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How can Staffing Firms Revolutionize their Business through Technology?


The COVID crisis has created tremendous opportunities for staffing companies to differentiate themselves and grab market share. 20,000 plus staffing and recruiting agencies are currently competing for business in the U.S. during what is being described by economists as the tightest labor market in 20 years. Candidates are no longer responding to traditional sources that staffing companies have used to service their customers in the past. Yet, staffing firms still managed to place an average 2.6 million temporary and contract workers per week in the second quarter of 2021 –  27.3% more than last year. But the reality is, each placement is becoming increasingly challenging.

What does this tell us? Amidst the pandemic workforce revolution, there will continue to be winners and losers. The winners have one thing in common: rather than sticking with the status quo, they are looking for new ways to engage candidates to create value for their customers. For staffing firms, business growth depends on expansion in existing accounts and acquisition of new clients. However, to achieve an edge in the current climate, staffing firms must innovate. With the war for contingent talent heightening and hybrid working conditions here to stay, recruiting practices are rapidly transforming. The game has irrevocably changed. Yet, this is a time of enormous opportunity, particularly for those in contingent staffing as work continues to transform and is a larger percentage of work. 

There are currently more than 7 billion Google results for the search term ‘how do staffing firms win more clients. This figure alone speaks to the challenge many staffing firms are currently facing. This guide will cover 3 key steps contingent staffing firms can take to win new clients in a way that sustainably grows your ROI and offers a contemporary client experience in the pandemic aftermath. These are:

  1. Create points of differentiation in a commoditized marketplace.
  2. Switch out traditional staffing agency software for innovative talent technology  
  3. Transform existing client relationships to expand your account share 

1. Create points of differentiation in a commoditized marketplace

There is tremendous commoditization and competition in the staffing market today, so it has become more challenging to differentiate services and provide value to buyers. 

However, there are new digital staffing services that are bringing value to customers which can creatively solve their talent problems outside of typical approaches. What are the avenues to selling those new services?

 According to the emerging body of pioneering solution selling practices, your best bet is to stick to the markets you are already established in but expand your offerings. Thus, by offering an extra layer of value to your clients, you will set your agency apart from your competition and make your firm indispensable overall. 

What does this look like for staffing agencies? There are amazing offerings that actually compliment a successful staffing agency’s strengths, which are relationship building and scalable talent delivery. There are slight product offering changes a staffing company can make to revolutionize the way they engage with clients and candidates. Here are a few examples: 

Managed Direct Sourcing

Let’s start by getting clarity on what exactly is meant by the term managed direct sourcing (MDS) and what the benefits would be for your clients should you choose to add it to your service offerings. LiveHire defines MDS as employing third-party staffing suppliers(that’s you!) to recruit, build, and manage client branded talent communities as a managed service, filling their contingent job requisitions with qualified candidates on-demand. Successful MDS programs are fueled by agile technology, great people, and the right processes.

Does a MDS offering have the potential to set you apart? 

Let’s take a look at the client benefits:

  • Reduces a client’s program spend (when compared to using a panel of staffing suppliers or a retained MSP to do direct sourcing with their team): on average client’s will see  30-50% savings.
  • Increases access to fit for role talent: 80% of business leaders acknowledge that employer branding has a significant impact on their ability to hire talent. For more on this, check out our guide to sourcing quality continent hires with managed direct sourcing.
  • Improves time to hire. For example, LiveHire technology has a 2-way text messaging that boasts a 17 minutes median candidate response time. Additionally, LiveHire,  has a 3 to 1 candidate submittal to hire ratio. For more on how direct sourcing can improve your time to hire check out this guide.
  • Reduces the gender pay gap and improves DEI recruitment. In fact, 56% of all hires through the LiveHire platform are women.
  • Improves candidate experience. LiveHire clients have achieved the highest candidate net promoter scores (NPS) globally. The platform delivers a 96% positive candidate satisfaction rating. For a guide to how direct sourcing can drive positive candidate experience check out our latest article on the topic.

By offering MDS as an additional service you can unlock significant cost savings, agility, brand awareness and speed of hiring for existing and prospective clients. For more on the business case for MDS check out our latest guide.

Why do this for a customer?

  • You get to leverage the customer’s brand to recruit talent and bring talent in through their careers page
  • You get to leverage their known talent (their ATS database, referrals, alumni, seasonal workers) to build the community
  • You get first access to requisitions, before their preferred suppliers
  • You get better engagement with the program managers and hiring managers
  • When you win, the client wins, so the client is incented to help you succeed. 

The emerging market has shown that the best MDS service providers are staffing companies that have been successful in a client’s preferred supplier program. A staffing provider that can perform for their clients, along with the capacity to deliver larger volumes make great candidates to be MDS providers. MSPs and Payroll providers have emerged as providers, but this solution is really just amplified delivery for the customer with certain advantages. 

A consultative service for clients on their talent acquisition strategy

The goal here is to transform your recruiting team into thought leaders and subject matter experts rather than transactional sales reps. Your team is likely closer to the candidate universe and will have a better understanding of the dynamics of the industry. Further, by being able to provide clients with a deeper understanding of the value of certain skills in relation to demand, transferability and future outlook, you will drive significant revenue for your business above and beyond hires. 

This may seem fine but how does a staffing agency transition from transactional selling to solution selling? The reality is this method will live or die by the strength of your recruiting team. Taking a Talent Community approach to your staffing business will show your clients that you actually have a deep solution rather than just trying to make a sale. 

