfolio questions, take personality questionnaires for preemptive testing and provide sample work right from their mobile devices. Smartphones and tablets even allow for recruiters to use video conferencing and recorded interviews to be embedded in staffing software and recruiting software personnel databases for later review. Recruiting software and technology is continuing to advance and change the way recruiters handle day-to-day tasks; a professional needs to stay mindful of this, while remembering key drivers behind the industry – strategic and personable staffing that achieves results.

Part-time hiring increases

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Staffing and recruiting professionals who are examining the job market may want to consider the various factors impacting the nation’s economy before becoming disheartened.

There has been a lot of news lately about the negative or lackluster jobs report that was released just last week. Yet, it’s important to consider the various conditions that are slowing the hiring market. After all, simply paying attention to the symptoms and ignoring the causes will hardly allow a staffing professional to remain ahead of the curve, invest in proper systems like staffing software and recruiting software and stay aware of the factors that could impact their job.

Part-time work increases

Many people are unaware that businesses are hiring at a robust rate. Unfortunately, 75 percent of the nearly 1 million hires made this year are for part-time jobs and many of these jobs are low paying, reported NBS News. This lack of robust hiring often makes workers question whether the market will ever recover or if this is the new market they will have to traverse to find work.

Industries that traditionally pay their workers less or rely on part-time employees, like retail and food services, are driving most of the hiring. Some employers, regardless of industry, believe that the reliance on part-time workers is the new trend because it offers greater flexibility. If the economy picks up, then employers are able to increase the number of full-time workers on the payroll. However, if the economy remains sluggish, then keeping a staff comprised of mostly part-time workers will decrease operational costs.

“Us and other people are hiring part-time because we don’t know what the costs are going to be to hire full-time,” said Steven Raz, founder of Cornerstone Search Group, a staffing firm in Parsippany, New Jersey, according to the news source. “We are being cautious.”

One of the major operational costs that has employers concerned is healthcare. The Affordable Healthcare Act has many employers waiting to see what costs are going to be added to their budgets before hiring anymore employees. Many staffing firms serving a wide range of industries have seen this trend. Raz told NBC News that his company started seeing a rise in the number of part-time positions it was filling in late 2012. Over the past year, his firm has seen an increase between 10 and 15 percent in a year-over-year comparison.

“They have put some of the full-time positions on hold and are hiring part-time employees so they won’t have to pay out the benefits,” said Client Staffing Solutions’ Darin Hovendick, according to the news source. “There is so much uncertainty. It’s really tough to design a budget when you don’t know the final cost involved.”

Employers use caution in hiring

According to the Bureau of Labor Statistics, the number of people working part-time involuntarily – because their hours were cut or they can’t find full-time jobs – is 7.9 million. That is an increase of 75 percent from 4.5 million in August of 2007. Employers are cautious about increasing the number of full-time workers they have on staff. Recent research suggests that by creatively using a combination of full-time and part-time staff, a business can thrive and even the part-time workers may be able to succeed. The difference between successful part-time worker implementation and an unhappy staff is the creation of flexible scheduling that allows for the hours on the clock to work within a person’s other jobs. The Daily Beast reported that capacity is still required to conduct business, which is why many offices are relying on a patchwork of part-time workers.

“As organizations and companies reduce the hours of part-time workers, they still have to replace the capacity, so they go out and hire additional part-time workers,” said Philip Noftsinger, president of CBIZ Payroll in Roanoke, Virginia, which manages payroll for more than 5,000 small businesses, according to NBC News.

Employers who have been focused on supporting employee financial health, yet are not hiring full-time workers, are often using creative scheduling to allow individuals the ability to hold second jobs. After all, it’s difficult to support a family on a single part-time paycheck.

“The difference between 30 and 40 hours can be the difference between being able to make ends meet month-to-month,” Heidi Shierholz, a senior economist at the Economic Policy Institute in Washington, told the news source. “That contributes to reduced living standards for American families and translates into having less income to spend on goods and services, which holds back the economy.”

Weak economy hinders hiring

Many employers report that when the nation’s economy returns to pre-recession levels they will increase hiring and switch back to a greater full-time staff, according to The Daily Beast. But until that happens, staffing professionals will be increasingly working to fill part-time or contract work roles. To manage the different scheduling and placement of part-time workers, the right recruiting software will need to be utilized while uncertainty remains.

Business owners like Jason Holstine, who owns a building supply store in Baltimore, Maryland, are reluctant to take on full-time staff when the economy is so uncertain.

