Staffing Agencies Meeting Needs, but Challenges Are Mounting
Hire Degree of Difficulty
The region’s staffing industry has always been a solid barometer of the overall economy, and that is certainly true in this economy. Firms report that demand for qualified workers is high, and the pool of talent is small and in some respects shrinking. Meeting the demands of various sectors, firm owners and managers say, requires a mix of persistence, imagination, and, well, hard work.
Andrea Hill-Cataldo calls it the ‘Perm Division.’
That’s ‘perm,’ as in permanent-hire, or direct-hire, work. The venture she founded nearly 20 years ago, Johnson & Hill Staffing Services, has always provided such services. But they didn’t comprise a division of the company, and there weren’t staff members dedicated directly to them.
Indeed, the Perm Division is now staffed, and it is quite busy, said Hill-Cataldo, helping companies secure everything from administrative assistants to CFOs and CEOs. And it’s busy for several reasons.
They include the fact that many businesses, bolstered by a prolonged recovery that shows few if any signs of slowing down and challenged by everything from retiring Baby Boomers to on-the-move Millennials, are hiring. And also the fact that many of them need some help with that hiring.
“When businesses aren’t sure what they want to do, they might go temp or temp-to-hire, or they might just wait and see,” Hill-Cataldo explained, noting that the third option involves trying to get by without filling a vacancy. “But when they’re hiring on a permanent basis right off the bat, they’re pretty confident, and they know they need that position filled.”
The creation and consistent growth of Johnson & Hill’s Perm Division — and the reasons for both — are clear examples of how the staffing industry, as it’s called, is an effective economic indicator in its own right, and also how its operations essentially reflect, as a mirror would, what is happening with the local economy.
Discussions with Hill-Cataldo and others in this sector reveal that they are busy virtually across the board, meaning nearly all sectors of the economy; that they are handling increasing volumes of work in temp-to-hire and permanent hiring scenarios; and that they are becoming increasingly challenged when it comes to meeting the needs of their clients for qualified, motivated workers.
“Our work becomes more difficult as the pool of candidates gets smaller,” said Jennifer Brown, a certified staffing professional and vice president of Business Development at Springfield-based United Personnel, noting that, despite these challenges, the firm is meeting growing client needs across two main divisions — manufacturing and ‘professional’ positions.
All these developments reflect what is happening regionally, where companies are reasonably confident, need qualified help, and are having trouble finding it. And also where workers are equally confident, not shy about moving on to different challenges seemingly every few years, and are doing so in huge numbers, leaving their employers with the task of somehow replacing them, a situation that will certainly be exacerbated as MGM Springfield goes about filling roughly 3,000 positions over the next 10 months or so.
They also reflect the unemployment numbers and what’s behind them. This area’s jobless rate is higher than the state’s and the nation’s, which might sound beneficial for staffing agencies. But observers say it’s higher for a reason — most of those out of work lack many of the skills (technical and ‘people’ skills alike) to attain work.
The mirror-like quality of the staffing industry even extends to the broad realm of technology.
Jackie Fallon, president of Springfield-based FIT Staffing, which specializes in finding IT personnel for clients large and small, said a growing number of clients want and often desperately need individuals to collect and mine data, keep their systems safe from hackers, and enable computers (and therefore people) to continue working.
But in addition to now knowing how to find and evaluate good candidates (one big reason FIT is extremely busy these days), they are often surprised by and put off by the sticker price of such qualified individuals. They often want help at lower wages than what the market is often dictating, thereby adding a degree of difficulty to the search process.
“Think about a small manufacturer,” said Fallon while offering an example of what she’s running into. “Someone running a plant doesn’t want to pay an IT guy more than he or she is paying the plant manager. But that’s what the market is like out there; that’s what people are getting, and it’s creating challenges for companies.”
For this issue and its focus on employment, BusinessWest talked at length with several staffing-agency executives about what they’re seeing, hearing, and doing, and how all of that reflects the bigger picture that is the region’s economy.
Getting the Job Done
Hill-Cataldo was asked about how challenging it is to meet the needs of various clients and whether she was, in fact, able to keep up with demand. And with her answer, she probably spoke for not only everyone in her specific sector, but almost every business owner in Western Mass.
“It’s much more challenging to find qualified candidates than it probably ever has been, and I’ve been doing it for 25 years,” she explained. “We’ve never had to work this hard to get the right people; we’re getting them, but we’re just putting tremendous amounts of resources into doing that, and more hours. We have to work very hard.”
Brown and Fallon used similar language, by and large, and collectively, their words speak volumes about the employment situation and this particular cycle that the region and its staffing agencies find themselves in.
And like all businesses, staffing firms see life change considerably with those cycles.
When times are worse, or much worse, as they were during and just after the Great Recession a decade ago, there are large numbers of skilled people looking for work. The problem is, there isn’t much of it to be had as companies, out of necessity, make do with fewer bodies.
During such cycles, more hiring is done on both a temporary and temp-to-hire basis (providing some work for agencies) because companies generally lack the confidence to bring people on permanently.
When times are better, of course, the situation is reversed. There are more positions to fill as companies staff back up, but fewer qualified individuals to fill them. There are still large amounts of temp-to-hire work because companies generally want to try before they buy (and with good reason), but also considerably more permanent hiring, hence Johnson & Hill’s Perm Division.
