‘Temp Staffing Agency’ vs ‘On-demand Staffing Startup’ : Who will win ?
Temp Staffing industry is entering the phase of cold war.
Armed with technology and automation on-demand staffing companies are determined to replace the legacy staffing agencies. On the other hand with strong relationships and deep understanding of their niche, incumbents are prepared to adapt and fight to hold their ground.
If you are in the business of connecting talent, labour or workforce with clients for temporary jobs, On-demand staffing companies are coming for you. You could be a modeling agency, event staffing, domestic staffing, administrative staffing or a generic temp staffing company. On-demand staffing is going to disrupt the industry in the next few years.
Who will win this war, will this industry consolidate; and have few technology players control most of its market share or the existing companies continue to adapt and thrive? How do we spot the winning companies?
Peeking into each side :
On the side of On-demand staffing you have companies like Shiftgig, Wonolo, Alephants & JitJatJo among hundreds others who are trying to disrupt the market. These startups use technology to automate staffing processes. Companies now operate with 1 booker instead of 8 to 10 bookers. The cost reduction is massive but not limited to booking. Cost is reduced in accounting, marketing and retention. On-demand platforms are economical to their offline counterparts.
On the other side you have existing temp staffing companies like Atrium Staffing, BAHS, Julia Valler Staffing and Kinetic Events among many who are offering staffing in a more conventional way. Their unique strengths lie in personal touch, staff vetting & training. They know every client and client’s preferences for staff.
With personalized vetting, training, scouting, booking & management comes not only an additional cost but the innate challenges of scaling while maintaining a quality standard.
Some of these industries are already seeing the impact of the on-demand & automated platforms.
Here is Malissa from Bi Coastal Management, a leading modeling agency operating in NY, LA & Hong Kong :
Technology is probably the leading motivator of change in modeling industry. Since the dawn of the internet, and the explosion of sites to direct book models the rates and standards have slid.
What’s not visible amidst all this is a massive problem called ‘The curve jump’ for temp staffing company. To understand the problem we will take a small detour to our past and see how the ice was sold.
How is the ice sold ?
Originally ice was sold through an ice harvesting business. In the ice harvesting business in the early 1900’s, this meant that Bubba and Junior would go to a frozen lake or a frozen pond during the winter time and physically cut out large blocks of ice. In 1900, over 900 million pounds of ice was harvested in the USA.
Then 33 years later was the beginning of the first curve jump in the ice industry. This was the start of the ice factory era. Operating on the ice factory curve then meant that ice harvesting didn’t have to happen in the winter and it also meant that you didn’t have to be in a cold climate. You could freeze water centrally any time of year and any place you decided to set up an ice factory. In fact, ice factories for obvious reasons did a better trade in warmer climates — a counter intuitive shift.
Fast forward another 30 years and we move into the second curve jump — the refrigerator ice curve. People started to have refrigerators in their own home that could create ice on demand in a matter of hours, with no wastage, at almost zero cost.
It didn’t matter if you improved your efficiency dramatically on the previous curve because the entire market moved. And very few (if any) producers went from ice harvester, to ice factory, to refrigerator manufacturer. As you can imagine most ice harvesters didn’t see the disruption coming as with the ice factories and their owners.
What we are seeing now is temp staffing companies using technology to improve process efficiency of the previous curve namely softwares like icims, staffconnect, bullhorn, popbookings and other shift scheduling softwares that help better organize their work. Working with shift scheduling software is equivalent to improving the production of ice at factory when the market is seeking refrigerators.
The core premise of On-demand staffing is for recruiters & bookers to move out of the equation of staffing.
Let the platform connect client with the right staff under the policies and approval of bookers. While agencies and recruiters should focus on what they are great at: building a strong workforce, interviewing staff and knowing which staff is good for what job. Once interviewer punches the data in the platform, the platform should take care of staffing automatically or semi-automatically. Let’s see what an apt automation look like : Client should be able to post a job directly on your platform, platform should find a suitable candidate automatically from the ones interviewed by your bookers/recruiters. Once assigned the platform ensures staff shows up for a job, logging hours, charging clients, paying staff, getting feedback from client. All of these should be automated.
Existing temp staffing companies can be a unstoppable force if their ability to build a strong workforce can be combined with On-demand platform. Staffing industry must embrace disruption and unite to speed up the progress and innovation.
There are few proven solutions that are designed for the new curve. First is Wolf, which is designed specifically for On-demand staffing and is focused on evaluating staff and potential match for a given job. Another is Juggernaut which helps companies build any kind of on-demand service. Be it taxi, laundry or hotels. Both these platforms provide for a complete white label and private platform.
Final Note :
The 30 years have given us few critical lessons. Kodak, Britannica, Blackberry and many other companies failed to innovate. On the other hand, Apple’s biggest business was iPod when Steve Jobs saw that phones will be able to carry music, which will make iPod’s irrelevant. Hence iPhone was born. Innovation is inevitable and curve jumping will happen. The question is if you would be the one jumping the curve or let other companies do it.
I would love to hear your thoughts on this and what solutions & technology you are using to compete. Please comment here or email us at: firstname.lastname@example.org