A tighter hiring market means companies must up their game

Today’s hiring market favors employers over candidates. But within the next few years, that’s expected to change.

“There is and will be talent available in the market,” says Donna Snyder, director of talent acquisition at Nesco Resource. “However, companies that are not differentiating themselves, either in how they market themselves or the position, may struggle to attract the right talent for the job.”

She says companies need to ensure they’re providing the tools, coaching, training or mentoring new employees need to succeed. Otherwise, they’re setting themselves — and their new hires — up for failure.

Smart Business spoke with Snyder about how companies can improve their recruiting and retention efforts.

What areas of recruiting do most companies need to improve?
The worst thing a company can do is post overly simplified job descriptions. The typical ad with its list of requirements doesn’t impart anything to applicants about the company’s culture, and leaves those who don’t check all the boxes no way to talk about their transferable skills.

Instead, give candidates a sense of what the organization is about in terms of its values and culture, and enough information about the job and its responsibilities to convey the essence of the position.

There are myriad places to publish recruiting ads today. To find what’s most effective takes trial and error because what works in one market for one type of position might not work in another.

Where do companies tend to go wrong once they have applicants for open positions?
Companies tend to eliminate candidates too readily based on the words or titles on a candidate’s resume rather than the value of the work they’ve performed, their responsibilities and what they have learned that could apply to the position. Being too literal about specific experience requirements ignores transferable skills.

There’s also the tendency to stick to traditional ways of thinking about longevity or length of employment. For example: a gap in employment doesn’t necessarily mean a candidate wasn’t employable. Sometimes, lengthy employment with one organization can signal a lack of ambition or unwillingness to change. Look deeper and have a conversation with candidates who otherwise seem to have high potential.

Companies should also work to balance how much interaction they have with applicants in the hiring process. It’s true that multiple interactions give companies a better sense of the candidates and what motivates them, but be careful that the process doesn’t go overboard and become painful for applicants.

What are the common causes of retention issues once a hire is made?
A bad hire could be the result of a company’s reluctance to present the more challenging aspects of the role and ask candidates questions to see how comfortable they are with those realities. Companies should be straightforward and share the elements of the culture, role and working conditions that aren’t flattering.

Onboarding can also be an area with significant problems. It’s a key component in employee retention, but is often overlooked. Onboarding starts before a new hire shows up on the first day, helps them get acclimated quickly into their new position and is their introduction to colleagues, the company and its clients.

A bad hire doesn’t always mean the company picked the wrong person. It just might not be properly preparing candidates for what’s to come.

In what ways might a staffing agency help companies address their hiring issues?
Staffing agencies are focused entirely on recruiting and have an army of people doing the work typically done by one or two people in an HR department.

Companies should look beyond their traditional hiring approach. Get creative with how and where job ads are posted, how they’re written and the requirements for a position. And ensure each candidate is provided with the tools they need to succeed in the company from day one.

As competition for talent intensifies, companies that can find novel ways of reaching, attracting and retaining candidates will find success.

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How staffing firms work with HR departments to supercharge recruiting

Human resource management is a complex endeavor that often requires HR managers to make difficult decisions about which tasks to prioritize, says David Lockhart, Executive Vice President at Nesco Resource.

“When you work in HR, you must deal with compliance issues, employee benefits, performance management and workplace safety, among other important matters that pertain to existing employees,” Lockhart says. “This makes it very difficult to devote meaningful time to one of the most important functions of a business — recruiting new employees.”

A growing number of companies are turning to staffing companies to boost HR departments’ ability to recruit efficiently.

“Staffing companies can help HR managers identify qualified candidates, do the preliminary screening and testing and then present the client with a select group of candidates for a final review,” Lockhart says. “These are professionals who understand client staffing requirements and can manage the other components of this process that clients can’t perform as quickly or efficiently.”

Smart Business spoke with Lockhart about the role staffing firms can play in recruiting, as well as other roles to help HR departments operate more effectively.

