Weekly inspiration for the staffing industry.

Part 1: Getting Ready to Plan

The U.S. staffing industry is up nearly 30% in 2010. And both Staffing Industry Analysts and the American Staffing Association are forecasting continued growth in 2011.

But what about your business? How much will you grow? And what's your strategy for getting there?

They say a rising river raises all boats. So if you just go with the flow, and keep doing what you are doing, you can expect some growth.

But will it be enough? Will going with the flow accomplish your goals? And more importantly, will it be enough to keep the competition from stealing your current clients?

Five Trends to Consider

Before you finalize your plans for 2011, consider the following:

	Economic uncertainty remains rampant. We still don't know what tax rates will look like for 2011, much less how the global economy will change next year. While uncertainty can be a good thing for staffing (since employers are reluctant to hire full-time), it's tough for planning. What would you do if the economy continued as is? What would you do if the growth rate doubled? Or more frighteningly, what would you do if we went back to a year like 2009...or worse? When developing your strategies for 2011, you should develop three scenarios--best case, worst case and most likely. Look at your growth goals under each scenario and then determine what you would do to achieve those goals.
	The competition will get more aggressive. It's no secret that your competitors are going after your best clients. In 2011, they're going to get more aggressive. They're going to hire more sales people. They're going to make more calls. And they are going to offer lower rates. Are you ready to defend your business? In setting your plans for 2011, you need to think about where you will find new business and, just as importantly, how you will protect your existing business. Get out and interview all your major accounts. Understand the real reasons why they choose you over the competition. Ask them questions like: "What do we do 'right'?" "What value do you get from our services?" "Why do you continue to use us over other firms?" "Under what circumstances would you change to another supplier?" "What else can we do to improve our services?" "Are there any areas where we are not meeting your expectations?" Based on what you learn, find ways to strengthen your relationships with your existing clients, broaden your network of contacts in these firms, and leverage your strengths to create either new services or increase barriers to switching from your firm to another staffing service.
	Disintermediation will continue. Services like Elance, Odesk, Guru.com and vWorker already offer ways for employers to find temporary talent without going through staffing firms. And for the record, these firms charge mark-ups of 10% or less. In 2011, we are going to see expanded growth in these services as employers look for more ways to get work done without hiring. For staffing companies, our challenge is to find ways to deliver greater value than these direct "employer to contractor" services. For most staffing firms, your value will continue to come from: Candidate sourcing - finding the hard to find talent Vetting talent - verifying skills, experience and other credentials Matching - ensuring the right skills and cultural fit Making the process easier - doing the talent acquisition and management work for your clients Some firms may want to take things a step further by moving up the value chain by taking responsibility for results and offering project solutions and/or higher level human capital/talent management consulting services.
	Legislation. While we've seen a lot of changes in the political landscape over the past two months, the reality is that we now have a situation in which gridlock is the most likely outcome from Washington, D.C. While gridlock actually tends to be good for the U.S. economy, it won't be very helpful as we plan to address the impact of healthcare reform, SUI increases, and many other employment issues. To compound matters, many states are running out of money, and who knows what legislation they will enact to help balance their budgets. So what will happen? No one knows! Right now, we have to plan for the worst and hope for the best. While a discussion of the full impact of healthcare legislation, unemployment taxes, and other legal issues is beyond the scope of this article, you can assume that your costs are going up...a lot. Now is the time to evaluate your options, determine what you can and will do, and work with your clients to proactively address these issues. Your first step should be to attend every ASA or Staffing Industry Analyst workshop on employment law changes. Make sure you are as up to speed as you can be on the issues. Then you should meet with your accountant, and possibly your attorney, to review the likely impact on your business and determine your options for issues like healthcare benefits, employee work schedules, managing unemployment and work comp risks, etc. And once you have a firm grasp on the issues, likely costs, and your options, meet with your clients. Talk with them about the issues and the potential impact on your clients' businesses. See how these issues will impact their demand for temporary and direct employees, and brainstorm ways you can work together to plan and manage the risks and expenses.
	Worker dissatisfaction. This is a big issue that's likely to affect the labor market in 2011. Employees are more unhappy than they have ever been. They're tired of feeling stressed out about their jobs. They're fed up with the relentless pressure to "do more." And they are actively looking for new opportunities. This is a GREAT opportunity for you! How can you become a magnet for "A level" talent? How can you help people to find new jobs or, just as importantly, give people more control over their careers? You already know the answers to these questions, but now you have to put them into action. Now is the time to be a champion for top talent. Help people advance their careers. Give them the control they want. Now is the time to go from being a talent scout to a talent agent. Look for ways to reinvent your candidate services (and the candidate experience) to deliver superior value to the top candidates in the niche you serve. For example, you could: Streamline your application process to make it easier for candidates Provide more career guidance and coaching services Focus on specific job disciplines Increase your pay rates (and bill rates) Become a true agent that represents talent and markets them to the right employers

2011 Planning Starts with Understanding

In the next issue of The Idea Club, we're going to present 20 ideas for increasing market share and generating new opportunities to sell staffing. But before you read these ideas, take a little time to evaluate the current landscape, better understand your clients, your competitors, your changing costs, and the legislative risks you're going to face. With this data, you'll be ready to select the right growth strategies for your firm.