New temporary staffing apps are popping up all over, allowing job seekers to sign up for work right through their phone, and employers to completely bypass staffing agencies.
How can my staffing firm compete with that?!
Channel your inner travel agent.
Decades ago, the travel industry faced a similar challenge when the internet made it easy for consumers to directly book their own flights and hotels. The agencies that survived learned to adapt – and so must your staffing firm.
No question, temp apps are going to become the low-cost player in the staffing market.
They will be easy for both the employer and job seeker, and over time may become trusted (like Uber has become trusted for transportation).
The challenge for traditional staffing companies is:
How do you compete?
To answer that question, you need to define your competitive advantages. Here are a few areas in which staffing agencies outperform apps:
Ability to recruit.
For now, you will have better access to talent.
Ability to vet talent.
An app may be able to track credentials and 5-star reviews, but most employers want to hire people who are the right fit for their companies. For a short-term fill-in, the app has the advantage, but for longer-term temp, temp-to-hire and direct hire, a recruiter should be able to provide a much better result than an app.
Staffing firms that provide drug screening, background checking, and credentialing and licensing verification also have a marked advantage; employers won’t get these essential services from a temp app (at least not yet).
Ability to manage / simplify the hiring process.
An app is a DIY way to hire. Most managers hate to hire, so what else can your agency do to make hiring easier for your clients? Consider how you can better help them to:
- plan for their hiring needs
- develop compelling job profiles
- source the right talent
- ensure talent is the right fit
- complete credentialing, reference checks, drug screening and background checks
- provide onboarding assistance
When technology displaces any industry, the industry must find ways to pivot to deliver more or create new value. For staffing, my opinion is that the industry needs to move up the value chain, doing more to make hiring easier and effective for employers. Apps can’t do this.
Apps are great for people looking for an extra shift or a few days’ work, but will job seekers want to go through an app to find a full-time job? Maybe. They are much more likely, however, to want to work with a company that provides free services to help them find the right job. An app can’t do that. What else can you do to add value for the job seeker? How can you build stronger relationships with the people you place?
An app will take anyone who can fog a mirror. While rating systems may help to separate the “great” from the “horrible,” a staffing company can do much more to ensure quality:
- Strategy 1 is to perform more in-depth vetting and provide more complete candidate information to the employer.
- Strategy 2 (and I’ve only seen one staffing company do this) is to hire the top performers as your own full-time employees, and then place them on assignments with your clients. This way you are taking the best people out of the labor pool, giving them full-time employment (with better benefits), and placing them with clients much like a consulting firm does with their clients.
What can staffing agencies learn from the travel industry?
Decades ago, the travel industry faced a similar challenge when the internet made it easy for consumers to directly book their own flights and hotels. Most travel agencies withered on the vine and eventually went out of business.
The survivors found niche markets to service that were outside of the DIY world of booking flights and hotels. They found new ways to create experiences for their clients, and they focused their resources on creating a service experience that matched what their target customers wanted.
In staffing, we need to be a little like the travel agents who survived:
- identify the right customers (clients and candidates)
- determine how to serve those customers in a way that technology alone cannot
- provide a better service experience
- deliver greater value
- make hiring / managing talent easier and more enjoyable than the DIY experience of using an app
Temp apps present an immediate and difficult challenge for the staffing industry.
If all you do is place people in job assignments, the app will win. If you deliver greater value and a better experience for the client and candidate, you will win.
As an example, UpWork is the market leader in online staffing. But while they offer a huge database of technical and creative talent, they can’t provide the kinds of personalized service that an IT or creative staffing agency can offer. This is why, even as UpWork grows, so do the traditional IT and creative staffing companies.
There’s a place for everyone in the staffing market. If you want to outlast the rise of temp apps, define your competitive advantages and claim your space in the market.
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