What risks can be minimized by working with a staffing company to make new hires?
Companies are often unaware of the policies and procedures that need to be followed when it comes to conducting background checks, drug tests, interviews and other screening processes that occur during the recruitment. When the rules are not followed, it can create legal problems for both the HR department and the business.

However, this is what staffing professionals do for a living. Not only are they recruiting on a continuous basis to identify qualified candidates, but they are also constantly aware of government requirements regarding how those rules are changing. This includes questions that cannot be asked during an interview and screening that either can or cannot be done. It is not the staffing company’s role to make sure a client is compliant.

Rather, the staffing company is a consultant that can point out areas where there might be an issue and help the client partner with an employment law specialist who can ensure compliance.

With regard to the actual recruiting, staffing companies can help HR departments identify characteristics for an ideal candidate and then find only qualified matches. If an HR manager goes out on their own to recruit for a position, he or she will likely post an ad and get a number of candidates who aren’t qualified for the open position.

This manager will waste a great deal of time reviewing candidates who aren’t a good fit for that company. The role of a staffing provider is to meet with the client, understand its needs and do all of the other functions in the background.

Why are some companies reluctant to outsource the recruiting process?
Many employers aren’t aware that they have issues. They are hiring people the same way that they have been for years without realizing their process has serious problems. For example, a lot of companies use other people in the organization to conduct interviews either out of necessity or a desire to have the candidate spend time with other people in the business.

This presents a risk, as mentioned earlier, that inappropriate questions may be asked during the interview.

Staffing companies handle the prescreening and qualification process, but they can also guide those individuals who are conducting the interviews and seek to avoid these trouble spots. Their presence also frees up time for the HR manager to potentially sit in on the interviews and make sure they are conducted correctly.

What about companies that are concerned about the cost of outsourcing these services?
In most cases, businesses find that outsourcing recruiting and other HR functions is a more cost-efficient option.

Staffing companies have access to all the major job boards and have experienced recruiters on staff. Hiring and firing is very expensive. The fact that these firms can identify a viable candidate and utilize them in a position to ensure fit before the person is hired on a full-time basis with benefits can be of significant value to companies.

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Staffing firms have the tools to minimize risk in the workplace

Quality staffing companies do more than just provide clients with qualified workers who can fill an acute operational need, says Tom Quail, Vice President of Risk Management and Corporate Counsel at Nesco Resource. They seek to build productive relationships that foster a safer work environment for everyone.

“A strong staffing agency will come in and say, ‘You’re working in a light industrial space that requires your employees to do a lot of moving, bending and twisting,’” Quail says. “‘We have 10 clients that are in a similar line of work. Here are some steps we can take to prevent injuries from occurring.’ Many clients of contingent staffing agencies don’t think to connect their services with mitigating risk, but it is all part of those firms’ expertise.”

Companies in the staffing industry have expertise identifying the skills required to perform a particular job and then finding the right individuals to do it. Thus, it only makes sense that as they fill these positions for clients, they find ways to apply their knowledge to minimize workplace risks for all employees.

Smart Business spoke with Quail about how the staffing industry can help clients address risk management and safety concerns.

How can a staffing agency’s risk management team provide value to clients?
The role of a service provider is not to be critical or negative about what the client has done in the past with regard to safety. Rather, it’s to evaluate the client’s current safety procedures, praise the positive steps that have been taken to address concerns and provide informed recommendations that promote safer working environments.

Risk management is a perfect value-add since it corresponds directly with the purpose of a staffing firm — to find personnel who can ably fill a specific role for the client. The research that is conducted along the way can be used to more accurately predict injuries and start to put pieces in place to be proactive as opposed to reactive when it comes to reducing the risk of injuries in the workplace.

Clients should not view personnel placement as the completion of the dialogue with the staffing firm. Instead, it’s the beginning of a new phase that can lead to a better understanding of safety in the workplace and what tools and processes can be implemented in order to minimize the risk of injury.

What’s a good example of the benefits of this risk management effort?
Everyone enjoys warm summer weather, but the heat can be dangerous when there is work to be done. Staffing firms should be aware of the work that their people are doing at all times of the year and working with clients to ensure that best practices are in place to ensure they are staying safe.