Research from the Challenger Sale indicates that investment in training-up star performers in solution sales is well worth the upfront resources. In fact, as compared to transactional-selling, where the performance gap between standard and star performers is 59%, the gap widens markedly to almost 200% performance increase for top solution selling team members. According to Harvard Business Review research in the pandemic climate of business disruption, building and maintaining a relevant, responsive sales process that is understood throughout your business is the key way companies successfully respond to market changes. 

2. Switch out your traditional staffing agency software for innovative, contemporary tech

If we can imagine for a moment that a strong, aligned recruiting team is your engine, a cutting-edge system would be your engine key. The key unlocks opportunities of the emerging hybrid workforce revolution. How so?  Future recruiting successes will increasingly move away from a reliance on personal networks and manual practices toward embracing digital recruiting systems that capitalize on contingent and flexible workforce trends. Contemporary software for staffing agencies are embedded with automation and AI features that enable virtual hiring, accurate identification of fit for role candidates, superior candidate engagement, hiring speed and DEI (Diversity, Equity and Inclusion). Thus, allowing you to meet client needs with greater accuracy, reliability and reduced long term costs. The bottom line? If you’re not able to deliver on contemporary candidate and client expectations of speed, quality and personalized results, you’re not even in the race. So how can contemporary staffing software help you attract more clients?

  • Streamlines your recruiting practices

Contemporary staffing software should integrate with your website and all other existing platforms. Additionally, by delivering a tailored acceleration of your workflow, it will drive team efficiencies and fast track hiring, reducing hiring cost. Further by selecting a technology that enables you to source candidates from across a range of channels you will optimize your chances of growing a centralized, thriving talent community of engaged candidates. Lastly, some contemporary staffing software will allow users to respond to requisitions instantly. For instance, LiveHire’s mobile-enabled user experience, personalized job invitations, and curated Talent Pools are proven to create rapid candidate engagement. Powering your recruiting practices with innovative tech is key to standing out  in the current competitive market. In fact, LiveHire has recently been named one of the most innovative companies in 2021 by AFR BOSS due to our smart matching and innovative recruitment tech.

  • Happy candidates =  Happy clients

Since you can’t win clients without candidates, ensuring you have a system in place that provides candidates with the best possible experience, is a great place to start. Using LiveHire to close the loop on candidate feedback and create personalized touchpoints, organizations can deliver on a superior candidate experience. Some modern software, such as LiveHire, offer a two way text messaging communication feature, which delivers a superior, timely and personalized communication channel. LiveHire also delivers a 96% positive candidate satisfaction rating. Adopting a modern software that is AI powered to optimize talent matching potential and seamlessly facilitates candidate communication is a win win for candidates and clients alike. 

  • Showcases your engaged candidates via a nurtured, active talent community

Most contemporary staffing software is now designed to grow and nurture live talent pools, building a pipeline of candidates before a hiring need arises. Beyond improving the quality and speed of  your hiring, this is a great way to show clients you are poised to deliver reliably strong results, with interested candidates at the ready. Using LiveHire software, Raise Recruiting partnered with the Ontario Ministry of Health to assist them in accelerating their hiring during the height of the pandemic. Raise Recruiting was able to grow their pipeline via nurtured talent pools, creating a talent pool of quality candidates ahead of time. Consequently, Raise Recruiting was able to submit candidates for hire within 3 days and a 1 hour median candidate response time.

3. Leverage existing client relationships to expand your networks

According to research by Frederick Reichheld Bain & Company it can cost five times more to attract new customers, than to retain your existing ones. By boosting customer retention rates by as little as 5% you stand to gain a 25%-95% increase in profits. While this relates to B2C, the same premise applies when considering B2B. Essentially, there is an opportunity cost to overlooking the importance of existing client relationships.  

In fact, in many ways it is far easier to revive old relationships and leverage your existing networks, than to start from scratch. Consider the following strategies for re-engaging lost relationships: 

  • Identify past clients where placements were made with no further activity for months or even years. Perhaps they will be open to re-engaging or your key stakeholder may be able to refer you to another contact in the business with a hiring need.  
  • Ask for testimonials from previous clients. These can go a long way, in fact research indicates 72% of consumers will take action only after reading a positive review and 88% of consumers trust online testimonials and reviews as much as recommendations from friends or family.  
  • Identify and reach out to a past client that has since moved on to a new company. An old contact that was an ardent supporter of your business has the potential to open up a world of opportunities at their new place of employment and the odds are they will have transitioned into a more senior role so keep abreast with where previous stakeholders have moved to.
  • Optimize your existing client networks to unearth new prospects. Research by Market Metrics reveals the likelihood of increasing sales via existing customers is up to 14 times higher than the likelihood of selling to brand new customers. While this data applies to products and services in broad terms, there is a lot to be said for investing in existing clients as a means of working smarter not harder. In recruitment, this can be done in a number of ways: offering existing clients a service upgrade to one of your new niche offerings; asking for referrals; and leveraging the brand ambassador effect. Recent research indicates 84% of consumers trust peer recommendations above all other sources of advertising. With all your clients having access to social media at their fingertips these days, your most loyal clients could be ripe to help supplement your social media marketing efforts and introduce new customers.

Concluding thoughts…

The world of work is rapidly evolving and the scales are shifting in favor of a global contingent workforce. With the right systems, processes, and people in place there is an enormous opportunity for growth among contingent staffing agencies. By developing and marketing your unique offerings, powering your business with modern software and cultivating authentic relationships you will successfully win clients in uncertain times. 

For further info on leveraging world class recruiting software for contingent staffing reach out to our team today.


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