4 Ways Staffing Agencies Can Evolve To Survive The New Job Market

If it’s survival of the fittest, agencies with talent to offer need to keep up with demand of the companies they’re feeding.

4 Ways Staffing Agencies Can Evolve To Survive The New Job Market
[Photo: Flickr user Andrés Nieto Porras]

It’s a jobseeker’s market in many industries, and most staffing companies are fairly bullish on the market. And, while hiring is up in financial services, legal, oil and gas, education, and IT, there’s also a growing gap between the haves and have-nots when it comes to employment, which staffing agencies must learn to address.


While the recession and related job cuts are mostly behind us now, the aftermath has caused many people to disengage from the workforce after months, or perhaps years, of unemployment.

A growing number of young people who would have otherwise pursued a college degree have opted not to go that route, avoiding the debt and time commitment that they think would be wasted thanks to their inability to find gainful employment even with a degree. According to the Bureau of Labor Statistics, less than 66% of the high school class of 2013 enrolled in college last fall, compared to more than 70% in 2009.

Meanwhile, Pew Research Center found Baby Boomers to be retiring at a rate of about 10,000 every day, a number that will top 72.8 million retirees by 2030 according to the U.S. Census Bureau. And at the same time, the populations of Japan, Canada, Germany, Italy, and other European countries are aging into retirement even more quickly and taking their years of experience and knowledge with them.

Combined with challenges in U.S. immigration laws, these factors add up to a tough situation for staffing agencies. While there may be many vacancies to fill, the pipeline of qualified, educated contractors to fill them is dwindling.

On the bright side for staffing agencies, many employers are not willing to commit to the direct hire of full-time employees and would much rather fill open positions with contractors through a staffing agency. A growing number of jobseekers feel the same way: Many would much prefer to work as consultants, freelancers, or through staffing agencies so their livelihood and destiny aren’t dependent on the success or failure of a single entity.

Perhaps having been burned by an employer who didn’t reciprocate their loyalty, some employees like the protection and service of a staffing agency that will advocate and do the hard work of finding employment opportunities on their behalf, somewhat like a real estate agent.


Rather than simply enjoying this renaissance, though, staffing agencies need to be thinking about sustainability. How will you keep the talent funnel full, attract candidates to the agency over full-time employment, and serve the changing needs of employers? Here are four tips that can help staffing agencies stay ahead of the curve.

1. Focus On The Contractor Experience

To cultivate a sustainable talent funnel, emphasize the perks that matter most to contractors that a direct employer cannot provide. For example, agencies can provide the flexibility to work just three months out of the year if desired, and the variety of working in different locations and environments, rather than in the same cubicle with the same coworkers for the next 10 years.

Agencies can give workers a sense of greater control over their own destiny, while serving as an agent to place them in the best opportunities–and do the hard work of finding them a new placement if that opportunity comes to an end. This can help reduce churn and maintain the talent pool.

2. Be Customer-centric On The Placement Side

Understand what employers are looking for in placements and build a community of candidates that embody those credentials. Staffing agencies offer a community of expertise and cross-pollination of talent that direct hiring can’t provide.

Agencies can “Moneyball” a talent pool by putting together a dream team based on credentials, where employers must rely on conventional recruiting and hiring practices. This approach positions you as more than a staffing firm, but as a strategic partner who’s invested in meeting the employers’ business and growth objectives.

3. Pool Your Data

If your customer relationship management system is separate from your applicant tracking system (ATS), which is separate from your back office, watch out–you may lose your competitive edge.


Not only are you losing precious time through batch integrations, manual uploads, or double data entry, but lack of end-to-end visibility means you can’t run as aggressively as others working on a single platform. You need to know when the best contractors are coming off placement to ensure you keep them working, and if you can forecast pays more accurately, you can invest more of your margin toward future growth.

The decision about a platform to run your business should extend beyond simply an ATS, and it should consider the future-proof value of the technology.

4. Don’t Ignore Social Media

Sites like LinkedIn and other industry-specific professional networks have had a major impact on staffing firms, bringing transparency to the job search and recruiting process. In some cases, they have leveled the playing field in the knowledge industries. Staffing firms must go deeper to highlight the advantages they offer beyond social media, for both contractors and employers.

While it’s true that the new employment landscape bodes favorably for the staffing agency model, it’s never safe to rest on your laurels and continue to focus on the short term. In order to thrive, firms must focus on sustainability, retention, and cultivating a deeper, longer-term talent pool. Those who fail to adjust their business model and change their approach to become a strategic partner will not survive in the new employment era.

Ted Elliott serves as the chairman of the board and chief executive officer of Jobscience, Inc. He pioneered the development of Internet and database systems at OPV Lifescience Partners, served as president of Jobscience, Inc., and from 1993 to 1995, he served as a consultant at Maczkov Biosciences, Inc. In 1997 Elliott cofounded Zarix Ltd. and served as its general counsel.