Marketing materials that speak to heat-related injuries or conditions and what can be done to prevent those from occurring benefits not just the seasonal help, but anyone who is working outdoors in the summer. It may be something as simple as handing out water or peanuts onsite or encouraging workers to drink less pop and more water.

These are situations for which staffing firms can be proactive in order to reduce the risk of health concerns.

What’s the key to making long-term behavioral changes?
Staffing firms can offer recommendations on practices that keep workers safer. But the long-term goal should be to teach clients to recognize these needs and give them the tools so that they can track injuries, monitor risks and be cognizant of what leads to a safer workplace.

They can learn how to track data, identify recurring problems and develop their own solutions. These practices also have an economic benefit in terms of reduced medical expenses and limited absences from work due to injury or illness.

Clients should learn from staffing firms about the costs of injuries, and with that information they can see how much money they are saving by using contingent labor. When you have a partner working on your behalf to manage these costs and develop tools to keep employees out of danger, the savings can be substantial.

If a staffing provider is only providing a client with labor, the client is missing out on the added benefits of becoming proactive with safety and learning to measure injury costs.

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Relationships are critical to companies that rely on staffing firms

Employers that have struggled to build a strong relationship with companies in the staffing industry should analyze the net promoter scores (NPS) of the firms they have used, says James Krouse, Director of Marketing and Communication at Nesco Resource.

NPS is a business metric that measures how likely someone is to recommend a company’s products or services to friends or colleagues. It’s a metric considered more accurate than traditional customer satisfaction ratings.

“Satisfaction is subjective,” Krouse says. “It can mean just meeting a minimum standard for example. NPS is really about putting your own credibility on the line based on your experience. This is critical in the staffing industry because service to both employers and job seekers is a key differentiator.”

In the staffing industry, the NPS is separated between the client side and the talent side. These scores are generally very low for the staffing industry overall, Krouse says.

“Staffing firms are having difficulty finding the right people for the right jobs because the unemployment rate is so low,” he says. “But it goes deeper than that. A lot of staffing agencies are not offering the consultation on attracting and retaining that their clients need now more than ever.”

Smart Business spoke with Krouse about why the NPS is a useful tool for companies that fill positions through the staffing industry.

Why is the NPS low for the staffing industry?
There was huge growth in the staffing industry that coincided with the dip in the economy in 2008. A lot of companies turned toward contingent labor in order to help them survive and/or continue to grow their business.

Now we’re at a point where expertise is needed to deliver the high level of service that must be present through this economic cycle of low unemployment. Some staffing agencies haven’t been able to reconfigure who they are in order to deliver a more consultative approach.

Often staffing firms will commit to finding talent quickly. These are individuals who are available at the lowest rates possible, but they may come up short on skills or reliability. That experience would not garner a very high NPS.

Many in the industry point toward a low unemployment rate. That certainly is a factor, but the core problem is about communication. Is the pay rate competitive in the market? Is the timeline too tight to fill the order? Which skills are essential and which are not? In the end, companies tend to value communication and a good working relationship.

How does the NPS rate on the talent side?
The industry average on the client side is very low, 4 percent, but talent scores industry wide are only 24 percent. That leaves a lot of room for growth. Again, communication is key. It’s not just about someone walking into a staffing firm and then getting put into the first job that is available.

If there is not communication about what the job is going to be like and whether it is a good fit with the individual, it’s not going to be good for that person or the client. The worker is not going to be engaged in what they are doing and performance will suffer. That’s why it’s important to look at both client and talent scores.

What can staffing firms and clients do to boost performance?
There needs to be an emphasis placed on people and relationships. There need to be conversations with prospective workers about what they want in a position and where they feel they would be a good fit.

Expectations also need to be made clear with the client so that the staffing firm can identify candidates that are qualified and engaged in the available opportunity.