“We are still working in an environment that is very hard to forecast the near future and remains very cash-constrained,” said Holstine, according to the news source. “We were always nimble, but we had to become more reactive. Using part-timers gives us more flexibility.”

Employers learned during the recession that those companies with lean operations were the ones that were better able to withstand the perils of a weak economy. By creating a workforce comprised of part-time workers, companies are better able to increase and decrease staff numbers depending on their needs during a given quarter. A nimble staffing and recruiting software solution will allow recruiters to adjust to client needs.

“Private employers are either able to make more money with fewer employees or have been able to make more money without hiring additional employees,” said Sageworks analyst Libby Bierman. “The lesson learned for businesses during the recession was to have lean operations.”

Weak Jobs Report Not the End of the World for Motivated Staffing and Recruiting Professionals

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For motivated staffing and recruiting professionals, a weak job market may make the hiring and candidate sourcing process a bit more bumpy, but hardly impossible.

Those professionals who are outfitted with the latest in efficient staffing software and recruiting software solutions will be able to leverage traditional skills and digital tools to locate and promote the best candidates for clients.

After three weeks, the federal government’s shutdown finally ended. Now, reports and data that were stalled due to furloughed employees and decreased operations are out. The latest jobs report from the U.S. Department of Labor paints a less than stellar picture of the current economy. However, market experts believe that all this should turn around now that the confusion and worries revolving around the threat of a government shutdown dissipate.

Employment numbers still moving forward

According to September’s jobs report, which was delayed two weeks because of the government shutdown, total nonfarm employment increased by 148,000 for the month and the unemployment rate remained relatively unchanged at 7.2 percent. The industries with the greatest growth for the month of September were construction, wholesale trade, and transportation and warehousing.

Despite grumblings about disappointing employment growth by many, it’s important to note that jobs are being added each month. This is positive news, while the number of jobs available is not growing by leaps and bounds, it is still moving in a positive direction. The unemployment rate may have changed little in a month-over-month comparison, but it has decreased 0.4 percentage points since June of this year.

Most of the disappointment from the jobs report seems to stem from greater expectations, as economists surveyed by Bloomberg News believed that 180,000 jobs would have been added during September.

“The employment report released this morning showed that the economic recovery continued its moderate pace during September,” said Robert Murphy, associate professor of economics, Boston College, according to ABC News. “Of course, the latest report is based on data from before the government shutdown and debt-crisis brinkmanship, and so to gauge any possible fallout from those events we must await the October numbers.”

Sectors with the greatest increases in employment included construction, which added 20,000 jobs, wholesale trade, which rose by 16,000 and transportation and warehousing, which added 23,000 jobs during the month of September, according to the jobs report. Both the civilian labor force participation rate, at 63.2 percent, and the employment-population ratio at 58.6 percent, were unchanged in September. Over the course of the year, the labor force participation rate has declined by 0.4 percentage points, while the employment-population ratio has changed very little overall.

Employment in professional and business services also improved. The jobs report shows that positions that fit within this sector rose by 32,000 in September. This is a slight decrease from its average monthly growth of 52,000 over the previous 12 months.

Lindsey Piegza, chief economist for Sterne Agee, believes that the delayed release date of the jobs report makes the information a lot less meaningful, reported ABC News.

“Of course, an outsized decline will almost certainly be blamed on the government shutdown, but the jobs market has been losing steam since the start of the year, well before the government shutdown was even being considered,” Piegza said.

Jobs data may impact feds stimulus

The weakness seen in the September hiring figures and the complications from the federal government shutdown are expected to further delay the Federal Reserve’s decision to adjust the stimulus programs, reported The New York Times.

“The labor market lost, rather than gained, momentum over the summer, leaving us with less than a desirable cushion just as the government was shuttered in response to political shenanigans,” said Diane Swonk, chief economist at Mesirow Financial, according to the news source.

The Fed has been attempting to stimulate the economy the past few years with a variety of tactics. The New York Times reported that most of the fiscal policies have had little positive effect, which is why the agency was waiting for a positive jobs report.

“The Fed’s core criteria to change policy is clear evidence of a sustained improvement in the labor market outlook,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note to clients, according to the news source. “Such evidence will not be available this year because the shutdown depressed employment in October and then probably caused a corresponding bounce back in November.”

What does this mean for staffing and recruiting professionals?

