Mistakes that Prevent Staffing Agency Growth

The U.S. staffing market is booming. Not only is the industry expected to grow to 147 billion dollars in 2018, it is also outpacing other industries in overall economic and employment growth. Time to tap into this potential and expand your staffing company.

Every staffing company dreads hitting a point where their growth becomes stagnant, especially after previously experiencing increased revenue, production and placement. So, what are some common mistakes staffing agencies make that prevent growth?

The difference between small to midsized staffing companies that continue to grow and those locked in the same place boils down to some overlooked staffing agencies mistakes.

Common Mistakes for Staffing Agencies to Avoid

1. Best value propositions getting ignored

Almost every staffing and recruiting firm has a list of value propositions that makes them “unique.” However, very few of these proclaimed benefits are actually one-of-a-kind.

For example, every staffing agency at some point advertised the ability to find top-notch candidates who aren’t available anywhere else. This claim has been purported so much that prospective clients no longer believe it. Unless you have a secret laboratory hidden in the woods where you’re raising the next generation of professionals, then you’re most likely working with the same talent pool as everyone else.

Instead of being vague about what value your company adds, take your staffing agency to the next level by highlighting one or two specific features where your brand stands out among competitors, such as high retention or closing rates that align with business needs.

2. Not maximizing top performers’ value

The staffing industry is highly competitive, which means that recruiting agencies need to strategize the use of their internal talent – especially their top performers. They are the ones who increase revenue, placement, and growth targets. Their time should be spent building connections, overcoming objections, and closing deals. As these actions yield business growth, it’s important to prioritize them above all else.

Don’t have your top people perform time-wasting tasks that fall outside of their most productive skillset. These tasks include administrative, screening, and onboarding duties. Other members of your team can take on these responsibilities, so you can have your top performers work on growing the business. Understanding team dynamics is crucial here, as it ensures that the right people are handling the right tasks, maximizing efficiency and productivity.

3. Failing to attract candidates in the recruitment process

One of the main reasons temporary staffing agencies stop growing is due to the lack of the inability to foster a steady flow of quality candidates. Ask yourself this: why is your brand the perfect fit for potential candidates? Their time is valuable, prove that your services are too.

Create brand awareness by sponsoring community events and focusing on content marketing. Both strategies will put your agency out there as a strong presence in the industry and will make candidates trust you as a source of career advice. A well-structured recruitment process will attract more candidates, leading to a faster growing agency.

4. Limited tracking of operational measures

It is crucial to track various metrics in order to monitor success. In the business world, understanding these metrics can determine the areas of improvement that are crucial for growth. Only measuring metrics such as profit or revenue is a big mistake that keeps your staffing firm from growing. It limits the ability to make accurate decisions. Data can tell you what contributed to profitability and what hindered growth, use it!

Some examples of what you should be monitoring would be overall candidates received per week, which recruiters seem to be getting the most leads, who is closing the most deals, etc.

5. Not utilizing technology

The right software should supply powerful reporting and analytics tools to monitor performance, as well as save recruiting and sales teams time to increase productivity.

A common pitfall for staffing agencies is a failure to use the technology at their disposal. This is especially crucial in sectors like the manufacturing industry, where choosing the right IT staffing firm can meet unique business needs. Use social media, like LinkedIn, for recruiting. You can also use texting on mobile phones to conveniently reach potential candidates at any time of the day. Growing your staffing agency doesn’t have to be expensive with these little tricks.

6. Lack of in-person engagement with candidates

It’s important to use technology, but face-to-face interactions will never go out of style in the hiring process. Due to the fast-paced environment of the staffing industry, it’s easy for recruiters to become so task-oriented that the only interactions occur between computer screens. Recruiting professionals should be encouraged to leave their desks and meet with prospects. Constantly maintain a networking mindset and watch your staffing agency grow.

7. Not making payroll on time

Sometimes you have to wait 45 to 60 days for your clients to pay you. Staffing agencies are expected to pay the differences out pocket until they receive funds from their clients. Waiting to pay your employees is one of the biggest staffing agencies mistakes that prevent growth because top recruiters won’t work for you if you aren’t paying them.

Staffing payroll funding can help to bridge this capital gap. Besides establishing funding, you should set up a payroll system. This ensures employees are paid on a regular basis, and will calculate overtime, vacation, and holiday pay. Avoiding unsuitable candidates is also crucial to ensure that your staffing process is efficient and effective.

Additional Critical Mistakes

8. High levels of employee turnover

High levels of employee turnover can be a significant roadblock to a staffing agency’s success. Not only does it lead to increased recruitment costs, but it also tarnishes the agency’s reputation and hampers its ability to deliver top-notch services to clients. Staffing agency owners should prioritize creating a positive company culture that fosters employee satisfaction and loyalty. This includes offering competitive compensation and benefits, as well as providing ample opportunities for professional growth and development. By focusing on these areas, staffing agencies can reduce turnover rates and maintain a stable, skilled workforce that drives business growth.

9. Lack of proper onboarding processes

A lack of proper onboarding processes can result in confusion, frustration, and ultimately, high employee turnover. Staffing agencies should invest in creating a comprehensive onboarding program that includes thorough training, mentorship, and clear communication of expectations. This approach helps new employees feel welcomed, supported, and well-equipped to succeed in their roles. Prioritizing onboarding not only improves employee retention but also boosts productivity and job satisfaction, leading to a more efficient and effective staffing agency.

10. Unclear job descriptions and expectations

Unclear job descriptions and expectations can lead to misunderstandings, miscommunication, and subpar performance. Staffing agencies must ensure that job descriptions are accurate, concise, and clearly outline the responsibilities, skills, and qualifications required for each role. By doing so, they can attract the right candidates, reduce the risk of misplacement, and enhance the overall quality of their recruitment services. Clear job descriptions set the stage for successful placements and satisfied clients.

11. Operating without a niche

Operating without a niche can make it challenging for staffing agencies to stand out from the competition and attract high-quality clients. By specializing in a specific industry or job function, staffing agencies can gain a deeper understanding of their clients’ needs, build stronger relationships, and deliver more targeted and effective recruitment solutions. Identifying and focusing on a niche allows staffing agencies to establish themselves as experts in their field, attracting a loyal client base and driving business growth.

12. Not understanding the competition and how to differentiate yourself

Failing to understand the competition and how to differentiate yourself can lead to a lack of competitiveness and poor market positioning. Staffing agencies should conduct thorough market research to identify their competitors, understand their strengths and weaknesses, and develop a unique selling proposition (USP) that sets them apart. By crafting a compelling value proposition, staffing agencies can attract high-quality clients and establish themselves as leaders in the staffing industry. Understanding the competition and differentiating yourself is crucial for long-term success and growth.

These additional critical mistakes highlight the importance of creating a positive company culture, investing in proper onboarding processes, developing clear job descriptions and expectations, operating within a niche, and understanding the competition and differentiating yourself. By avoiding these mistakes, staffing agencies can improve their recruitment services, attract high-quality clients, and establish themselves as leaders in the staffing industry.

Don’t let these challenges and staffing agencies mistakes stop you from growing your business and ensuring greater success. If you need assistance ensuring working capital for payroll or other staffing agency expenses, give us a call today.