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Your Path to a Brighter Staffing Future

These are dark times quote
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These are dark times quote

Okay, I am probably too old to be as big of a Harry Potter geek as I am, but my kids were such Harry Potter junkies that I caught the bug.

And as I thought about writing this post, this quote was the first that came to mind.

While we are not facing down an evil Lord Voldemort, we are facing an enemy we cannot control. An enemy that has taken far too many lives, hurt many people and created unprecedented challenges in the economy.


Yes, our Voldemort is COVID-19.

We’re facing a disease for which there is currently no vaccine and no proven treatment. Much like Voldemort, it has taken over the world and caused everyone to live in fear.

We even have our own Ministry of Magic and Daily Prophet barraging us with information (and misinformation) that panders to our fears and creates distrust and discomfort in living our lives. Need proof? Spend 15 minutes on social media. Or consider what it feels like to head to your local grocery store!

Thanks to the evils of COVID-19, unemployment officially hit 14.7% with estimates that it is actually already above 20%. For comparison, the peak of the Great Depression was 24.9%.

We’ve closed most of the world economy for the better part of two months, and even as we are reopening, people are genuinely afraid to go back to work. No one knows how to resume “normal” life.

To compound matters, many people can earn more for the next four months by remaining unemployed, so where is the incentive to get back to work?


Indeed, these are dark times.

But that doesn’t mean they have to be dark times for your staffing business. Quite the contrary. We’re seeing evidence across the country of staffing and recruiting companies that are not just surviving, they are thriving. (And not just in sectors like healthcare and IT).

So, what can you do to help your company put the darkness in the past? Where are your Deathly Hallows* that enable you to defeat the enemy we face?

* For non-Harry Potter fans, the Deathly Hallows are three magical objects that gave a person mastery over death. In this case, we’ll take mastery over current economic conditions!


Your path to brighter days

Path 1: Hunker down and wait it out.

This is the “knee-jerk reaction” strategy used by many companies that face tough times. They cut costs. Furlough or fire employees. Eliminate investments in technology and training. And slash their marketing budgets.

While this strategy does work (if you can keep costs below revenue), it seriously impedes recovery. I recently read a Harvard Business Review article originally written in 2010 (Roaring Out of Recession), where the authors studied 4,700 public companies to see what worked and what did not work coming out of the Great Recession.

The companies that survived solely by cutting costs, saw larger declines in revenue and took longer to see a recovery in sales or profits. Three years after the Great Recession, the cost-cutters grew by an average of 6% in sales and 4% in profits, while their peers who were more aggressive grew sales by 13% and profits by 12% in the same time period.


Path 2: Work harder.

This strategy is the one most commonly used in the staffing industry to survive downturns. Like the hunker down group, the Work Harder companies cut expenses everywhere they can. They also cut staff, close offices, and delay or cancel investments in growth, professional development, and marketing.

Unlike the pure Hunker Down group, these companies get aggressive about selling. Everyone becomes a salesperson. Call quotas are increased. Email and LinkedIn outreach soars. And probably the smartest thing these companies do is get closer to clients. They try to have more conversations with their current contacts and to expand their network of contacts within each client.

For Work Harder` companies, survival is about being the first to discover new sales opportunities—and then the fastest to fill those needs. And this strategy works! While I don’t have any statistical data from past recessions, I know from working with staffing companies after the 2001-2002 recession and the Great Recession that aggressive selling works. Most of the companies I know that pursued this strategy survived and prospered in the years following the downturns.

However, the Work Harder strategy comes at a cost. The cost is in damage to morale, excessive turnover, and negative impact on a company’s reputation. More cold calls do not equal happier employees. Staffing (and recruiting) is already a hard business. According to research by the American Staffing Association, the average annual turnover of recruiters and staffing salespeople is 25% (and that’s in good times).

Forcing stressed employees to “make more calls” leads to higher rates of attrition, and over time it will negatively impact a company’s ability to sell, recruit, and service clients.

And more calls do not create happier clients. Need proof? Go to LinkedIn and look at the comments from HR professionals. Our industry is being accused of being “tone deaf” and insensitive to the needs of employers and employees. Need more proof? Go to social media and look at recent reviews of staffing companies.


