July 5, 2020

It’s Time for Business Model Innovation for Staffing Agencies

The drive for innovation thrives only when backed with the right talent. Most organizations are on the constant lookout for highly-skilled, trained, and knowledgeable resources who can help them meet their business goals.

However, in the face of growing customer demands, globalization, increasing competition, rapid technological evolution, and volatile economic certainty, the labor market has become increasingly complex.

The software development landscape has also been greatly impacted by these forces and is reeling under a growing talent shortage – especially as futuristic technologies become mainstream. Leveraging the services of well-established and experienced staffing companies is a smart way to alleviate these concerns. As such, we find staffing companies enjoying high demand for their services.

But, to remain competitive and add new clients, staffing companies not only need to ensure they can find the right talent but also have innovative business models that are relevant in today’s market.

Staffing companies have to look at value creation in the face of constant change and disruption.

Here is a look at how staffing companies can enable business model innovation.

Specialized high-tech skills portfolio on a consultative basis  

The past few months have highlighted the need for agility. This was proven during the COVID-19 pandemic and the way it impacted the world of work.

It is now established that remote working and distributed teams have to be a part of the organizational HR strategy. At the same time, the need for highly skilled and specialized tech talent has only increased.

Business model innovation for staffing companies could involve looking at providing highly skilled professionals for niche technologies to address the urgent skills requirements of organizations. Gaining access to skilled talent for niche technologies is challenging – especially for startups and small companies. These resources are highly expensive and not available easily.

Staffing companies can help organizations navigate the skills gap by enabling a high-tech skills portfolio. By sourcing and then helping companies meet their staffing needs in new and upcoming technology areas provide staffing agencies with new avenues to drive profitability.

Often such highly-skilled resources are needed at a consultative level or for a specific project. For example, a client might need technical experts to develop a data product. Instead of the client hiring the resource in-house, staffing companies can help these companies support such project-specific and technology-specific requirements with their resource portfolio. The client does not have to go through an expensive hiring and onboarding process but gets the skills needed without any compromise and, at a better cost.

To enable this, staffing companies can work with technology partners in developing economies where high-quality resources are available at a much lesser cost.

Support specific departmental operations

The objective of a staffing agency is to help organizations reduce risks and cut costs while maximizing revenue. While helping clients do so, staffing agencies can reinvent their business model by becoming the pillars that support specific departmental operations for their clients.

Most organizations have certain departments and operations that demand highly skilled labor. In fact, some departments have specific job roles that are niche.

Since the world is moving towards a more distributed and remote work model, clients can have staffing companies hire resources from other locations at cheaper costs. Staffing companies have access to high-value talent at lower costs such as customer success teams, testing and QA teams, etc. They can ably fulfill the manpower demands of such departments.

In case the resource does not fit into the client’s organization, the client can easily ask the staffing agency to replace the resource. This service can be immensely beneficial to the client since they get to easily replace a resource without having to go through the entire recruitment process. Clients also do not have to bear the burden of heavy salaries, recruitment, infrastructure, legal, administration, and other such costs.

Become the enablers of remote working

While staffing companies extend and complement an organizations’ in-house resource capabilities, the market dynamics now also lend themselves to another business model – that of extending the remote capabilities of clients.

The upheaval in the world of work and the growing prominence of remote working and distributed teams due to technological shifts and forces such as COVID-19 present the right opportunity to staffing companies to do so.

Many organizations have been thrust into the world of distributed teams and remote working during the pandemic. But many do not have the talent and infrastructure readiness to enable the same. Staffing companies can help their clients cross this chasm by helping them hire the right set of resources at the right costs for their clients. This becomes beneficial for the clients as they can set up their remote or distributed teams faster and ensure business continuity and immediate productivity from these teams.

Manage expensive resource hiring for clients

Another business model to adopt is to become providers of expensive resources. Highly skilled technologists, for example, are expensive hires for an organization. Many SMEs and startups who actually need the skills of these high-value resources are not able to leverage their expertise since this cost itself becomes prohibitive, especially in countries like the United States.

However, staffing companies can address this challenge by helping their clients access this high-value talent from a different location. India, for example, is a great place to source highly skilled, specialized technical talent at a fraction of the cost.

By increasing their skills portfolio and ensuring that they have a sizable bank of dependable and highly-skilled resources, staffing companies can help their clients reinvent their operations. They can encourage organizations to hire low-value resources locally to keep costs under control and provide them with these resources. Simultaneously, they also provide them with highly-skilled resources from more affordable locations such as India.

In Conclusion

The staffing industry is an idiosyncratic industry that has benefitted from the economic uncertainty in the business and labor market. Given the market shifts, it is clear that staffing companies have to look at the value-creating forces to better meet the customer needs. The idea is to migrate value such that it can move seamlessly between the organizations to meet the customer demands, address their pain points, and meet their recruitment desires.

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