In my last post, I discussed several challenges staffing firms face. Here, I address planning for growth through partnerships — focusing on business strengths and building around weaknesses
Partnering with the right financial and back-office services providers allows staffing firms to focus on their strengths.
As the business grows, consider the key goals of the company and what it will take to reach them. Every business is different, but here are common best-practices that help staffing firms plan for growth:
As staffing firms expand, they need to create a stronger talent pool while maintaining a certain amount of liquidity. Partnering with a flexible financial services provider ensures that staffing firms have the financial backing and cash flow liquidity needed to pay staff, meet operational expenses and handle back-office administration.
Victor Robinson, CFO for Tamah LLC, said partnering with an alternative lender enabled Tamah to “pay the contractors when we invoiced, as opposed to waiting 60 days. This has been a great relationship for us.”
You don’t have to know it all to run a successful staffing business. Map out your business goals and plan for the challenges you might encounter. Partner with providers that will support your business and give you the flexibility to scale up and down as needed without increasing overheads.
When you’ve gone to the time, effort and expense of a recruitment drive, the last thing you want is for the chosen candidate to drop out almost straight away. According to research done by Gallup, millennials are the generation most likely to ‘job-hop’ and are the least engaged in the workplace, with 21% saying they had switched jobs in the past year. If you have a vacancy to fill and are about to start your recruitment drive, here are just a few ways you can find the best graduates who will have the loyalty and staying power you need.
Ask for Video CVs
You can often gain a good idea of a candidate from their paper CV, but you can gain even more insight if you ask for a video CV as well. Wading through paperwork can be a time-consuming exercise, and there’s the risk that some of the best candidates for the job may be filtered out simply because they haven’t submitted a blindingly brilliant CV.
A video CV can help you get a feel for how enthusiastic they are about getting the job, and it helps you see the person behind the application number. Some of the most confident and eager candidates will look mediocre on paper, but give them a platform through video CVs and they could shine.
Think About the Quality of the Job You’re Offering
Have you ever considered that it could be the job you’re offering and not the candidates at fault? If you’ve struggled to fill a vacancy and find a candidate with staying power, it may well be because what’s on offer isn’t attractive enough to keep them in post. According to a report commissioned by the Chartered Institute of Personnel and Development (CIPD), many UK employees thought their company did a good job at helping them develop their skills, but fell short when it came to developing their careers.
Almost half (43%) of jobs were said to be failing to provide adequate career progression, with a sixth of workers reporting they were in a role which offered no hope of development at all. If you’re not thinking ahead and setting out the future opportunities you could offer your candidates, it’s little wonder people job-hop to maintain a sense of momentum.
Use a Specialist Agency
Companies such as Inspiring Interns specialize in placing graduates, and they’re often faster, more efficient and more accurate when it comes to sourcing the most suitable candidates. Rather than cast the net wide by advertising on a general job site, advertising through a specialist recruitment agency can mean you get higher quality applicants who are better suited to the role you have to fill.
As recruitment drives can be time-consuming and costly, using a graduate agency can mean you save yourself a lot of effort in the long-run. Many of the graduates a specialist agency has on their books will be high caliber and motivated to find their perfect job, and if they can find you the best fit, that person is more likely to stay with you.
Once you’ve got a graduate in place, make sure they feel supported. This is probably going to be their first ‘proper’ job and it may take a while for them to master the ropes and build up their confidence. They will be more likely to leave if they don’t feel they’ve been given the time and support needed to understand the work.
Use the first week as an orienteering exercise, so they can really learn about their role and how they fit in within the wider company structure. Ask for feedback on where they might need more guidance and, above all, be patient!
In an era of short attention spans and chronic job-hopping, higher employee retention rates are at the top of many recruiters’ wish lists. Use any or all of these techniques and you up your chances of finding the ideal candidate who will become a loyal and long-term employee.
With GDPR now in full force, UK businesses of all shapes and sizes have to gather and manage citizens’ data according to a strict set of regulations. This can be more of a challenge for smaller businesses that perhaps don’t have the in-house legal expertise or dedicated information management teams of their larger competitors. Regardless, the legislation applies ubiquitously, and the onus is on companies to adhere to the rules – or risk facing severe penalties for non-compliance.
Over the past year or so, businesses have understandably focused on achieving full compliance with new GDPR requirements. However, it’s important that they also pay attention to long-standing regulations around data retention. There is a lot of emphasis on data protection and privacy, requiring businesses to release data they don’t need or have permission to use – but there is also information that businesses are in fact legally required to hold onto for specific periods of time.