With the pace of employment growth in September slower than the average rate experienced over the course of the previous year, which was 185,000 jobs per month, staffing and recruiting professionals may find themselves being inundated with resumes from workers and clients looking to use contract employees or temps to fill roles. The job market has hardly demonstrated stability, yet the slight and steady growth does provide some hope. Recruiting professionals must use this time to demonstrate to clients that they understand the market pressures and can use creative staffing solutions to meet needs. Recruiters may find themselves working hard to demonstrate the operational efficiency of their services and how professional staffing solutions are cost effective than in-house hiring.

By leveraging the use of staffing and recruiting software with traditional industry skills, a staffing professional will be better able to demonstrate to clients that he or she is the answer to many hiring problems. As the federal government works to create new stimulus programs and increase jobs with its tools, staffing professionals can boost the economy as well by promoting the use of creative staffing solutions to meet clients’ needs. After all, happy clients that are showing positive growth will require more workers in the future.

Four Steps Proven to Bring in New Business

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New client acquisition is the lifeblood of any business, but especially so for growing staffing and recruiting companies.

Research has shown that a 10% customer attrition rate is typical for most companies; most of that at no fault of the company. Over a ten year period, a company can stand to lose their entire client base if they choose to do nothing about it.

Considering that new client acquisition is such a critical component to the health of a business, what are some of the things you can do to insure that the pipeline of new clients continues to flow? Generally speaking, every company should utilize a combination of active and passive methods in generating new clients. Passive methods involve things like marketing and advertising that direct traffic to you. Unfortunately, passive efforts take time to generate results so there should always be an active component to your efforts at generating new business. This is where your sales team comes into play.

Here are some of the strategies and tactics that were effective for me in bringing new clients on board for the staffing and recruiting services we offered.

First, you need to be patient.

Taking the long view is critical when it comes to bringing new clients especially in staffing. Hiring managers get calls from account reps all day long so it’s going to take a while to get traction. Typically it took me 6-8 months to bring a client on from first contact. If you have an integrated marketing strategy, you may be able to shorten that time frame up a bit. In order to maximize your chances for success, you need to have a consistent strategy that incorporates both active and passive efforts. Here’s a great place to set up ticklers in your staffing and recruiting software to stay in touch.

Second, don’t be afraid to use “spies.”

Sun Tzu in the Art of War noted that what separated ordinary people from extraordinary people was the ability to cultivate information from their adversaries through the use of spies. Sun Tzu observed that if you were able to gain information about your adversaries’ motives, strategies, and tactics you held an advantage you could exploit. In staffing, your “spies” are the competitions’ working temps and consultants. Build strong relationships with them and they can often give you insights into new initiatives and projects. Being armed with the right candidate at the right time positions you to bring a new client into the fold before your competition is even aware of a role opening up.

Third, be asymmetrical in your approach to cold calling.

Every lesser competitor of yours is trying to work a 9-5 schedule. What you should do is concentrate your call blocks on “off” hours. I had the most success in getting my hiring managers on the phone from 7-8:15 am and after 5:30. If you can discipline yourself to call your key targets during those times, you should have excellent success in moving the ball forward and breaking accounts.

Lastly, take a marketers’ approach to your business.

What this means is that you have to think of multiple ways to get your name in front of a potential customer. You should be managing an active target list of at least 20 accounts and you should be reaching out to them consistently every 2-4 weeks. The all hands on deck approach works well here. Ideally, if you can combine marketing, with your calls, emails, and networking events, you should have a high degree of success.

When it comes to new client acquisition, there is a wealth of information out there on what your approach should be. Don’t be afraid to experiment and see what works. I consistently used these steps and it helped me bring on 19 clients in 27 months. An effective strategy paired with solid tactics and tools is a winning formula for success.

 

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Reserve your seat to attend a special AdaptSuite Sales Studio Webinar on December 4th at 2:00 PM EST

 

Improve staffing and recruiting efforts with key metrics tracked by recruiting software

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Regardless of what industry you are in, you most likely understand that business is largely a numbers game. Numbers are everywhere, from tracking successes and failures to improving process operations and analyzing customer data. With all of these facts and figures running around, it would be foolhardy to think that the staffing and recruiting industry is no less a numbers game.

Now, with staffing and recruiting agencies that focus more on providing a consultative service rather than simply just access to a mass talent pool, the numbers become more critical. Successful staffing firms are tracking staffing metrics to understand a wide range of factors. The adoption of recruiting software has allowed recruiting professionals to gain access to necessary metrics faster than ever. Metrics allow staffing agencies to justify costs, show return on investments, predict hiring trends and even the potential success of certain candidates over others.

