Is differentiation in IT staffing actually possible?

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Over the past few years, I’ve worked with a lot of IT staffing companies. As a marketer, I’ve been trained that the secret to marketing success is differentiation—

  • To stake out your position in the market…
  • Demonstrate how your product or services are unique…
  • And show how you can deliver value no one else can.

But when it comes to IT staffing, do these rules apply?

The differentiation challenge in IT Staffing

I won’t say that differentiation in IT staffing is impossible; it’s just harder than it is in other sectors of our industry. Here’s why:

Most IT staffing companies are using the same differentiation.

While some of the firms I’ve worked with—and researched—are truly differentiated, most are providing nearly identical services. Typically, their main points of differentiation are things like how well they get to know their clients, the quality of their recruiting teams, their ability to deliver “right fit” talent, and/or the relationships they build with their consultants.

While these are all excellent service traits, they don’t truly differentiate any company. No one is out there promising low touch service, low budget recruiting, and low quality candidates. While I truly believe that every company I’ve consulted with does live the value of service excellence, that value does not differentiate these firms from others who live by the same values (or even worse those who say they provide service excellence and then fall short on delivery).

Clients don’t care about IT staffing.

This may be the most disheartening thing I find about marketing IT staffing services. You are selling to an audience (IT managers) that desperately needs the services you offer, but staffing is the last thing on their minds. Well that is, until a key developer quits, a project heads south, or some other 11th hour staffing emergency occurs.

And even when the client does focus on staffing issues, they tend to commoditize their own needs by simply stating things like “we need a java developer” and thinking that’s a complete job requisition.

The challenge in marketing IT staffing is that the value of IT staffing services (for the hiring manager) has almost nothing to do with staffing services. It’s more often about the value of a successful project to the manager (i.e.. based on that manager’s personal goals and motivations), the need to hit a specific deadline, the lack of internal depth or expertise, or the value of IT to the organization (based on the economic value of successful project completion—or risk of project failure).

Consultants only care about money.

Okay this statement is not quite true, but compensation is the number one motivator for IT consultants (we know because we just did a research study with more than 300 of them). And as one of my clients recently told me, we can’t simply pay more to our consultants. We have limitations based on the roles we are trying to fill, and another staffing firm might come along looking to fill a different role for a different company and be able to offer the same consultant considerably more pay.

The quality (and reputation) of an IT staffing firm is largely determined by the consultants that firm places. However, because pay is a top motivator, consultants are likely to work for multiple IT staffing firms. This makes differentiation based on candidate quality impossible to achieve…almost.

So what can an IT staffing firm do to differentiate?

Don’t expect any easy answers here. And some of what I am about to suggest will seem foolish or unrealistic for many IT staffing firms (especially larger firms), but unless you want to continue to slug it out with the VMS / MSP suppliers that are solely focused on sourcing efficiency and driving down margins, you need to consider every possibly strategy to make your first stand out.

Option 1: Focus

Pick a niche within IT where you can truly differentiate based on your knowledge and recruiting skill. Most IT staffing firms are generalist that will fill any technical role. But clients don’t want generalists. They want recruiters with specialized knowledge of the specific kinds of technical and functional IT needs they have.

A niche focus can be based on industry sectors like application development, analytics, networking, security, etc. It can be based on vertical market expertise like healthcare, finance, government, etc. It can be based on specific technologies like SAP or Salesforce. Or it can even be based on specific types of clients like high tech start ups, Tier 1 consulting firms, or midtier IT departments in specific geographic markets.

The key to a successful focus strategy is to figure out where you can be the BEST IN THE WORLD—the company with the best knowledge of the clients you service, technologies you support, and kinds of people you recruit.

Option 2: Project Solutions

Some of the most successful IT staffing companies don’t position themselves as staffing companies at all. These firms sell solutions to specific IT problems through SOW agreements where the staffing firm (solutions provider) takes responsibility for the deliverable and not just the talent.

If you are not already in the solutions business, please note that it is an entirely different business than staffing. Your responsibilities are greater, your costs are higher, and the headaches are bigger. But the bill rates and potential rewards are also bigger.

Best of all, solution sales most often don’t have to go through HR or procurement, you are not subject to time limits on the consultants you supply, and solutions work can open the door for contract staffing sales.

Option 3: Candidate Experience

Most IT consultants see very little difference between one staffing firm and another. And as noted, compensation is their top motivator. But it is not their only motivator. Consultants want to work for companies that are great employers. Companies that communicate thoroughly and effectively. Companies that are proactive about helping their consultants obtain the best job opportunities. Companies that truly put their consultants first.

The key to winning on candidate experience is to craft an experience that is superior than the competition and then make experience delivery core to your organizations culture. Several years ago, I attended the Staffing Industry Executive forum, and I had the privilege of hearing the CEO of Signature Consultants talk about how be built a $500M contract staffing organization. His advice was simple (and funny). He said “when I started my company, I was too stupid to know that my consultants were not my employees, so I always treated them like they were. Turns out that was the secret to our differentiation!”

What’s right for your business?

The ideas listed above are certainly not the only ways to differentiate an IT staffing firm, but they are three of the most effective I have seen. The hard part for most business owners is to select one path to follow. By definition, when you choose your differentiation, you are picking PART of the market to focus on—and EXCLUDING the rest.

Differentiation can be scary, but it is achievable. Pick your piece of turf to defend. Don’t try to be all things to all people. If you do this effectively, you’ll find that sales is a lot easier—and he margins are a lot better!

This article was written by Haley Marketing. If you need help with marketing for your IT staffing firm, please contact us at 1.888.696.2900 or visit www.haleymarketing.com.

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