If it sounds like there are no easy times for staffing agencies, that’s about how it is, although these would obviously be considered better times, or even, for some, the best of times.
“Technology is always in high demand because everyone needs it,” said Fallon. “We’re really busy; we had our best year ever last year, and this year, we’re continuing that trend.”
Both United and Johnson & Hill are also having a very solid year, continuing a recent run of them, and for a variety of reasons that have to do with the economy and a changing environment when it comes to the process of hiring.
Elaborating, Hill said busy managers often lack the time to recruit and interview candidates. Meanwhile, others aren’t fully up on the methods required to reach younger audiences and assemble a strong pool of candidates. Thus, they’re leaving it to the experts.
“The way companies recruit now has become so complex that, if you don’t need to hire on a large scale, you don’t have the time to invest in social-media campaigns and all the things you need to do to build that pipeline of people coming into your organization,” she explained. “That’s what we do all day; we’re building a pipeline of people for the positions we need to fill. That makes it cost-effective for us, and far less so for small companies that can just offload the whole process.”
Brown agreed, and said this helps explain why United’s Professional Division, as it’s called, is quite busy. But there are other factors, and they include the fact that, in most all respects, the market has shifted in favor of the employees and job seekers, who, like employers, have large amounts of confidence.
“With this economy, there are opportunities,” she explained. “People aren’t fearful about moving from one company to another, whether they want to enhance their skill set to get ready for the next step or relocate, or just earn more money.”
Meanwhile, larger numbers of Baby Boomers are making the decision to retire, leaving companies with the often-challenging task of replacing long-time, valued employees.
In this environment, where agencies have to commit more time, energy, and financial resources to the task of creating solid matches (that’s the operative word in this industry), staffing work requires persistence, resourcefulness, imagination, and often working with partners to help individuals gain the skills needed to enter the workplace and succeed there.
“Before, it might take a few days to find someone; now, it might take a few weeks,” said Hill-Cataldo, as she addressed that persistence part of the equation. “Searches are more difficult and time-consuming.”
Brown agreed, but stressed that, while the work is harder and it takes longer, there can be no shortcuts, because a firm can only succeed in this business if client needs are met — that is, if successful matches can be made.
And one key to accomplishing this is understanding not only a firm’s needs, but its culture, and then essentially working in partnership with the client to create what all parties concerned would consider a proverbial good hire.
“We need to make sure that the candidate we’re seeking aligns with what the client is looking to fulfill with the position,” Brown told BusinessWest, adding that this often goes beyond expected technical skill sets and into the realms of teamwork and company culture.
And with both sides of that equation, United is devoting time and resources to many forms of workforce development to help provide candidates with needed skills, she said.
As an example, she said the firm works with Goodwill Industries to present a training program to assist individuals with acquiring the essential skills to succeed in the workplace today.
“We need to make sure that the candidate’s character aligns with what the company is looking for, but also their competency as well,” she explained, adding that this is both an art and a science.
All of these traits are also needed within the broad spectrum of technology, said Fallon, adding that this has proven to be a lucrative, yet still challenging niche for the agency because, as she noted, technology is a critical component in every company’s success quotient, and also because the needs within this realm continue to grow.
This is especially true on the data side of the equation, as evidenced by growing use of the acronym DBA, which still stands for ‘doing business as,’ but increasingly, it also stands for ‘database administrator.’
“These are individuals in high demand,” said Fallon. “Data is a company’s goldmine; they need to protect it, and they need to make sure it’s running smoothly.”
Likewise, system security specialists are in equally high demand, said Fallon, adding that such professionals can and usually do demand a six-figure salary, a number that causes sticker shock in this region, which further complicates that aforementioned process of creating solid matches for both temp-to-hire and, increasingly, permanent-hire scenarios.
Matters are even further complicated by the fact that, increasingly, IT specialists can work remotely, which makes competition for them regional if not national or even international in scope.
“Someone can live here, work for a company in Boston, and maybe go into Boston once a week or maybe even less,” she explained, adding that firms in urban areas not only understand this, but they are generally less intimidated by the salaries such individuals are commanding.
The lesson companies can take from this is to be flexible and, when possible, allow people to work remotely, said Fallon, adding that, for various reasons, including an unwillingness, or inability, to meet those six-figure salaries, FIT has to cast an extremely wide net in its efforts to make matches.
“It’s easier for us to find someone from the Midwest to come here than it is someone from Boston — unless they were originally from this area,” she explained. “There’s more opportunity in Boston and places like it; if something doesn’t work out, they can walk down the street and find something else.”
Body of Work
While there are opportunities for staffing agencies during virtually all economic cycles, it is times like these when firms are particularly busy and when, like FIT, they are likely to record that proverbial ‘best year ever.’
But, as Hill-Cataldo noted, the rewards don’t come easy, and firms like hers must work harder than ever to not only meet the needs of clients, but exceed them.
In this respect, and many others, the staffing industry is reflecting the bigger picture and the economy of this region.
In other words, it’s a work in progress — in all kinds of ways.
George O’Brien can be reached at [email protected]