Using Diversity to Build Resilience in Your Procurement Strategies
Organizations must always be ready to face widespread disruption and unexpected events in an ever-changing, turbulent landscape. Continuous improvement is necessary in order to achieve organizational longevity. Weathering the economic, social, and technical hurdles that any business can face requires resiliency and highly focused company goals. Being resilient means being able to anticipate, prepare, identify, and respond to potential risks and minimize the impact they may have on your organization.
Your staffing agency has the opportunity to successfully define resilience by spreading out your sources of revenue to multiple areas. This means if one area has a negative impact, the others will help to stabilize revenue until things change or the company can adapt.
Diversifying your client portfolio means looking at multiple sources of income from multiple industries or geographical areas. If you can expand your footprint even internationally and offer services you’ve not explored before, your agency will reverse the siloing effects of niche marketing and be more prepared to deal with unexpected challenges of the future. Expanding into contracting, rural sourcing and mass talent procurement are some key methods by which your agency can cater to a more diverse client base.
The Hidden Issues With Niche Market Strategies
Staffing agencies have been working hard to put people to work for centuries, with roots dating back to late 19th century England. A niche agency itself, Mrs. A.E. Johnson Employment Agency, one of the first agencies in the United States, worked to pair maids and footmen with upper-class households.
At the end of WWII, staffing agencies boomed as demand for skilled labor increased. As competition continued to grow over time, many staffing firms focused on developing a niche in order to stand out. Specializing in industry-specific experience within industries such as healthcare, entertainment, sports, and more meant agencies could develop a strong candidate pool with the right education and experience to fit the role. However, these niche markets often limited applicants to one or two demographics.
Focusing on one niche can be excellent from a positioning standpoint. However, it leaves your organization vulnerable to changes in the market. Take the most recent COVID-19 pandemic, which stemmed a complete global recession within several months of March 2020. In July 2020, 49.8 million people reported not being able to work due to the closure of their workplace or lost business.
A K-shaped recovery took place during the pandemic’s recession. Service-based occupations were among those most likely to temporarily lose work and revenue, including airlines, entertainment, etc. On the other side, some industries—those in the tech industry, manufacturing companies that could adapt to the mass production of PPE, and the healthcare industry—had significant impacts which dramatically increased revenue.
This uneven recovery led to rising inequality, an accelerated advancement in technology, agencies facing problems in staffing and recruitment, and multiple demographics unable to find employment in part due to niche staffing agencies searching for talent outside their resume.
Diversity as a Strategy for the Staffing Industry
While we can sometimes identify trends and changes, the future is unpredictable. The pandemic became an example for organizations to prepare themselves for market shifts in the future. To do this successfully it is important to start focusing on diversity in the workplace today.
Expanding into other industries, geographies, or services can be a beneficial option for building resiliency through a more diverse talent pool but it comes with its challenge. You can begin to optimize your agency’s success in migrating to a multi-industry setup by working with vendors that can support the administrative functions that are needed to place one or many candidates. If resources allow, suitable acquisitions and partnerships can make the transition a quick one.
How To Diversify Your Target Market
Here are a handful of ways your staffing agency can diversify its client portfolio by expanding its target market.
- Look at the industries you already serve and the ones that are expected to grow. Where can you pinpoint gaps in diversity and find areas of potential that could better set your agency up to reach candidates in areas you haven’t utilized before
- Examine the staffing needs of growing industries and look for common skill sets for placements you’ve already made. What skills are in demand or transferable to multiple industries and jobs that your talent pool might not have highlighted? Can you adapt your recruitment process to seek out these skills
- Bring in industry experts to help you build your knowledge in other service lines
- Engaging independent contractors, freelancers, and mass talent procurement are a growing trend that could be implemented as options for your clients and prospects, especially if you’ve been solely doing individual or small group placements.
Expand Your Footprint and Offerings
Scaling companies can be extremely busy, which means once buyers find someone they like, they tend to want to work more with them exclusively on an ongoing basis. Your agency can meet the evolving needs of your clients by expanding your procurement strategy to include multiple geographic territories and services as you grow. The idea is to make yourself a one-stop-shop—a solution that they can’t see themselves working without. The more you can help a client solve their hiring challenges, the more likely they’ll continue to use you going forward.
Remote work has evolved further than just call centers and telecommunication companies. The pandemic has shown how simple, and even much more productive, working from home can be, and that access to the perfect talent is no longer limited to borders and the commuting range around headquarters. Your agency doesn’t need to be limited to a local, sometimes less-diverse talent pool either. Serve up the best talent from around the globe by changing where you’re seeking and placing candidates.
Here’s what you can do to start expanding your footprint today:
- Offer expanded services to include all types of workforce offerings, from direct placement, contract-based services, or hiring mass talent. If necessary, utilize consultants to help guide a strategy that’s set up for success.
- Staffing shortages have been stressful for hiring managers and human resources talent teams. Construct a trusting relationship with your clients. Once you’ve built that trust, you can institute a “land and expand” sales model that increases account penetration by offering expanded placement territory and services. Remember, it’s always more cost-effective to maintain a client than to find a new one, and trust is a key factor for long-term connections.
Expansion Challenges to Your Procurement Strategy
Expanding your staffing agency’s services, territories, or offerings can mean more business but can leave you overwhelmed about where to begin and how to scale your agency as you grow and adapt. There are going to likely be growing pains, however, we have some valuable tips for ensuring the process is as smooth as possible.
There are no economies of scale when it comes to hiring. The only way to increase efficiency is to outsource these tasks to a dedicated, experienced team. Whether you’re hiring one person or one hundred, there is the same quantity of tasks to onboard employees and contractors—but you’ll be spending weeks (as opposed to days) ensuring compliance with each and every page of federal and state forms, company policies, NDAs, contracts, background checks, payroll processing, and ID verification. Minimize the pressure on your own staff by outsourcing your back office functions so your focus can be on the business itself.
When expanding into multiple industries and geographic locations to implement diversity recruiting, the number of laws governing compliance will grow as well. Growing your talent pool across the 50 US states and more than 180 countries comes with significant complexities. If done incorrectly, compliance can have significant financial repercussions on your agency. Don’t try to go it alone.
Take the steps today to build resilience in your staffing agency and procurement strategies. Let the experts at People2.0 guide you. Book a consultation today.