The staffing firms that rate highest in the NPS maintain a continuous dialogue with clients and survey the talent at the beginning, middle and end of their assignments to get a comprehensive analysis of how it worked out. Looking at the NPS for both the client and talent sides gives you a complete picture of how effective a staffing firm will be. It’s an essential combination for a successful long-term partnership in staffing.

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Employers must make a compelling case to land IT talent

Supply and demand stands out as the biggest challenge that companies face in securing talent that is capable of working on their IT systems, says Grant A. Derner, executive vice president at Nesco Resource.

A recent report drafted by Nesco found that while there are 33,000 candidates in the IT workforce in the Cleveland area and more than 2,700 open jobs in the sector, there are only 18 candidates per job.

“The candidate supply in the region is stretched very thin,” the report states. “The number of candidates per job is historically low, leaving very little room for error in selecting a candidate.”

The majority of job candidates who are identified and placed in the IT sector are passive candidates, Derner says. They have steady work and need to be sold on a new opportunity in order to be willing to make a change. That puts the burden on the employer, or the recruiter working on the employer’s behalf, to create positions that are more attractive.

Smart Business spoke with Derner about IT staffing trends, the labor pool and the strategies used to attract talent in the current market.

What challenges do companies face in recruiting IT talent?
The majority of candidates in the IT sector don’t want the work to be narrowed down to a limited skill set. These people are attracted to companies where they can come in and use a broad range of skills to provide a high level of service to the employer while also growing their own personal skill set and resume.

This creates a disconnect with companies that have a very specific need and are only interested in candidates who will fill that need. Openings could include an app developer, a .Net developer or another position that is very narrowly focused. This type of opening will likely require a competitive pay and benefits package in order to entice the individual to take it.

The market is such that those in the workforce can afford to wait for the right opportunity. Someone who has a good job with benefits and other perks, as well as the flexibility to do different types of work, is not likely to jump at the opportunity to take a job that is more narrowly focused.

What’s the key to making a strong presentation with the job description?
Recruiters need to understand clients and how they operate. These are professionals whose job is to find people who can do a particular job. They want to know the main skill set that the client’s hiring manager is looking for.

Initially, that hiring manager may list many different skill sets that he or she considers to be important. That’s not going to get the job done. The recruiter will want to sit down with the client and break down the job description to its essential elements in an effort to make the opening more attractive to potential candidates.

In addition, companies should talk about their growth, their place in the industry and what makes their organization an appealing place to work. The more details they can provide and use as incentives to join that company, the better the odds of landing a strong candidate.

This is a necessary part of the process in a market that has become so competitive. It’s also an indicator that while salary is very important, it’s not always a differentiator in the decision-making cycle.

How has the talent pool for IT workers changed?
In terms of graduate supply versus overall education level, data shows an opportunity for employers in the growing number of candidates with associate degrees. While overall education numbers leaned toward a bachelor’s degree, the current graduate supply leaned (sometimes heavily) in the direction of an associate degree.

Economics and education trends have promoted associate degrees as a viable path to employment for many people. The technology skills obtained through these programs often surpass similar bachelor’s programs that may have less emphasis on technical skills.

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Staffing firms help focus your search for job candidates

Companies partnering with staffing agencies to hire highly skilled laborers who can work on a temporary basis are finding it increasingly difficult to fill open positions. Focusing the requirements for candidates while maintaining a perspective on the candidate pool is necessary for companies to succeed in this job environment, says Nick Bailey, Area Manager at Nesco Resource.

“The labor market has changed over the past 15 years and many HR managers are still adjusting to this new reality,” Bailey says. “The most talented skilled maintenance technicians are currently working great jobs with good pay and benefits. They aren’t likely to be interested in leaving that stability for a position that might not even last three months.”

Unicorn hunting is a phrase used to describe companies that are in search of the “perfect” candidate who checks off every box on their list. That may actually exclude the best available candidates in the pool, Bailey says.

“It’s the psychology of choice,” he says. “We assume there is an unlimited number of candidates and the perfect candidate can’t possibly be the one you’re sitting in front of right now. Unfortunately, it’s paralysis by analysis. The more options you have, the less likely you are to make a decision at all.”

