How Vaco Reached a Record-Low 2.5% Turnover by Engaging with their Talent

A conversation with Jim Jhanda, Managing Partner, Vaco San Francisco

Did you know that on average 31 percent of temporary workers quit mid-assignment? This April 2017 SIA survey delves deeper into why contractors quit, and it runs the gamut from what you already know of contractor engagement, including bad communication, a failure to set expectations, lack of training, and an unpleasant work environment.

Still, the impact of that kind of turnover on a firm is undeniable. That’s why when an office like Vaco San Francisco comes along, we pay attention to their continued growth and success. Led by Jim Jhanda, Managing Partner, Vaco SF has found a way to maintain low attrition rates and leverage that baseline to make their office more effective and more profitable.

How? By focusing on contractor engagement and tracking key metrics.

It’s super hard and rare for a staffing firm to make contractor retention and redeployment a top priority. Vaco has done it. And when it’s done right, it can be a HUGE differentiator in the current market, where there is a war for talent waging.

Vaco is among the top 50 staffing companies in the US, with over $500M in revenue and nearly 5000 consultants. The San Francisco office represents 20% of that business and is their largest franchise.

Maintaining a Low Attrition Rate

One of the major successes that team Vaco SF has achieved is the ability to maintain a record-low attrition rate. Attrition (sometimes called mid-assignment turnover) is measured as the number of contractors who leave a job before it’s completed or before the end date of the job.

As the SIA survey cited earlier shows, 31 percent of contractors surveyed quit before an assignment is over. At the San Francisco office of Vaco, the attrition rate is 2.5 percent per quarter. It’s an attrition rate so low it’s practically unheard of.

How does Vaco keep attrition down? Jim Jhanda spoke to Sense’s content team in a wide-ranging interview. “You’ve got to be able to keep the consultants out and engaged,” he says. “They’re essentially your resource.”

Vaco SF also focuses on placing contractors at statement-of-work, or SOW, projects. Contractors are brought in as full-time, salaried employees. Because of this, the contractors aren’t treated as temporary.

Low Attrition Rates Save Money

Nationwide, Vaco has an average contractor tenure that’s more in line with the industry average of 5 to 8 months. The longer placements at Vaco SF, which average two years, make it easier for Vaco SF to redeploy talent, which makes the contractor more loyal to Vaco.

The low attrition rate has an added benefit: it saves the company money. A low attrition rate helps to grow a business’s profitability.

High attrition rates cause problems not only for the staffing firm, but for the client as well. Before a contractor leaves a project, there should be a transfer of knowledge and onboarding and training of the new contractor. If a contractor leaves without notice, this may not be possible. This slows down completion of the project for the client and reflects poorly on the staffing firm.

Employee Engagement

One of the major tactics that Vaco uses to keep attrition rates low is a focus on engagement.

Vaco SF engages with contractors by deploying an engagement platform, Sense, to send out emails for anniversaries, birthdays, benefit changes, kudos, and any other exciting company news. Keeping in touch and updating employees makes them feel more connected to the company. It adds a human element to what otherwise might — especially for contractors placed on client sites — feel like a big, faceless entity.

The majority of contractors for Vaco SF work in the client’s office, meaning they’re generally onsite. Vaco SF also has some contractors who only have a project one month out of 12. In one instance, those contractors are content developers for a restaurant and hotel review site. Staying engaged with these employees between gigs means that they’re more likely to come back the following year, instead of finding a different project.

Engagement with On-site or Remote Employees

It’s also important for staffing firms to recognize that engaging with remote employees takes different tactics than on-site employees. With an on-site employee, you run into one another. You see each other in the kitchen and have a short conversation while pouring coffee or prepping lunch.

For remote employees, these chance opportunities don’t exist. Jim tries to reach out to remote employees by phone, by text messaging or by email to stay in touch. One of the things Vaco likes about Sense is that they can choose the method of communication (phone vs. email), and cater to individual preference. It’s important to remember that everyone is busy and you don’t want to inconvenience them or take up their time needlessly.

Remote Worker Engagement

To keep remote employees involved in the company culture, Vaco SF sends gift or wine baskets to their home. “Instead of leaving it on their desk, we send it to their house so they can receive it in front of their kids and spouse,” Jim says. He also relates how Vaco SF has received very positive feedback about their engagement program. It’s all about that extra, personal touch.

Vaco SF also does a lot of video conferencing with remote employees. Meeting over Skype or Google Hangouts helps to put a face to the work instead of just a voice or an email signature.

On Wednesdays, Vaco SF has community building events where everyone, even the remote employees are invited. All of the employees get together for a yoga session or to learn from an ergonomics coach about health and wellness. This is a great time for everyone to meet, get to know each other, and build a community.

Choosing a Client to Target

Another reason that Vaco SF’s attrition rate is so low is how they choose the clients that they work with.

“One thing we look for when choosing a client — and this is kind of ideal scenario — is we look for a client that’s cool and sexy. When we call a contractor up, they’re going to call us back because they’re excited about working at that company. And I know that there might be a few companies like that in the bay area, but targeting those companies is really helpful because they’re great places to work,” says Jim.

Another place they look is on Fortune’s list of 100 top places to work. If a company is treating its full-time employees well, it’s likely to be a good place for contractors as well.

Jim also says that they look for companies that want to partner with a vendor. “We like to work with companies that like to outsource a lot of work because that aligns very well with our business model. If they believe in outsourcing a workflow, that’s the kind of work that Vaco San Francisco wants to target.”

By using a combination of personal, human interaction and an engagement technology platform like Sense, Vaco SF has transformed their Contractor Care Program.

The Future

The staffing industry has become more commoditized and tool-based. It’s likely that this type of growth will continue. And the technology advances make it easier for staffing firms to scale faster and manage a larger contingent workforce.

Automation is the key for growth today and in the future. The more processes that can be automated, the faster it goes. Automation should definitely be used for the recruiting process. This means the staffing firm can interact with more people and do it faster. Speed keeps a staffing firm competitive.

One way a business can automate is with software. Whether it’s a CMS on the front end, something to place contractors, something to do reference checking, or an engagement platform like Sense to keep consultants engaged.

Software can be used to stay engaged with contractors by sending emails and text messages and NPS surveys out. Surveys can be used to make sure contractors are happy and to gather other data. Software should also be used to analyze this data once it’s gathered.

In fact, Sense does just that for staffing firms. Sense can automate contractor engagement which will help to reduce attrition, improve redeployment, and increase profitability.

The more your business can be automated, the more success it’s likely to have.

Maintaining a low attrition rate is no easy task, but it’s worth it when it leads to an increase in profitability. A low attrition rate also makes it easier for a business to recruit and retain both consultants and clients.

When asked for parting words that might help others in the industry, Jim responded with these thoughts on his priorities as a leader:

“The number one thing is customer concentration levels. What happens if your whale swims away? It’s important to diversify. Secondly, there’s only so many hours in a day and you have balance your work and personal lives. You never can cross everything off your task list. The third thing is essentially hiring and training people and scaling a business, but at the same time trying to keep your existing clients and employees happy.”

Also, his favorite inspirational quote?

“Do it, delegate it, or delete it.”

Wise words. Thanks to Jim Jhanda and Team Vaco for the insight.

Sense is helping Vaco SF and many other staffing firms improve their onboarding and contractor engagement every day. To learn more, visit sensehq.co or email info@sensehq.co to request a demo.