There is no doubt in any recruiter’s mind that the past couple of years have been challenging. But in spite of the economy, why have some recruiters experienced a lot of success? We have some insight that may help you to improve your future level of success.
During a panel discussion at the recent FoxHire Network Fall Conference, we had the opportunity to hear what three accomplished recruiters and the moderator had to say. These recruiters have earned over $3 million by utilizing the tools and services of FoxHire. They openly shared the practices, philosophies, and resources they used for maximum effect and profit.
The interesting part about the four individuals is the fact that they work almost all technical and professional disciplines and they do both direct hire and contract staffing. The knowledge they conveyed at the Fall Conference was based upon their experience with contracting in the past, their success using it in the present, and their optimism for what it holds in the future. Contracting is attractive to both client companies and candidates. Despite the challenges that exist in today’s economy, the appeal to both parties translates into steady cash flow for recruiters. Below is a short bio of each panelist and their moderator.
The first panelist was Pat McCombs of KB Search Team, LLC. Pat has been recruiting since 1982, and her primary focus has been direct hire in the Manufacturing, Engineering, and Financial Services industries.
The second panelist was Joe Murawski, CPC of Focused Hire. Joe has been recruiting since 1996, and his primary focus has been direct hire in the Information Technology, Electronic, Defense, and Aerospace arena.
The third panelist was Keith Adams of PediaStaff, Inc. Keith has been recruiting since 1995, and his primary focus has been contract staffing in the Pediatric Therapy (Physical, Occupational, and Speech Therapists) discipline.
The moderator for the panel was Joe Noto of Regency Search Group (whose picture is in our “Recruiters Roundtable” section). Joe began recruiting in 1987 and grew his business to three offices, 50 full-time employees, and 250 contractors prior to selling and retiring in 1998. In 2002, Noto re-entered the staffing industry on a semi-retired basis with his focus on Business Services, Finance, Accounting, and Manufacturing.
Client matters
When it comes to client companies, you can’t go wrong by offering contract staffing services. With contracting, you’re offering both flexibility and convenience to companies—two luxuries that are always in short supply. As a result, you position yourself in an optimum fashion as a sole-source provider and build a greater amount of loyalty with your clients. They know they can rely upon you no matter what they need.
This was definitely the strategy that fueled Noto’s success as a recruiter and business owner who offered both direct-hire and contract staffing services. Noto described his approach as “solutions-driven,” one in which he asked the appropriate questions in order to help his clients decide which staffing alternative worked best for them at any given point in time, or for any staffing challenge.
“Basically, we positioned ourselves as a recruiting firm that could provide excellent candidates in Finance and IT in whatever manner worked best for the companies,” said Noto. “We would ask hiring officials, ‘How can we solve the problem that you have right now? Is it hiring somebody on a full-time basis, or is it hiring a contractor for a specific period of time or a specific project?’”
By taking this approach, even if the company doesn’t have a need that you can meet at that exact moment, the hiring officials will remember the options you presented to them and will be more apt to contact you in the future if a need does arise. (And really, it’s just a matter of time before such a need arises.)
“A lot of clients don’t like the hard sell,” said Noto. “We weren’t trying to sell a person to them. Instead, we helped them devise a solution. We had no problem telling them that they needed to take a look at their situation and think about possible solutions. We even told them that we might not be the best solution right now, but that over time, we could definitely help them with staffing issues or project challenges that they might have.”
According to McCombs, “Today’s clients are in cost-cutting mode, but by offering a contractor you can still help them complete projects and meet their deadlines. If your clients are like many across the United States, they’re also dealing with hiring freezes and budget constraints, but they can still hire contractors to get the job done.”
In terms of building client loyalty, Adams emphasized that offering contract staffing has served to strengthen the relationships that he has with his clients.
“Since we work with a lot with school systems, we strive to build relationships so they come back year after year with their staffing needs,” said Adams. “We really try to connect with our clients and find out what they need, and that’s helped us to turn initial ‘no’s’ into placements. We also present our firm as a resource for any staffing-related issue.”