Smart Business spoke with Bailey about how to manage, not lower your expectations, and get on the path to filling your company’s personnel needs.

What is the difference between tough positions and those job openings that are impossible to fill?

Staffing professionals like a good challenge and want to find the perfect candidate for customers. But they also know the candidate landscape. If you’ve had a position open for six months, or have interviewed a dozen candidates with no luck, it may be time to rethink what it takes to get the position filled.

The staffing professional you’re working with is likely to know the reasons why. It could be offering a pay rate that does not match up with the required experience for the position. Some companies also declare that the position is only available on a temp-to-hire basis. There are some parameters that will simply exclude all or the vast majority of candidates available.

How can you avoid unicorn hunting without lowering expectations?

It’s not about lowering expectations, but rather working with your staffing provider to understand the candidate pool and manage expectations. For example, if you think of the job description as a wish list, which points on that list are mandatory?

If you clarify the essential skills that the candidate needs to do the job and indicate flexibility for others that would be nice to have, but aren’t imperative, you put yourself in a better position to fill your open slot.

Perhaps even more importantly, you need to give a candidate a reason to want to come and work for you. What are the advantages of the opportunity you’re presenting? How could this job help the candidate boost his or her own resume? What are you willing to offer candidates that they might not get with other companies? If you have a strong 401(k) or profit sharing plan or a competitive salary, that’s going to make your opening more attractive.

How do companies get into unicorn hunting in the first place?

Many companies just don’t have deep expertise on the process of matching a skilled laborer with a position of need. Staffing firms have years of experience filling positions and they have their finger on the pulse of the labor market. They know who is out there, what they’re looking for and who might be a good fit for your business. Employers who tap into that expertise and are willing to look at the market from the employee’s point of view can make headway on filling personnel needs.

The other key point is to not be afraid to hire someone who appears to be a solid candidate. If you have an individual who has a good resume, a good interview, a strong reference letter and seems to fit your needs, go ahead and make the hire. Avoid the temptation to wait for a ‘perfect’ candidate who you likely will never find.

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Staffing industry more equipped than ever to fill labor needs

Technology enables the staffing industry to fill client needs with pinpoint accuracy, says Heath Luikart, Vice President of Operations at Nesco Resource. As demand continues to grow for temporary skilled labor, these tools that make it easier to match the client with the right worker will become even more critical.

“Contracting companies are not passively waiting for applicants to walk through the door in hopes of stumbling upon a candidate that may fit a client of theirs,” Luikart says. “Systems are in place to actively seek that candidate. It allows these firms to be proactive in their approach and build a database around client needs. And it allows clients to be part of the process.”

Just as you can track the shipment of a product from a manufacturer, companies can check in on how the search is going to identify the right person to fill their specific needs.

“They have access into the system to see where job candidates are in the process,” Luikart says. “It really keeps them in the loop and helps them feel like they are part of the process rather than standing on the outside and being left to wonder what’s happening.”

Smart Business spoke with Luikart about how technology is making life easier for both contracting companies and the people who utilize their services.

How is technology supporting the staffing industry?

There are multiple types of technology used today, including vendor management systems, customer relationship management systems and applicant tracking systems. These tools enable contracting companies to manage client information, distribute jobs, track hours and consolidate and track invoices. Most importantly, they store and organize valuable data, including applicant resumes, that streamlines the process to connect a client with the right person for a particular job.

The reporting capabilities, the analytics, the automation of reaching out to customers and having touchpoints is all done through these systems. It creates something akin to an artificial intelligence that is constantly working in the background to bring candidates into the database that can solve client needs.

How does this system function?

Technology enables job candidates to get real-time alerts and notifications across multiple forums to let them know about opportunities in their market. If they are interested in an opportunity, they can receive paperwork electronically and then complete, sign and email it back or upload it to the system directly. They can also access their portal at any given time to review these documents. Once they are on the job, assessments can be completed online and they can enter hours via computer, tablet or mobile device. They can also receive surveys that allow them to provide feedback about their work experience. Technology provides workers with a stronger voice to communicate at any time, or least in set increments.

