INDUSTRY GROWTH A BOON, BUT CAUTION THE TECHNOLOGY BLIZZARD

A key message embedded in the American Staffing Association’s Annual Economic Analysis of the Staffing Industry says simply, “Labor market flexibility helps create jobs.” That distilled perspective captures many of the new underlying dynamics at work in our market today. And, customer service takes center stage.

While the economic projections for the staffing industry are strong and appear to be on a steady growth track for the next few years, the balancing side of the equation is trickier. As staffing providers connect millions of people to millions of job openings, the challenge to calibrate for highest productivity grows exponentially in strong economic cycles. It’s an ironic relationship that means, if business management doesn’t have the right tools in place to acquire, manage, track and process staffing for profit, the problems associated with inefficient staff management could erode anticipated profits. Careful decisions regarding staffing software management tools will serve business leaders to manage efficiently in today’s employment environment. Employers are hiring temporary staff for the usual reasons – absent employees, special projects, and busy peak cycles – but they are also turning to the temporary solution because they are hedging market conditions and want flexibility. The same is true of the workforce.

U.S. staffing companies placed an average of 2.5 million temporary employees per day in 2004, according to the American Staffing Association’s (ASA) sales survey. That’s an annual jump of 12.4 percent. And, correlating data supplied by the Bureau of Labor Statistics, shows that more employers and workers today want flexibility in their employment. Individuals want more time for family and other interests. They also want to be able to test industries and employers. The same can be said of the employers who routinely use temporary staffing providers to seed future permanent employees. The condition helps both sides obtain their objectives and minimize expensive resolution, frustration and failures later. Under these conditions, how does an organization best manage the flow of staff for highest productivity? Enter the integrated staffing technology solution. But beware the proverbial “magic bullet.”

Balance and Smarts in Tech Specifications
They key to successful staff management is balancing the internal resources with the actual needs. That means, watch for the slick sales pitch about a particular technology platform that may well be able to do the things its developers promise, but doesn’t deliver what you need. Don’t be oversold, or your problems will be compounded… Guaranteed.

In one example, the human resources director of a staffing firm, with several sites across four states, needed a software solution to manage his temporary staffing needs. He quickly found himself more confused than satisfied. Consultants and vendors barraged him with dizzying options, and frustrated, he chose one technology solution that was sure to deliver turnkey capabilities and all the reporting tools he would need. In the end, he had to scrap the complex and nifty looking system in favor of one with substantially less horsepower, but one that gave his team the solutions they needed to track and manage multi-office staffing activities. He ended up taking a short-term bath, but the newer streamlined system eased his company of clerical and accounting time, and internal management frustration. They saved direct and indirect costs and gained efficiencies.

Managing Skill Disparity
How many of us have interviewed the perfect employee only to find four months later that the person was the worst possible hire? Human nature is one of the toughest variables we handle each day. The quality of American staff abilities has been a long-standing concern nationwide, and is regularly referenced by the Fed as a key underlying issue we as a nation need to address and solve. A key role that staffing software providers can play is to help businesses manage their time and staffing efficiently top line to bottom line. With a properly aligned technology platform, staffing acquisition, management and productivity can be tracked nearly in real time and management can make informed decisions about future performance.

Looking Ahead
By most accounts, our industry will continue strong double-digit growth into 2006 and beyond. As the economic indicators show, interest rates will continue to creep up in step with a strengthening economy and inflation. That means fewer people will be circulating in and out of jobs, making it difficult for businesses to find skilled workers. Ironically, according to The Society for Human Resource Management and Career Journal, almost three-quarters of employees are seeking new jobs, which telegraphs a jump in employee turnover. As staffing providers seize this strong market, we’ll want to offer our clients consulting services and supporting technology solutions in an honest and informed spirit of partnership.

And, as reported by ASA, the best news of all: as the economy gains momentum and businesses grow, they will find themselves short of the staff support, just as they need the help. Let’s all be sure we understand the state of mind and needs of management and give them exactly what they need. Doing that, we all win.

Tom Sarach, Jr. is the Vice President of Operations for COATS, Inc., based in Virginia Beach, VA. He can be contacted at 757.499.3808.