The New Staffing Firm/Contingent Worker “CRM” -- CWRM, A Kind of Lifecycle “Talent Management” of Contingent Workers

I recently conducted some analysis on a data set of some 4,000+ temporary workers who responded to questions about their relationship with their current staffing firm (see 2012 Temporary Worker Survey). These questions ranged quite broadly, though not exhaustively, across the “staffing firm/contingent worker relationship life cycle” (e.g., “How did you first learn about your staffing firm?” or “What are staffing firms doing right? What could they do better?”).

It occurred to me that this “relationship” and “lifecycle” is something very unique to staffing firms and critical to their performance and success. Over the past 10 years, much has been discussed about “talent management” as a discipline and set of processes and technologies that applies within organizations that hire “permanent employees,” while somehow it seems “talent management” has been considered something apparently irrelevant to the service providers (staffing firms) that manage contingent/temp workers on behalf of the users of those workers’ services. It seems, perhaps, that the fact that the workers involved are “contingent/temporary” somehow suggests that something like “talent management” is inapplicable and unimportant in staffing firms managing contingents/temps.

But after spending the past 6 months, researching talent acquisition (generally and also specifically in the staffing industry) and more recently the relationship between temps and their staffing firms, I am coming to the completely opposite conclusion: in my opinion, some unique form of “talent management” may be crucial — indeed critical — to the performance and evolution of staffing firms (that is critical to their short-term and long-term business survival and success).  

How can this be, and what does it imply?

In some ways, staffing firms can be looked at as a unique hybrid of “service firms” and “product distribution firms.”  As “product distribution firms,” staffing firms source and supply “a product” (contingent workers), making a profit by adding a mark-up.  As “service firms,” staffing firms provide labor services (contingent work performed), bundled with some other enhanced services (payrolling, risk mitigation, et al).  However, there is a flaw in this concept:  while staffing firms may seem like and sometimes try to act like “product distribution firms,” they are not.  Workers are humans and not inert, unconscious entities (they are not material “products” of a value-adding, industrial manufacturing process). No matter however robotically we may ask them to perform, workers have subjective human properties, such as economic optimization, sense and purpose making, moral valuations, rich-spectrum feelings/emotions (including attachment, bonding, loyalty, etc.), agency/planning/decision-making, etc.. 

Therefore, I would argue that staffing firms are only (and should think of themselves only) as “service firms” (and more precisely, service intermediaries) whose function is to provide “the service” of “arranging and managing contingent work episodes and outcomes,” serving both their “buyer” clients and the human workers who eventually apply their skills/talent to deliver work outcomes. 

Being a “service firm” implies very different business models compared to being a “product distribution firm,” which like “product manufacturing” all too often leads to “commoditization dead-ends” (a main reason why distributors [like FedEx, logistics,  et al] and manufacturers [like Apple, in IT products, et al] have been increasingly pursuing so-called “servitization” strategies/business models  or “outcomes delivery”).  Being a “service firm” can mean a limited business model of “passing groceries” and managing “vaporous” margins, but these are service firms in commoditized service segments.  Being a “service firm” has always been essentially defined by the “persistent, direct value-adding/human-competency-based relationship between the firm and client;” and now being a “service firm” at the start of the high-IT, “social” 21st century, can mean the opportunity to exploit a wide range of business models based on managing relationships (at many different levels and across various groups) to unlock new value for the various transacting parties.  Given the state of technology and work economics today, this is certainly the case today for firms that are fundamentally focused on the intermediation of “contingent work arrangements.”

So, now back to CRM, Talent Management, etc.

For “service firms” that are fundamentally focused on the intermediation of “contingent work arrangements” (firms that would include traditional staffing firms), the management of the life cycle relationship with contingent/temp workers may necessarily be a core, mission-critical process that determines the firm’s business performance and the satisfaction and perceived value-add of the “service firm.”  Being able to optimize such a process, in the unique context of contingent/temp staffing, may very positively differentiate the performance of a staffing firm.  For example, optimizing a process and set of current technologies that (1) identifies, segments, and engages good workers, (2) deploys and engages them during deployment, (3) supports the workers’ human goals and needs, and (4) retains and deploys the worker through multiple work engagements should drive improved staffing firm business performance (including longer-term, life-cycle profitability). 

Exploring and perfecting business models that correctly develop and maintain optimized, life-cycle “contingent worker relationship management processes” seems to be something that should be fundamental to service firms that are fundamentally focused on the intermediation of “contingent work arrangements.”  It has struck me, therefore, as quite puzzling that some kind of concept and discipline of “something like a kind of talent management” (that is now firmly rooted among “permanent employer/buyers”) has not (for all appearances, at least) emerged as being front-and-center mission-critical and strategically prominent within the staffing industry.

Why has this transpired? At this point, I don’t know if we have any definite answers.

In the staffing world, the acronym CRM has wormed its way into the industry discourse to mean either Customer Relationship Management (a process integrating sales, marketing, and service to clients) or Candidate Relationship Management (a part of the talent/acquisition process involving managing an ongoing relationship with a “candidate”).  However, Customer Relationship Management is specific to managing a firm’s “value-proposition-based relationships” with business “clients,” that is “workforce buyers” only.  And Candidate Relationship Management is merely a term borrowed from the broader corporate recruiting world -- applying to the very front-end process of “securing a candidate” and not fully encompassing the very extensive and deep “life-cycle process” of managing a contingent worker (relationship), often across multiple “contingent work arrangements.”

If there turns out to be agreement that staffing firms should be fundamentally focused on the development and optimization of a discipline and set of processes for managing a firm’s life-cycle relationships with contingent/temp workers across a range of unique dimensions (engagement, training, etc.), then I would suggest that we eschew the use of terms CRM and Talent Management (which have their meanings in other uses/applications), and that we adopt the term CWRM (Contingent Worker Relationship Management) to apply to the unique processes (and discipline for optimizing them) specific to the management and value-maximization of human talent in “contingent work relationship.”

That said, what we call it ultimately is not the important thing. The important thing is: one, determining if what we have described here (and called CWRM) is a critical — though perhaps under-studied and under-exploited – set of processes that staffing firms need to objectively understand more about and leverage further to their advantage; and two — if the preceding is true — what kind of research and findings about this obscure area of CWRM need to be brought to light and made operational for staffing firms.

Seriously, what do you think?

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