Once upon a time — actually it was not that long ago — there was a stigma associated with the staffing industry. Ten to 15 years ago, I had to ensure the professional services and consulting firms I recruited for — even those that were part of global staffing firms — were not linked to staffing. The ‘staffing’ word was taboo.
In the past, staffing firms of all sizes and specialties were wrongly, yet commonly, categorized as low-margin “body shops” that filled openings but offered little-to-no strategic value. The stigma often placed staffing in the category of a commodity that businesses paid for begrudgingly.
Looking to establish strategic and lasting business partnerships and advisory roles, consulting firms did not want to be associated with staffing’s image: generalist, low-margin temp business. They asked me to remove staffing language and history from their stories, and I did. I took out the staffing moniker knowing that top business leaders would be eager to work for specialized, prestigious consulting firms and wary of ‘staffing.’
What a difference a decade can make. Today, the staffing stigma is fading fast and the consulting firms I serve have few, if any, concerns about the word or the work of staffing. In fact, sometimes it’s exactly what they want to talk about. What changed?
The Great Humbling of the Great Recession
The Great Recession was hard on every industry, but the staffing industry was able to hold its own. Demand for contingent staff was steady as employers froze hiring and looked for cost-effective ways to manage labor.
Consulting firms, on the other hand, struggled. Budgets for innovation, expansion and technology projects were cut. Human capital consulting firms—the same ones that wanted no reference to staffing in their business models—survived only on the coattails of their staffing firm counterparts. Today, humbled by recession and recovery, consulting firms are very quick to recognize the resiliency of the staffing model and the constancy of contingent talent needs.
Staffing Spend Has Grown Bigger and Steadier
If the resiliency of the staffing industry was made clear during the Great Recession, recovery from that same economic collapse has put staffing’s intrinsic value—labor force efficiency and flexibility—in the market spotlight. Businesses are maintaining higher-than-ever levels of contingent workforce spend.
The penetration rate of temporary talent in the U.S. workforce has never been greater. Last week, the U.S Bureau of Labor Statistics reported that the number of temp jobs as a percent of total employment hit a new high of 2.11 percent in October. Low unemployment in areas like technology, healthcare and engineering has also increased the demand for recruiting expertise and support.
Though the economy is years into recovery, businesses remain cautious when it comes to full-time hiring or even converting long-term contract employees to full-time staff. For many employers, contingent talent remains a high percentage of their workforce and they plan to grow it. A CareerBuilder/Harris study reported that 42 percent of employers plan to hire temporary or contract workers in 2014, which is up from 40 percent in 2013.
Staffing’s steady growth has elevated its prominence as an industry. Business leaders have made it a growing part of their ongoing labor strategy, rather than a stop-gap in times of economic bust or talent dearth. Consulting firms recognize that the constant foothold staffing has established is an opportunity hub for their own organizations. With staffing as a constant, consulting firms have a constant “in” at client organizations even as consulting projects ebb and flow.
Staffing Is Strategic
For decades the staffing industry has struggled to gain recognition as a service that offers a strategic value add. With the speed and complexity of today’s labor market, businesses are seeking new tools, technology and specialists — from VMS providers to HR outsourcers and RPO solutions — in order to improve how they manage their workforce. Expertise in contingent staffing is gradually becoming a sought-after business asset that consulting firms want to make a part of their organizations.
Just recently, I was asked to help find a CEO for a hybrid IT consulting and staffing firm. Though both sides of the business are of equal size and importance, it would be easy for them to say that “consulting represents a more sophisticated side of the business, and we want a CEO from the consulting industry who reflects that.” But that’s not what they said. Their direction to me was that if they had to choose between executives with consulting or staffing backgrounds, they would choose staffing over consulting. The staffing business from their perspective is more scalable. Three months ago they hired a new CEO with 15 years in the staffing industry. Their embrace of staffing industry experience and skills was a reminder of how differently today’s marketplace values the industry, its people and its work.
Blended Is Best
Today my consulting and professional services clients are embracing the blended model — a combination of consulting and staffing that increases resilience to economic shifts and offers constant client access and interaction. They have changed their staffing tune, embracing what was once a no-no word as an essential service. And as they do they are helping to kill off that old staffing stigma, turning what was once thought to be merely a supplementary service into a smarter, stronger and more strategic way to approach workforce management.