If you are like most firms, you are not operating at half your potential nor are structured to realize the full value of your staffing firm. Whether your goal is to expand operations or maintain status quo, it is assumed that your definition of success includes maximizing profit, maximizing satisfaction and building the long term value of your firm. As the provider of a widely-used applicant tracking system, our company sees both successful and not so successful staffing firms and more importantly, factors that seem to create this differentiation.
One major ingredient to a staffing firm’s success is the existence of clearly defined, scalable and quantifiable PROCESSES. There is a factory line process to marketing your services, generating new clients and job orders, recruiting new candidates and making placements. If you’re like most firms, you work from experience and instinct, and follow assumed procedures that have naturally been formulated.
The problem is that most firms are owner-centric and have few well-established processes. Consider the average staffing firm with about six recruiters. Quite often, the firm was started by one or two key rainmakers able to generate significant billings who could instinctively attack any problem or opportunity. One day, the owners decided to add new recruiters to the payroll in hopes of expanding profitability. However, the reality they find is that with each additional employee, more time is devoted to managing less productive employees rather than rainmaking. Thus, profits do not expand in proportion to number of new employees, expected performance is not reached and frustration sets in.
I believe one reason why the typical firm employs six recruiters is that there is a threshold where management of more employees becomes very difficult without well-established processes. Recruiting is a data intensive business with many steps required to move from point A to Z. As you add to recruiters and sales people, this becomes more and more of a challenge to manage without the proper procedures or management tools.
Successful firms have well-defined, quantifiable and scalable processes that:
- Provide employees direction and a measure for success
- Enable management to evaluate the success of the firm and employees
- Ensure consistent quality of services delivered
- Make the firm less reliant on the owner
- Build the value of the firm to a potential suitor
Establishment of processes is the foundation of your business. The steps in getting from point A to Z must be mapped and written down. New employees can use these for training, while existing employees can use them for reference. Processes must be quantifiable enabling you and your employees to measure success and spot bottlenecks or problems. Additionally, processes must be scalable so that you can add new employees or offices that will follow these same procedures.
Employees require direction and a means to quantify success. The reality is that employees are often expected to perform according to expectations never communicated by management. This is especially true in smaller firms where employees wear multiple hats and are expected to pick up slack where needed. Instead of defining internal processes and then assigning roles of accountability to employees, management often lets employees fall into roles based upon what slack they pickup. This may work for smaller firms, but as they grow, operations can quickly become chaotic.
Defining accountability and a measurement for success is crucial whether you have 3 recruiters or 300. Specific objectives enable an employee to focus and gain the satisfaction of achieving those objectives. They enable you to recognize and reward good work. They also enable you to quickly identify and address areas for improvement when necessary.
Processes are critical to consistently delivering high quality services, especially with staffing. Consider the number of open job orders you have and the number of candidate matches. Each one of those matching candidates must be moved through your workflow process. A well defined workflow process will enable you to generate reports showing the historical activity and the current stage of any job order/candidate match. Your firm maybe managing hundreds of matches at any given time and any detail that falls through the cracks could be a lost placement.
Statistics generated from quantifiable processes can dramatically help in planning and management. Consider the workflow process of a job order/candidate match when filling a job. When a match is created, you must track the source (Monster posting, Hot Jobs posting, referral, manual match, etc.). This enables you to determine the average number of matches generated by source. Then, as you move the job order/candidate match through the stages of the process, the candidate is either rejected or moves to the next stage. Through calculating the average success percentage at each stage, you can determine how many initial job order/candidate matches you need to result in one placement. Based upon tracking match source, you can estimate how much marketing is required to generate that number of initial job order/candidate matches.
Statistics can also be used to compare the performance of one recruiter to others. If a recruiter has a low success of moving candidates from the resume sent stage to the sendout interview stage, maybe they are sending too many or unqualified candidates. The time spent at each stage can also help you estimate the total time to placement and enable you to compare speed of moving matches through the process across all recruiters.
Good internal processes help make your business scalable. First, well-established processes help train and direct new employees. Second, they enable all employees to efficiently work together as you grow. Third, processes enable you to generate real time reports to measure the success of an individual, office, region or whole firm.
Many smaller firms tend to be owner centric. If the owner were to go on vacation…well, the owner can’t go on vacation and that’s the problem. Well established processes result in good organization and smooth internal processes. This enables an owner can leave for vacation without worry.
How does your firm stand in the eyes of a potential suitor? Owner-centric firms are less valuable to suitors because their operations require the owner to remain on staff. The firm’s value will reside in the recurring revenue generated through efficient operations, not in the magic of the owner. For maximum value, the owner needs to be able to step away from the firm without throwing operations into a downward spiral. Imagine the increase in value you could obtain by presenting a suitor with a full operations manual including real time reports showing operating activity.
Technology and Process
There is tremendous value in establishing processes within your firm, but you must be able to manage those processes and related data quickly. If the creation of procedures is the first ingredient to success, the second ingredient is exploiting the right technology to enhance and manage those procedures. Within the staffing industry, applicant tracking systems (ATS) are used to store candidate and client data, automate specific procedures, and manage the entire workflow process. If you establish internal processes, but have no way to efficiently manage the data and generate real-time reports, you will be at a severe disadvantage in the market.
The ATS along with established procedures make up the foundation of your business. With a strong foundation, you can maximize the productivity of each employee and grow your business. As you add new employees or offices, the Application Service Provider model enables recruiters in different locations to work from the same database in real time, all adhering to the same processes.
Your ATS must measure and manage the workflow process, especially the process of moving a job order - candidate match from the initial search to the final placement. The ATS must fit your processes, so be sure to customize the stages of the workflow process to suit your needs. This will enable you to generate the statistics you need to determine success.
For managing the processes on a day to day basis, make sure you have the ability to view all active job order/candidate matches along with their current stage in the workflow process on one screen. You should also be able to quickly view the historical movement of that match through the stages of the process.
An ATS is a requirement to automate, enhance and measure the procedures you create for your firm. Together, these will help you generate additional profitability, reduce management stress and create value in the eyes of a potential suitor.