Path 3: Work harder…and smarter.

In the HBR article that I referenced, the authors referred to these types of companies as “progressive.” They cut costs—where it made sense. And they got aggressive about finding and capitalizing on opportunities.

From a cost-cutting perspective, progressive companies only cut non-essential expenses. Rather than cutting people, they look to revamp processes to build cost-savings in the way they do business.

For staffing companies today, this means investing in process automation, outsourcing, and training to make every process easier, faster, and less costly to deliver. This can include:

  • Optimizing websites to maximize conversions of visitors to people who inquire or apply for a job.
  • Using chatbots to automate initial candidate screening.
  • Incorporating process automation like Sense or Herefish to improve communication with clients and candidates while reducing the administrative workload on recruiters.
  • Outsourcing sourcing.
  • Incorporating direct marketing into outbound sales processes to improve sales rep productivity.
  • Training recruiters and salespeople how to ask better questions and have more productive conversations with staffing buyers.

However, the biggest difference for the Work Harder…and Smarter companies is their willingness to make investments during the downturn to drive accelerated recovery.

In mid-2008, at the height of the Great Recession, we saw one of our largest clients dramatically increase their marketing investments. They implemented new tools to boost sales productivity, expanded marketing activities, and as a result, they were experiencing significant, positive revenue growth by mid-2009 and growth at more than double the staffing industry average 2009, 2010, 2011, and beyond.

So what do progressive companies invest in? According to the HBR article, they invest in developing new markets, strengthening their core capabilities, product R&D, and marketing.

In staffing, this can mean investments in:

  • Creating new services lines (recruiting for new skill disciplines).
  • Expanding into new geographic markets.
  • Moving up the value chain to provide project solutions or workforce management services.
  • Hiring top-performing salespeople and recruiters away from competitors.
  • Implementing new technology – upgrading an ATS or implementing an online staffing app.
  • Buying competitors to expand market share or add new recruiting capabilities.

And specifically from a marketing perspective, progressive companies will:

  • Incorporate more low-cost marketing techniques to increase visibility.
  • Better plan messaging to ensure the company “voice” matches the reality of the marketplace.
  • Create targeted promotions to drive immediate response.
  • Expand direct marketing to open doors with prospects and accelerate the sales process.
  • Upgrade the company website.
  • Invest in employment branding to improve the candidate experience and online reputation.
  • Double down on content marketing to increase visibility and strengthen positioning.
  • More aggressively market to current clients to add value, deepen relationships, and educate clients about new and better ways to use staffing services.
  • Recruit more (leveraging their ATS and social media) to fill job orders faster.
  • Strengthen company brands in their local market, leverage social media to help recruiters build personal brands, and create differentiation with product and service brands.


Your Cloak of Invisibility, Resurrection Stone and Elder Wand

Okay, you HP geeks know what I am talking about. To defeat Voldemort, Harry needed these three magical objects. To defeat COVID-19, you don’t need magic, you need:

  • Strategy.
    Will you hunker down? Work harder? Or work harder and smarter?
  • Courage.
    Investing in tough times is not easy. If you received a PPP loan, invest it. If you’re operating at a profit, save some…and invest the rest. Smart investments yield faster and bigger recovery.
  • Commitment.
    We’re probably facing a long, slow recovery. It may be hard to stay the course as business goes up and down in the coming months. But if you can stick to your plan…and keep your cash flow positive (even a positive $1 EBITDA keeps you in business), you will succeed!

Growing up, my dad offered two pieces of advice for getting through tough times that I’ll use to conclude this article:

  1. In a downturn, choose not to participate.
    Unless you are a multi-national corporation, your fate is not tied to the global market. Your success is determined by the decisions you make and the actions you take in your local market. Even in the Great Depression, 75% of Americans remained employed. In this recovery, there will be opportunities for staffing companies…if you choose to find them.
  2. Make the recession the “other guy’s problem.”
    Outwork And outperform your competition. That’s the best way to get to your brighter future.


Of course, we’re here to help.

If you need ideas for your company, check out our COVID-Recovery web page or the recorded webinars in our Lunch with Haley library.

If you want to talk about specific strategies and tactics for your business—or geek out on more Harry Potter references, call us at 1.888.696.2900.

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