What do staffing firms hate the most? No, it's not VMS.

In 2008, 2009 and 2010, we surveyed staffing firms with regard to their attitude toward a wide variety of factors--legal and regulatory topics, staffing specific issues (such as VMS and RPO); and exogenous variables (such as the economy).  We asked: "For each of the following factors, do you think they are a net positive, net negative or neutral with regard to your company today?"

This year's prize for perceived worst drag on business was...state unemployment tax.  That would be my pick too, not only because those tax rates went up but because information on the higher rates was not well communicated in advance by the individual states.  That put staffing firms in the awkward position of having to go back to buyers, to attempt to renegotiate already agreed-upon bill rates in order to pass on the additional cost.  Rumor has it that only a portion of that cost was successfully passed on and that staffing firms took the hit for the rest.

Scoring nearly as a negatively was the economy, partly I suppose because it's still shaky but probably also because people haven't yet forgiven it for dragging down the industry in 2009.  Also strongly in the negative column were, as expected: government regulation, workers comp costs, procurement and VMS.

But staffing firms aren't all negative.  They have a continuing love affair with the internet.  Seventy-one percent said it helped their business; 23% were neutral; and only 6% thought the internet hurt their business.  So much for the "inevitable" war between staffing firms and job boards, I mean, career sites.

My wild guess is that in 2011, not much of this will have changed.  If unemployment lingers, as most expect it will, high unemployment taxes will linger as well.  But at least this time around, staffing firms know the deal.  And barring any black swan events, the economy should at least be sitting up in bed by then; it may even have checked out of the hospital. 

Of course, if the world is lucky and things right themselves faster than expected, maybe unemployment taxes and the economy will no longer be significant threats.  Then staffing firms can get back to concentrating on what they really hate: workers comp costs, procurement and VMS.


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