Is diversification the answer for struggling healthcare staffing firms?
Healthcare Staffing Report
Is diversification the answer for struggling healthcare staffing firms?
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After two tough years of declines in healthcare staffing, some firms are considering diversifying their business models to make future downturns a bit less painful. But doing so brings additional costs tied to expansion or restructuring, plus the risk of diluting their current strengths. Is diversification worth the expense and complexity?
Absolutely, said Crystal Fullilove, SIA’s healthcare staffing analyst. Building out new business areas can help firms generate new revenue streams, adapt to market changes and gain competitive advantages — but even so, she cautions, there are some risks.
Ahead of SIA’s Healthcare Staffing Summit, where Fullilove will lead a panel entitled Diversifying Your Business: Seizing Opportunities and Managing Risks, she addressed some of the benefits and challenges of diversifying your healthcare staffing business.
Q: What are some strategic approaches healthcare staffing firms can take to diversify their business lines?
A: Before we dive into the strategic approaches, I think it’s important to talk about why it’s so important in the first place.
Top of mind is that it generates new revenue streams. In this down market, we’ve seen sharp contractions driven by decreases mostly in travel nursing and per diem nursing. Diversifying allows staffing firms to reduce their reliance on customers who look to them for exclusivity in one segment.
It also helps keep staffing firms on their toes. It ensures they’re always looking to the future and staying on top of market conditions.
Diversifying is a competitive advantage, especially for smaller firms: They’re innovating, they’re adapting to change. This allows them to compete with larger firms.
Q: Diversification is easier said than done. Given that, what are some strategic approaches you recommend?
A: When thinking about diversification, you can see it as an opportunity for firms to leverage technology or an opportunity to onboard a new platform. It might be an opportunity to outsource pain points within your staffing organization. I think it depends on your goals and your vision. For example, are you looking to grow into international recruitment to mitigate the impact of the nursing shortage?
A really important part of a diversification initiative is staying true to who you are and your company goals. Then building your strategy from there.
Q: Is there one thing all firms need to consider — no matter what their individual goals and visions are?
A: Technology. It’s a competitive advantage; it’s something all firms absolutely have to have.
This is a market that moves very quickly. It’s a market where you have to adapt to client needs. It is a market where we have a shortage of healthcare workers. Not having the most up-to-date technology is not an option for healthcare staffing firms.
Q: You’re leading a panel on the topic of diversifying your business lines at SIA’s upcoming Healthcare Staffing Summit on Nov. 7. Why is this topic so important?
A: We can all learn something from those who have done it — we can learn from their mistakes. We’ll hear from DeLibra Wesley, who’s the founder of National Recruiting Consultants. She’ll talk about education staffing. We also have Erik Schumann, the chief operating officer at Health Carousel, who will speak about international recruitment.
Laura Magner, the chief operating officer at CoreMedical Group, is going to speak to permanent placement. And we have Aaron Littles. He’s the co-founder of Per Diem Therapy Xperts, and he’ll be sharing insights into the evolution of per diem and how he’s able to leverage technology to expand his reach beyond just the typical per diem nurses.
I think the audience will come away with an understanding of which occupations are in high demand and which settings are desirable to expand into. I think they’ll have a better understanding of which vertical lines make sense based off their business goals. And I think they will walk away with the right questions to ask and to help create a plan to move forward to expand in the appropriate area.
Q: Can you recommend some research on the topic?
A: Check out SIA’s Best Practices to Grow a Healthcare Staffing Firm report. It helps you understand the insights behind finding a niche, brand building, winning clients — it’s a pretty broad report.
We also have our US Staffing Industry Forecast: September 2024 Update report. It includes market sizes and growth estimates for 12 occupational segments of temporary staffing, but there’s also detailed sections devoted to each segment, including a healthcare portion.
The Healthcare Staffing Summit will be held Nov. 6-8 at Loews Arlington Hotel in Arlington, Texas. You can see the agenda here and register here.