In September 2010, Staffing Industry Analysts conducted a survey with several top executives in the temporary staffing industry. These leaders shared what they thought were some of their worst mistakes and what they learned from them. Whether you are just starting out as a staffing agency manager or you have been in the business for years, you can learn from the advice of industry leaders. You will save time and money when you don’t repeat the same mistakes.
A temporary employment agency is only as strong as its best recruiter. Unfortunately, many leaders in the staffing industry make the mistake of hiring too hastily or expecting someone who did well in another industry to be a top performer in contingent staffing. This is an area where it is important for business owners to know their own limitations. They may have exceptional business skills in every other area except for hiring. The best salespeople are worth the high salaries and bonuses that they command, but those who don’t have the right skills are just wasting their employer’s money. The most successful staffing agencies create a hiring profile and stick to it closely when hiring recruiters.
The majority of business owners who responded to the survey reported that they learned from this mistake and made the decision to invest more resources into recruiting. They actually hire salespeople who are less experienced, provide them with company training and assign an experienced member of the sales team to mentor the new hire. This approach means that the staffing agency manager is able to match the talents of the sales staff with the needs of the organization much more closely.
Although it can be impossible to predict when an economic recession is about to hit, staffing agency managers should always be in a proactive state about company finances. Several respondents to the survey reported that they waited too long to start reducing their spending and this ended up costing them more money than it should have. During tough economic times, managers must decide if there is really enough money in the budget for travel, participating in conventions and getting involved in special projects. These things may be an everyday occurrence when times are good, but they turn into expensive luxuries when they are not. To avoid being overwhelmed by a recession, managers need to constantly access how their agencies are spending money and adjust their priorities if necessary.
Economic cycles are a reality in the business world. Staffing agency managers need to realize that when their clients are cutting costs, the first thing to go may be doing business with their company. Managers must have the ability to aggressively make cuts in order to ride out recessions and even minor economic downturns. If they don’t get a good handle on their spending, the company may not come through the depressed economic cycle intact.
Managers earn higher salaries because they must complete tasks that others are loathe to do. This includes firing people. When salespeople and internal office staff are clearly not working out, holding onto them only delays the inevitable and costs the organization money. Industry leaders reported that using a performance improvement plan sometimes helps employees get back on track. If they are still not performing up to expectations, managers have the proof in writing. While employees should be given ample opportunity to improve, it is critical to act quickly when it is obvious to everyone involved that the employee and the agency are a poor fit. This also frees up the employee to find something that is a better match for his or her talents.
It only takes one major accident for a staffing agency’s insurance rates to skyrocket. That is why managers of temporary employment companies can’t just take the client at his or her word that employees will be safe on the job. It is up to the staffing agency to send someone to the client’s site to investigate potential safety issues in person. While it is understandable that the agency doesn’t want to lose business, accepting assignments from an employer that doesn’t value safety costs more money in the end. The staffing agency must make accepting orders from clients contingent on fixing any safety issues noticed by its staff.
In the staffing industry, it can sometimes be difficult to determine what is a trend and what is just a passing fad. By the time a business owner figures it out, he or she may have lost months or years to the competition. Industry experts recommend always monitoring the market for new trends and knowing what the competition is doing. Once it is clear that a new trend is here to stay, temporary staffing agencies must develop a plan to incorporate it into their business if they want to remain competitive. Unfortunately, clients may drop staffing agencies that they perceive as being behind the times.
When business owners are anxious for their staffing agencies to succeed, they often pursue industry reports and try to run their organizations with the information these reports contain. The problem with that is that they are ignoring a key resource that is right in front of them. Salespeople, administrative staff and other in-house employees don’t just research the industry, they work in it every day. It is important to regularly ask for their feedback and incorporate their suggestions whenever possible. It is also a good idea for business owners to have a set of core values that they draw on to run their own organization. In-house employees should know the core values as well.
Another common mistake the survey respondents reported was trying to expand the reach of their staffing agency without doing adequate research first. This often happens because managers are trying to take on too many roles at the same time. While there is nothing wrong with expanding and trying to increase market share, staffing agency owners should remember their core business. When business owners try to take on too much, they are often overwhelmed and not effective at anything. That is one reason why it is so important for staffing company owners to find a specialty niche and focus most of their resources on growing it.
At the end of the survey, industry leaders had the opportunity to write in advice they would give to others. The following tips were included the most often: