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Ask Haley: How can small staffing firms compete with the big boys?

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Q: With all that’s going on in the market, how can small staffing firms compete with the big boys?

A: Here are Six Ways Small Firms Can Compete and Win in Today’s Economy:
1. Pick a tightly defined niche. 

Big companies need big opportunities.  The more tightly defined the niche, the harder it is for larger firms to compete.  For example, we worked with one staffing firm that solely staffed oncology technicians.  We work with another that staffs technical writers.  The challenge is to pick a niche where you can be the expert (either in terms of industry knowledge, recruiting ability, or access to talent).  Then, the small staffing firm can market with laser-like precision to go after opportunities for which they are the best fit.

2. Focus on small accounts.

I’ve spoken to a number of larger staffing firms lately that have a stated minimum target account.  That minimum would be a fairly sizable account for many small staffing firms.  By focusing on small accounts, the small staffing firm will have less competition. And even more significantly, there’s often no HR department or a very small HR department, so you can sell solutions to real decision-makers.  With businesses looking for creative ways to lower costs and drive new revenue sources, focusing on small accounts may be the best strategy for small staffing firms.

3. Market more aggressively in a limited geography. 

The bigger your target market, the more it costs to reach them. By focusing on a very limited geographic market, even a very small staffing firm could afford to be an aggressive marketer.  I spoke with Eric Gregg of the Inavero Institute for Service Research, and he told me about a study they just conducted in which the average HR person could not name more than two staffing firms beyond their current vendors.  For small firms, highly targeted marketing may be the key to differentiation.

4. Change your business model. 

A small staffing company can redefine the business they are in much more easily than a larger firm.  In the next 6 to 12 months, there’s going to be a lot less demand for traditional staffing services.  So, when people are not buying staffing, you have to sell them something else.  Small firms may have the opportunity to do things like outsource support functions, provide project solutions, offer outplacement, provide unbundled recruiting services, offer retention consulting, or even partner with other local companies like consultants to offer solutions that combine the consultant’s expertise with the staffing firm’s ability to provide on-demand talent. 

5. Partner with complimentary service providers. 

Small staffing firms can gain a big advantage in the market by partnering with other small staffing firms in non-competitive niches (and sometimes even in the same niche).  By partnering, each of the partners can leverage the client relationships and selling abilities of the other firms to discover new opportunities. And by partnering with a direct competitor, a local staffing firm could take on a larger client.

6. Be more aggressive without being a pest. 

Small firms are already great at providing service.  The challenge is staying top-of-mind when clients aren’t using your service. By using tools like email, direct mail, local market search engine optimization, seminars, webinars and community involvement, small firms can out market the big guys in a specific market. By focusing on providing education, useful information pertaining to managing people, and nurturing relationships, small firms can become more visible without antagonizing clients and prospects.

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