For Murawski, an additional advantage lies in the fact that he uses a back-office service provider (FoxHire) to handle all of the paperwork and financial details. As a result, he can offer contract staffing or direct-hire candidates to prospective clients whenever he discusses the possibility of hiring. This immediately makes him more competitive with other firms or franchises that might be vying for a prospect’s business.
“My back-office places contractors throughout the United States; consequently, it allows us to play on an even field with the major franchises,” said Murawski. “We aren’t left out in the cold because the bigger firms can provide things that we can’t as an independent. In fact, they (the companies) don’t even know that we’re an independent. I have the same type of capabilities as the bigger firms because of my relationship with FoxHire.”
Candidate appeal
Candidates also find contracting attractive. With the national unemployment rate hovering right around 10%, candidates are no longer in the position to “hold out” for a direct-hire position. Due to the severity of this most recent recession, a lot of high-quality workers find themselves without a job. The other point you need to remember is that there is a relatively large pool of candidates who actually prefer to work on contract assignments and have been doing so for years.
“A lot of quality candidates are currently unemployed or displaced,” said Noto. “They’re looking for the opportunity to create a stream of income while they continue to look for full-time work. And if they do a good job while they’re on contract, the client might say, ‘Hey, I don’t want to lose this person. Let’s bring them on full time.’”
There’s another factor involved that’s tied to the economy. Since the housing market has been down, many direct-hire candidates are willing to take a contract assignment. In some cases, they prefer to take such an assignment first. That’s because they want to make sure the company is the right fit for them before they start the process of attempting to sell their house and relocate their family.
The contracting appeal for candidates goes far beyond a high unemployment rate and a sputtering housing market. It also involves the fact that there has been a “generational shift” happening in the country. Today’s generation no longer expects to work at the same company for 40 years and then retire with a gold watch. They’re more interested in new experiences, the opportunity to enhance their skill set for the purpose of making themselves more marketable, and earning more money.
“The contractors really like the money,” said Adams. “We pay them for every hour they work as a contractor, and they make more money than they would as a direct hire in a school system. And if they work directly for us, there’s no cafeteria duty or bus duty [that school employees have to deal with]. It also reduces their amount of meeting time, because schools don’t want them to go to meetings. It just reduces their workload overall and focuses all of their time on therapy.”
“I haven’t seen any candidates who weren’t being receptive to [contracting] in the area I’m working in,” said Murawski. “Everybody’s doing it. There’s a high demand for people to function in a contract assignment, and a lot of candidates are willing to fill that need.”
Something else that helps to make contracting vastly more attractive in this day and age is the fact that contractors have access to health insurance through most back-offices. (FoxHire, for instance, offers its workers coverage through Anthem Blue Cross & Blue Shield.) Healthcare is front and center on the political stage, and is more important than ever for workers.
Marketing for the future
All of the panelists indicated that they’ve experienced an increase in activity during the past couple of months, and contractors continue to play a prominent role in many companies’ plans for growth in the new economy.
“It’s kind of hard to predict, but I think things are beginning to come back,” said Noto. “What some companies are seeing is that their business is starting to stabilize, but it’s stabilizing at a lower level [following a recession] than what they’re used to. That’s why, when they need to hire somebody, they might choose to hire on a contract basis first.”
“We’re seeing more job orders than we did over the summer,” said McCombs. “I think we’re going to see more business. There’s a lot of great talent out there, which is a really good sales tool for us.”
“I’m really encouraged,” added Murawski. “If anybody can hang on and continue to maintain their focus throughout the end of the year, they could end up doing quite well. There’s been a dramatic increase in activity lately.”
What about YOU?
We’re at the very beginning of an economic recovery that involves a need for companies to hire, and for many companies, that need starts with hiring on a contract basis. By positioning yourself as a “solutions provider,” you could take full advantage of the recovery and service your clients through direct-hire and contract placements.
We encourage you to review the Q&A Section below to learn “How much time and money is required for you to ramp-up to do contracting?”
You can also call us at (330) 454-3508 or send an email to info@FoxHire.com with any questions.
