SI Review: October 2013

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Perspective: Revolution and Evolution

Revolution and Evolution

The industry stands at an energizing crossroad

By Jim Lanzalotto

The staffing industry is in the midst of a 25-year business cycle that began with the adoption of Internet tools that have transformed the industry and will end with dramatic, yet subtle changes in the ways staffing firms interact with customers — hiring managers, gatekeepers, supply chains, current consultants and candidates.

In 2000, a driving focus of the staffing world was on harvesting the fundamental potential proffered by Web 1.0. Granted, the industry had been an early adopter of cost-cutting and highly disruptive job boards from companies such as Monster and Dice in the 1990s, but emerging online tools created compelling opportunities to drive greater customer value in both front- and back-office operations. Over time, labor-intensive operations such as time collection, skills assessments and background checks became routine Web services. And applicant tracking/customer relationship tools soon became Web-enabled as well, eliminating the need for costly servers and weak client/server architectures and driving more dynamic customer interactions.

The same holds true with managed services providers (MSPs). At first, many MSPs thought vendor management system (VMS) providers were the Evil Empire, and some even attempted to build products (most of which failed, with a few notable exceptions) to compete with them. Very quickly, however, market leaders learned that a VMS partner was a beneficial resource and could help them drive value to customers and take out significant back-office costs.

Then came mobility and faster and cheaper broadband. Savvy firms have realized that large offices and the longstanding butts-in-the-seat mentality aren’t needed to grow companies. Virtual offices of sales and recruiting teams have effectively enabled firms to attract new staffers from different locations, expand geographies and create new customers successfully.

In the next 15 years, I don’t expect to see changes as extraordinary as the past 13 years. While the collision of modern technologies and consumer preference will continue, the changes will be more subtle — but highly significant — for the firms that adapt quickly:

  1. VMS technologies will be more mobile and more expansive. And the definition of workforce will continue to morph from contract employees to project and service providers. Overall spend-under-management is going to explode over time.
  2. Marketing will be more personal and less intrusive. And will be based on opt-in requests from talent and business decision-makers.
  3. Forget about candidates. They’ll cease to exist in the retail staffing world. Recruiters will simply source for the best solutions — from individual contributors to service firms.
  4. Data will get bigger. And more valuable. But less wonky. Because it won’t be enough to have a massive business warehouse full of information. Successful companies will mine their customer data to reach customers on an emotional level.
  5. Email will go the way of snail mail and be replaced by a convergence of social messaging. If you don’t believe me, watch a group of teenagers — they don’t talk. Or email. They text and post. Even if they’re sitting next to each other.
  6. Customer experience will matter more than products or services. The arms race of features and products are creating an even more undifferentiated offering in the industry. So compellingly unique and sustainable customer experiences will be the only way to win.
  7. Personal brands will trump B2B brands. Personal brands are driving growth in the media, and the value of a group of high-impact recruiters and sales folks will be far greater than the sum of future staffing firms.

Industry advisor Jim Lanzalotto can be reached at jim@scanlonlewis.com

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