A keynote speaker made an observation that shocked me last week at SIA’s Healthcare Staffing Summit — a conference for staffing firms serving the healthcare industry. The statement: Staffing organizations are taking advantage of buyer organizations’ pandemic-related business weaknesses and consequently are positioning the use of staffing firms as a necessary evil. I began to look into his concern and here’s what I found.
The pandemic has affected the world of work with both staffing firms and contingent workforce programs’ structures being called into question. Change is inevitable and the only issue is, how will this play out? Let’s start by taking a look at the staffing firm’s mission and then examine the impact of that on the buyer.
Staffing in Covid
First, what’s staffing firms’ core value proposition, market mission and purpose? For several decades, staffing organizations have supplemented buyer organizations’ talent needs that stemmed from short assignment requirements, unique talent requirements and/or their inability to operationalize the sourcing of these short-term/unique talent requirements. In other words, the core mission of these talent-sourcing business models has been to solve talent/workforce gap problems in a short period of time based on a specified need the buyer organization has sought to fill.
Through the Covid-19 pandemic, some staffing organizations have been accused of artificially inflating prices during a critical moment in time and potentially taking advantage of the crisis to increase and improve their profits, specifically in the healthcare talent markets. Although this may be occurring in some way at some firms, most professionals in the staffing industry believe it is supply and demand at play, that the shortage of healthcare workers has been the driving element of increased pay and bill rates. That, however, does not deter market skeptics.
The question is, what can buyer organizations do to help control cost with an ongoing talent-sourcing reliance on staffing organizations to deliver high-quality talent to their stakeholders in an efficient and cost-effective manner? One option: With the advent of some advanced technologies and the associated emerging talent sourcing platforms, buyer organizations can execute and/or consider building talent pools of their highest-demand skill sets. Meanwhile, the automation of processes and strategically centered policies might help reduce their reliance on staffing organizations that act like suppliers and not as long-term partners.
Implementing CW Requirements
However, there are basic CW program management, fundamental requirements buyer organizations must consider and implement.
- Be aware of their brand leverage and their brand’s ability to attract talent.
- Be willing to break down silos/barriers of the various talent sourcing channels and be able to navigate these quickly emerging talent-sourcing channel alternative easily.
- Invest in technology/platforms to help curate (passive recruiting), manage and build talent pools.
- Have a long-term vision and strategy specific to all talent engagement types that are utilized in their organization today and tomorrow.
- Secure the support and confidence of the organization’s executive team to effectively execute these strategies and investments.
The Buyer Reality
The future of contingent staffing and the current business model will be challenged, not because of bad behavior in a time of crisis, but because of the advancements in talent management and sourcing technology. But more importantly, buyer organizations are starting to realize the opportunity to attract, curate, verify and onboard talent based on their brand recognition leverage.
For decades, buyer organizations and their legal departments believed that it was critical to separate staff employees from nonemployees in every way possible. We have evidence that many buyer organizations are now tearing down these policy walls and these preconceived, process-barrier notions.
So, where does this leave staffing firms? How can they adapt and continue to provide value to buyer organizations? Staffing organizations need to understand their uniqueness and identify potential weaknesses that still exist in the marketplace. Some of these organizations may not be in business in five years but those that find a way to fit into the delivery models that are just now emerging will find continued success, whether by focusing on their curation of connecting with the talent, or finding a unique way to solve a problem that businesses are experiencing because of this rapid change.
Incidentally, the core market transformation that is being accelerated by the pandemic is connecting talent directly with engagement/hiring managers and potentially leaving little room for staffing firms as well as internal CW programs. A restructuring of the value of centralization in a buyer organization seems to be at hand as well.
Is It the Market?
So as we reflect on whether supplier organizations are taking advantage of buyers’ inefficient, siloed policies and process barriers, it is clear change is coming. But the reported market correction driven by staffing organizations’ market behaviors may not be as important or impactful as staffing process disintermediation, technology innovations!
The ultimate goal is to get work done. Buyer organizations will do whatever it takes to complete projects and tasks as they deliver goods, services or products to their clients. Supplier organizations and buyer organizations will continue to explore, modify and change their contingent talent sourcing/management strategies, offerings and service processes. Only time will tell to what extent and how quickly those may evolve.