What value do these tools provide?

Turnaround time is one of the biggest pain points for customers in the staffing industry. When the need for help arises, the customer expects a quality solution to be found quickly. Technology helps make this happen, creating a more streamlined approach to get the most qualified candidate in the fastest time. Systems are developed to follow a particular business and its needs and continually build a database based off of that information. Data for a specific client can be pulled within a minute’s notice. Reporting is a big piece, whether it be turnover, attrition rates, supply and demand, total spend by departments or certain fluxes that have been identified. The goal is to provide answers at every level and leave little, if anything, to chance.

How will technology continue to evolve?

Like all technology, not all features are used or needed. The important thing is to have options. Social media will continue to drive processes and create new ones. Big data will continue to impact the market and the technology used in the staffing industry. It provides a lot of analytics from multiple locations in open-sourced format, to drill down and pull that information back for both candidates and clients, which will continue to shape how the staffing industry does business.

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Contractors see vast opportunity working in the IT infrastructure space

As technology continues to evolve, there is a growing need for qualified individuals who can help businesses build and manage their IT infrastructure, says Grant A. Derner, Executive Vice President at Nesco Resource. The challenge is matching the right people with the right skills with a growing need across the country.

“We tend to think of the IT industry focusing on the coasts and within cities,” Derner says. “But when you drive down any highway, look to your left or to your right and you see a building. That building has IT needs inside of it, infrastructure that needs to be installed, maintained, changed and/or upgraded. As more and more companies continue to invest in new technologies, the demand is only going to go up. Getting qualified workers into the space is a priority, but with the current shortage, there is also a challenge.”

To meet this challenge, companies are increasingly turning to the contract recruiting industry for help.

“Contracting companies that focus on that particular niche can identify individuals with the needed skill set,” Derner says. “This eliminates the challenge of recruiting for the business and enables these companies to maintain flexibility in their hiring which can provide a cost savings and also free up budgets to focus on other areas of potential growth.”

Smart Business spoke with Derner about the usage of contingent staffing for IT infrastructure work.

What is IT infrastructure?

When most people think of IT, they think of people programming software. But there is a whole wired infrastructure in every business that continuously needs to be monitored. This includes the company’s entire collection of hardware, software, networks and data centers. When you go beyond that, the equipment that is used to develop, test, operate and manage all of that is a wide, very broad spectrum. Everything that you look at and touch has some piece of infrastructure related to it.

How difficult is it for someone outside the company to step in and do this work?

This type of work is very task-specific and well defined — here is the project, here are the number of installs or moves you need to complete. The job for the contracting company is to go out and find somebody who specifically understands that task or has done it in the past. When it’s done right, the contractor can hit the ground running on day two. Day one is more like orientation to go over the outlay of the project and any special instructions for that location. Day two, it’s time to get to work. It’s actually easier work than would face a full-time IT person who has to wear multiple hats in the organization.

What is the key to success for working with a contractor recruiter?

If you work with a contracting company that is trying to be all things to all people, it’s going to be more difficult for that company to provide someone with the specific expertise you are looking for. You want to find a company that has the processes and talent to understand the intrinsic differences related to the contract and the skill to make a match with the right contractor.

How do people working in this space keep up with the latest technological advances?

Contractors that work in this space tend to look at what’s hot and then go out and obtain certificates or additional training that gives them skills they can put to use right away. If you’re an IT contractor, you can demonstrate, ‘I received this training and now I’m doing that work.’ There are a lot of growth opportunities as infrastructure needs continue to change.

In a lot of cases, the growth of knowledge stems from a desire to learn. If you’re in this field, you’re likely very interested in managing databases or ensuring that a configuration is set up properly or upgrading a server. You are always working to stay ahead of the curve. As a contractor who works in the contingent staffing industry, you don’t have to go out on your own in search of new opportunities. You can work with the staffing provider to find opportunities where your expertise is needed and focus on doing that work rather than trying to simultaneously manage your own business.

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