In the staffing industry, it’s hard to find anything more worth the recruiting software investment than hiring metrics. However, for the average staffing professional, it may be hard to truly understand where all these figures are coming from, how they are derived and what they mean.

Why should a staffing and recruiting firm use metrics?
Metrics in the staffing and recruiting industry can lead to a wide range of benefits. One of the greatest benefits is the advancement of the relationship between a recruiter and the hiring manager. Metrics and their proper application enable recruiters and hiring managers to align their objectives. In addition, figures allow for a staffing agency to prove credibility to current and potential clients. According to Qualigence International, recruiters are better able to display their understanding of an industry and whether they have appropriately achieved goals and objectives. With the help of recruiting software, a recruiter can enhance his or her ability to be actionable and effective in his or her role. Recruiting software and metrics allow an agency to generate internal benchmarks to better create performance standards and drive recruitment.

Three time periods most metrics cover in the staffing and recruiting industry
Understanding metrics begins at discovering what is being measured. According to ERE.net, there are three time periods that metrics should cover so that staffing professionals get the most out of the numbers.

1) Historical metrics. Too often when a staffing company is talking about metrics, it is focusing on historical metrics. According to Dr. John Sullivan at ERE.net, relying solely on historical metrics is a recipe for disaster. These metrics measure the events and data accrued in the last year and should not be used for real-time decision making because everything they tell a staffing professional has already occurred. These metrics are better used for trend analysis.

2) Real-time metrics. This type of metric allows a staffing professional to see what is going on as it is happening. This is helpful but could also cause potential problems. According to Sullivan, because real-time metrics occur for the most recent month or quarter, the figures could give a skewed glimpse of how the agency is performing. It’s best to remain aware, make slight adjustments and possibly look over how any changes in the economy or processes could be impacting the results.

3) Predictive metrics. Sullivan told ERE.net, that although predictive metrics are very rarely used in the staffing industry, these figures could be the most important of all. By using these figures, a staffing agency may be able to determine what challenges it could face in the future or whether an opportunity is on the horizon. Staffing and recruiting professionals seeking to work proactively versus reactively should consider the merits of using predictive metrics in decision making.

Key staffing and recruiting metrics to track

1) Number of positions filled. This figure tracks the number of candidate applications accepted for a position by a client during a fiscal year. This number falls under the historical metrics category and often helps recruiting professionals determine employee turnover and total costs spent annually on new workers. A recruiting software system put in place can help track this process easily and help professionals determine how best to improve performance.

2) Retention. Depending on the staffing and recruiting organization you are working for and what part of the industry it services, it could be important to track employee retention for replacements. How long are workers placed at agencies staying? This is of course less applicable to recruiters who are providing professionals who work in contract positions with a set end date. However, if retention is a figure being used by your firm, make sure that it also includes voluntary versus involuntary talent turnover for workers on assignment that takes the month, quarter and year into account. In addition, measure average overall time of employment, average number of talent on site, and whether the number of onsite talent appreciates over time.

3) Position vacancy rates. Staffing and recruiting professionals are often used to find a worker for a position faster and cheaper than an in-house human resource office. This means that every day a position is left unfilled an agency may be losing future orders from the client. Vacancies impact corporate revenue for a staffing and recruiting firm as well as the client. As a result, it’s imperative to find a person for the position in a timely manner and to ensure that the average vacancy time is not lengthy. ERE.net reported that it is a good idea to consider creating a standard vacancy rate so that recruiters have goals and benchmarks to measure their performance against.

At the end of the day staffing and recruiting professionals know that he/she who gets there first (with the right candidate/employee) – wins. Wisely using the reports and metrics possible through an advanced staffing and recruiting software system plays a crucial role in understanding and running operations that are consistently first.

Staffing Insights: Jon Osborne, VP of Research, Staffing Industry Analysts, on Key Staffing and Recruiting Trends

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The staffing and recruiting industry seems to get hotter with each passing day. New reports and changing hiring trends show staffing and recruiting professionals servicing nearly every industry. From the rising percentage of contingent labor to businesses preparing for the Affordable Care Act, to increased automation and improved usage of recruiting software and staffing software, the staffing and recruiting industry is rapidly adapting to changing market dynamics in order to succeed.

