SI Review: November 2012

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My Friend, the MSP

A staffing firm uses the managed services model to increase profits

By Leslie Stevens-Huffman

Ashish Kaushal has been challenging the status quo in the staffing industry since he founded Creative Solutions Services LLC (CSS) in 1996. His staff speaks 15 different languages, they enjoy hunting for “purple squirrels,” and they use concepts instead of keywords to search for résumés on the Internet.

Selling around program managers or calling a line manager without the program manager’s consent is forbidden at CSS. Instead, Kaushal insists that his staff place contingents by winning vendor-neutral scrums. Blasphemous, you say? Consider this: Revenue from companies that utilize a VMS or MSP has climbed to 70 percent of firm-wide sales since Kaushal decided to venture into the managed services arena in 2008.

“The conventional wisdom among industry executives is that it’s unprofitable or too difficult to service MSP or vendor-neutral accounts,” says Kaushal, CSS’ president. “But we’ve been successful in the high volume, low-margin staffing business because we don’t recruit like everyone else.”

So why would a serial entrepreneur and investor with a computer science degree launch an IT staffing firm? Kaushal saw a need for better recruiting processes and training during the dot-com era, when he couldn’t find qualified IT contractors for his Internet startup firm. Instead of continuing to provide free coaching and training to agency recruiters, he seized the opportunity to capitalize on clients’ unmet needs.

Multilingual & Driven

To use industry lingo, the managed services space is a horse race. So, Kaushal looks for bangtails with a strong sense of urgency because his goal is to submit a candidate within 24 hours of receiving a requisition. His strategy is to foster goodwill with the MSP’s program managers by filling difficult technical orders that are abandoned by the competition, so he also values perseverance and creativity.

Instead of asking a few interview questions to assess a recruiter’s behaviors and problem-solving skills, Kaushal created a three-hour written exam to separate the wheat from the chaff.

“It’s easy to skip questions during an interview because the discussion can go off on a tangent,” explains Elma Krtolica, head of talent acquisition. “A written assessment ensures that every prospect is asked the same questions. Plus, it takes stamina to complete the test, so it automatically eliminates people who won’t go the extra mile to find a candidate.”

But it’s the firm’s diverse staff and multilingual expertise that may be its greatest asset, because it gives recruiters a distinct advantage in sourcing technology professionals who increasingly come from outside the U.S.

According to the IT Workforce Project, the share of foreign-born persons in the IT workforce has doubled over the past decade and the use of L-1 visas for foreign-born employees by multinational companies has tripled.

Plus, the idea of tapping a diverse pool of contingents often resonates with large global companies that value inclusion and cultural diversity. In fact, it was the firm’s multicultural staff that convinced Pitney Bowes to add CSS to its vendor list.

Building a Pipeline

High-volume staffing necessitates efficient, high-volume recruiting and firms need superior productivity to turn a profit on low-margin orders. Fortunately, Kaushal who specialized in supply chain management while working at Accenture, has used his expertise effectively at CSS.

For starters, recruiters are assigned to specific accounts, so they can become familiar with the company’s technical infrastructure and work environment, and make precise, speedy matches.

Krtolica also considers a recruiter’s technical specialty and project experience when assigning job orders because it’s easy for the matchmaker to identify a suitable contractor when they’re comfortable with the scope of work.

Unlike some competitors, the CSS team doesn’t wait until they receive a requisition to start the recruiting process. They forecast future needs by identifying patterns in a client’s order history and gleaning information from quarterly meetings with the program manager, before building a pipeline of qualified contingents.

Pipelining isn’t an afterthought at CSS — it’s a religion. It isn’t unusual for a recruiter to screen 20 to 30 candidates to find a single contractor, Krtolica notes, just so they’re able to pounce on an open requisition.

Instead of relying on Internet job postings or social media to find prospects, CSS hosts meet-ups and user groups, giving staff members a chance to rub elbows with referral sources and passive IT contractors. In addition, staff members network with professionals at technology conferences and stay up-to-date on technology trends by joining organizations like Women in Technology and Latinos in Information Sciences and Technology Association.

CSS also finds diamonds in the rough who are overlooked by most IT staffing firms by actively recruiting returning military veterans.

When CSS recruiters do venture onto the Internet, they use a narrow Boolean search focused on roles and responsibilities instead of searching on job titles and keywords that return thousands of résumés.

And because firms can only submit one or two candidates for each assignment, there’s no point in taking up a valuable roster spot with someone who’s destined to fail the client’s technical interview. Recruiters use projectspecific technical questions to vet a candidate’s skills, and if they don’t have the expertise in-house, Krtolica asks an experienced contractor to conduct a technical assessment.

Kaushal’s streamlined process not only helps CSS recruiters submit candidates two to three times faster than the competition, they are able to submit six to seven candidates each day, surpassing the industry standard of two to three.

“Our proprietary process has lowered our recruiting costs by 15 percent to 20 percent, which gives me a chance to compete for margin-sensitive managed accounts,” says Paige Parikh, director of business development.

Work the System

Many staffing owners avoid companies that use a VMS or MSP because it’s difficult to get feedback on open orders and even highly qualified contractors seem to disappear into a black hole.

Kaushal has challenged that notion by building his firm’s structure and service model around the needs of large, managed accounts.

CSS business development directors monitor order and submission activity and conduct a daily status call with the MSP’s program manager. If the hourly rate is too low, they use facts and data to propose a higher rate before requesting a meeting with the manager.

Open communication with the program manager is critical, according to Krtolica, because it gives recruiters a chance to highlight the merits of returning veterans or minority candidates who may get lost in the electronic stack-ranking process.

Plus, the company isn’t afraid to take the gloves off to woo a managed account. Kaushal will lower the mark-up in exchange for guaranteed volume, longer assignments or exclusive orders. And he offers a discount to clients that are willing to turn invoices within 10 days.

Although Kaushal has been successful by rewriting the recruiting rulebook there are some rules he won’t break. “We’ve been successful servicing managed accounts because we build goodwill by being 100 percent compliant with the rules of the house,” he says.

Leslie Stevens-Huffman is a freelance writer in Southern California who has 20 years’ experience in the staffing industry. She can be reached at lesliestevens@cox.net.

[SIDEBAR 1]

Helping Veterans Win the Unemployment War

Creative Solutions Services LLC is partnering with Four Block, a non-profit organization founded by a former Marine that assists high-achieving student vets enrolled at New York University, City University of New York and Columbia University obtain internships at companies such as NBC Universal, Marsh & McLennan and JP Morgan.

In addition to providing career counseling and job search expertise, Gianne Doherty, director of business development, leverages her relationships with program managers to help the vets land internships and contract-to-hire positions. A recent report from Staffing Industry Analysts shows that one fifth of employers are recruiting veterans with great results; a separate survey by Monster.com found that 69 percent of companies that employ vets feel that veterans perform “much better” than non-veterans.

[SIDEBAR 2]

Snapshot: Creative Solutions Services LLC

Founded by Ashish Kaushal as a certified, minority-owned IT staffing firm in 1996, CSS specializes in high-volume, low-margin staff augmentation within the VMS/MSP arena. Approximately 60 percent of the firm’s revenue is derived from IT staffing, followed by accounting/finance and administrative. The firm also offers payrolling services, direct placement and executive search.

  • Headquarters: Wallingford, Conn.
  • Branch Office: New York City
  • Employees: 20
  • Annual Revenue: 2011 $6.45 million; five-year compound annual growth rate of 48.3 percent

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