By John Sumser
The Staffing Industry is not always seen as an integral part of HR. A complex universe of independent search consultants, sourcing professionals, temp agencies, boutique power brokers and contingency firms, the members of the staffing industry often have trouble acknowledging each other. With a host of competing trade groups, the industry is fragmented and regionalized.
By the narrowest definition, Staffing is limited to companies that provide temporary help services. About 7,000 firms (21,400 offices) have been in this business a year or more. The American Staffing Association represents 1,700 of those (14,500 offices). The problem with the definition is that any meaningful operation in the space has its fingers in contingency staffing, RPOs and the other forms of employment service.
There’s an unstated pecking order based on proximity to power, type of employee and type of service provided. The segregation is so complete that members of one group don’t see members of another as a part of a larger whole. It’s possible, even likely, that the deep segmentation reflects an underlying structure. The staffing industry (and HR as well) are more consistent by region and industry than as a standalone national entity. That sort of organization does not translate very well into a national trade association.
It’s an industry in transition, highly affected by disintermediation and organizational flattening. As project work and easy outsourcing begin to dominate the employment landscape, members of the staffing industry are having to radically rethink their game plan. Increasingly, speed and leverage are replacing the old boy network that was the industry’s /content/view/16/36/”>cialis generic brand meal ticket.
At the heart of this chaotic sprawl, you’ll find Bruce Steinberg. The self-effacing statistician monitors the employment situation from the perspective of the staffing universe. A long standing industry veteran, Steinberg is an independent consultant who simply knows and has worked with everyone in the game.
Bruce spends his energy trying to discover the truth in the data. Often, what he finds is less than perfectly palatable to the ‘staffing industry’. In 2003, he published “The Real Truth About Temporary Help Services”, a brief analysis that disproved the long held view that temporary help was a leading indicator of economic behavior. Four years later, he published a series called “Has Temporary Help Lost Its Mojo“. This article further dissected the relationship between temporary help and the overall economy.
His view, in part, is that the Temporary help business started to lose its relevance as job boards and other digital measures changed the balance of power. Temp workers are often a solution to a timing problem. Speed is the essential factor. So, if an employer can match the speed of the Temp firm with digital outreach, the need for the Temp firm disappears. As he says, “with the advances in technology (job boards, applicant tracking systems, etc.) there can be very little lag time between when an employer decides it needs a new worker and when that needed worker is found, further negating the need for a temporary help service to fill that gap.”
You might imagine that this is not a popular view. Temp Agency owners, like the newspaper classified /content/view/16/36/”>cialis generic brand advertising executives who precede them, would prefer a future that is an extension of the past. Steinberg’s data and newsletters keep the conversation on the table. Steinberg prides himself on having called the real estate bubble a Ponzi scheme in 2005. He routinely pokes and prods the industry into its future.
We talked about the future of HR.
From Steinberg’s perspective, there are four trends that are changing the face of HR. Interestingly, the all boil down to organizing work as a commodity process.
- Speed to hire drives essential changes in employer-employee relationships
With increased efficiency in hiring (in spite of the noisy crowd who says it isn’t so), there is less and less room for middlemen who simply arbitrage information imbalances. As data accumulates from everywhere, the role of the vendor will be to provide actual added value, not just a timing differential. Employment agency vendors will have to supplement their services with additional offerings in order to stay in business.
- Outsourcing and Offshoring force organizations to reconsider the way they create value
At the level of the organization where things are precise, repeatable and predictable, the game is won on cost and quality. It is easier for specialists to provide commodity services than to do it in house.
- Recessions are evidence of a gear shifting in the economy
This downturn is changing the way things get done in a permanent way. When its over, things won’t be like they used to be.
- Vendor Management Systems shift the power balance in favor of commoditization.
The widespread adoption of VMS is the final disruption of the old boy network. Slowly but surely, HR is emerging as a participant in its own future.
Follow Bruce Steinberg at his website. You may find some utility in his regular newsletters.