Jon Osborne, Vice President of Research & Editorial at Staffing Industry Analysts, sat down with us recently to talk about current trends and the future of the industry. At Staffing Industry Analysts, Osborne leads a team of research analysts who create thoughtful insight into the staffing industry and provide access to market research. Let’s see what he has to say about key trends impacting the staffing and recruiting industry, and how recruiting and staffing software fits with key trends.

What’s a key trend impacting the staffing industry?
“Within the last several months, the proportion of jobs that are part time has spiked enormously. So far, 77 percent of jobs created this year were part time and that’s what making all the news. However, when we look at that [figure] over a longer period of time, while it’s still elevated, it’s hardly as impressive,” said Osborne. “More broadly, we have the lowest ratio of full-time employment as a percent of population since 1983, at about 47 percent, and the low-point then was only temporary. We’ve been at the 47 percent level for a few years now, since 2010, and I don’t know another period that it has been like that for as long.  All this may affect the types of assignments requested by buyers and generally is indicative of continued weakness in the job market.”

What are the benefits of a contingent labor force for businesses? 
Contingent labor provides flexibility to a business so that it may scale up or down as needed. This flexibility allows the company to make effective changes to the size of its labor force depending on the strength of the economy and market demands for its products and/or services. In fact, there are trend watchers who predict that by 2020, 40 percent of the U.S. population will be  acting as free agents.

“This last recession was a bit of a learning experience for a lot of companies,” said Osborne. “If a buyer had a significant portion of contingent labor then they were well able to absorb the shock of the economic downturn. Organizations that typically only employ full-time, salaried workers found it much more difficult to adjust as necessary and had to turn to layoffs. This is very disruptive to your labor force and to cut, for example, 5 percent of staff is demoralizing and also results in high outplacement costs. Having a small layer of contingent workers, even 5 to 10 percent, allows a business to protect its permanent layer of workers. Contingent workers don’t have an expectation of long-term employment. As a result, no one [in this employment situation] bets the farm on a contingent job and so there’s much less damage to morale if the economy takes a downturn and cuts to contingent staff have to occur.”

“The number of contingent workers is growing, we have been surveying larger companies since 2005 and we are seeing that organizations are continuing to grow the number of contingent staff. When we first started tracking [the percentage of contingent staff, it] was around 10 percent and now it is 16 percent and expected to grow to 18 percent by next year.”

What are the benefits of the contingent labor trend for workers?
The growing percentage of contingent jobs being offered is not only beneficial for businesses. Workers in industries that fall under the professional sector, like finance, healthcare and tech, are demonstrating that the trend is providing a number of benefits.

“On the worker side, there is a demand in professional work for flexibility and also for higher wages. People who work on a contingent basis in IT or healthcare are typically doing it for lifestyle reasons. You can make $80 an hour for a few months and then live in Bali for a few months, and pick up another gig when you’re ready,” said Osborne.

Obviously, the perks of the contingent trend are felt by more in-demand professions. Fields that require expert understanding of niche practices like those in the technology and healthcare sectors are providing professionals with access to more competitive advantages. Osborne went on to provide us with an example of careers with high and low demand and how the contingent labor trend is impacting employment in those fields.

“Occupational therapists have a very low unemployment rate. Employers are having such a difficult time finding quality workers for this field that staffing firms are tracking them from the moment they get accepted into a training program—before they’ve even taken a class; the wages for this job are high and the occupational therapist is able to set the terms. They choose when to work and employers pay more per hour,” said Osborne. “On the other end, clerical and office workers experience a more ‘try before you buy’ situation as companies like to hire temp workers to see if they are a good overall fit for the position. It’s hard to tell in an interview if the person is right for the job. So a three- to- six month contract provides a period of time to test the person’s fit.”

Why hire a staffing firm?
It’s not uncommon to hear detractors ask “what’s the point?” or “why do you need to hire them?” in reference to staffing firms. People often pose the question of whether it would be cheaper to handle hiring internally. However, despite these questions, there are many sound reasons and benefits to hiring a staffing or recruiting agency, such as access to leading recruiting and staffing software, to fill one or more positions in a company, especially contract or contingent employment positions, according to Osborne.

“Have you ever bought a sandwich? That’s just outsourcing a meal. [Staffing] is no different – it’s outsourcing at its finest,” he said. “As consumers, we outsource almost everything. We don’t build our own car or our own house. With staffing agencies, companies are turning toward a specialist who has mastered employment, turned it into a science and has been trained for the job – making the entire employment process faster and cheaper.”