Compliant data retention therefore requires having systems in place to determine when employee records should be kept, and when they should be destroyed. Failing to manage your records correctly could have disastrous consequences for your business, such as eroding employee and customer trust, losing or compromising important personal data, incurring fines from legislative bodies, and increasing the administrative burden.
Employee and HR records are critical company files that come with potentially complex retention periods. If your business is without a dedicated HR or staffing manager to manage your employee records, ensuring compliance can be hard to get right.
To help you understand statutory retention periods for employee records, here are some examples of what you need to pay attention to.
Non-statutory retention periods
Many types of personnel records don’t come with a legally prescribed retention period. These grey areas can be tricky to navigate, making it hard for employers to determine how long they should hold onto various documents. In the absence of any definite policies, most companies follow their own rules, depending on their needs and the type of documents being stored.
As a guide, it’s best to always bear in mind the time limits for potential tribunal or civil claims when determining retention periods. This way you are always protected should a claim occur years after the event. A good rule of thumb is to hold onto all records for at least six years – or five if your business is based in Scotland.
Best practices for records retention
Documents that require retention will need to be stored somewhere safe and accessible. How and where your documents are stored is critical to their retention. If you are planning to store your documents in boxes on-site, make sure you have the necessary space to keep them safe and out of the way. Of course, who has access to your records is as important as how and where they are stored.
To ensure that all your records are stored securely, you need to put in place access control measures. Documents move around regularly. They are passed between colleagues, removed from storage and often get lost or misplaced. There’s no point in retaining documents if you don’t know where they are at any given time. A comprehensive cataloging and monitoring system will ensure that no records go missing. Better yet, you may consider outsourcing your records management needs to an off-site provider.
Navigating data regulations and retention periods can be enormously challenging and confusing. When something is overly complex or unclear, it’s tempting to simply ignore it – or put it off indefinitely. Given that data protection and retention requirements are more important than ever before and thus under the spotlight, you need to stay in line with the legislation.
The vision of total talent management has long been in the minds of the HR and staffing community, but interest in the topic peaked in early 2018, driven by the exponential growth in contingent and direct work engagements.
But despite total talent management promising improved efficiency and reduced costs, according to Staffing Industry Analysts’ 2018 Workforce Solutions Buyers Survey, only 11% of respondents had a Total Talent Management (TTM) solution in place.
A number of factors combine to make true TTM very difficult to achieve at the moment:
New and evolving workforce channels. Permanent, temporary, gig workers, contractors, freelancers, statement of work. There is an array of channels available when an organization needs to resource any given project. And every channel engages and pays workers in a different way.
It’s very difficult bringing all these different scenarios and logistical challenges into a single TTM solution. For example, how do you make the same piece of work available to a talent pool containing both permanent candidates and freelancers? There’s no simple way to combine the logistics or payment processes into one workflow.
Lines of responsibility and visibility challenges. Presently, it’s common to see the responsibilities for different workforce channels split across business lines. For example, HR might take ownership of permanent and temporary channels whilst Procurement may be responsible for consultancy and statement of work engagements. This example puts budgets, reporting, data and control in two, often siloed, departments and in reality, it can often be far more complex.
The key to TTM is visibility. Being able to see where and how all resources are being utilized is a prerequisite for making informed resourcing decisions. However, with HR and Procurement only getting a partial view of the complete picture, it’s impossible for them to answer the “how best do I resource this?” question.
Software capability. The third factor currently preventing true TTM is software. A TTM software solution should be able to take in the requirements for any given project and determine the best way to resource it after evaluating every workforce channel. At present, this ‘super’ platform does not exist. And even it if did, the cost to unpick and replace incumbent HR and Procurement software with a single platform will pose too great a risk for many.
Despite the challenges facing organizations wanting to embrace Total Talent Management, it is possible today – to a degree.
The key to tackling TTM in 2019 is the integration of specialized workforce channel management tools via a central point of truth.
For example: Workday for permanent employees, SAP Fieldglass for recruitment vendor management and TalonFMS for directly sourced talent pools, freelancers and independent contractors. Through technical integrations, it is feasible for all requisition orders to be created in Workday with each specialized system in the technology stack managing the specific workflow and automations of their workforce channels behind the scenes.
Looking further into the future, there will likely be two strategic solution choices for TTM:
1. The all-in-one super tool. At some point in the future, someone will attempt to create the swiss army knife of HR/Procurement platforms. It’s hard to visualize because no other area of business has an all-in-one solution. Even the all-powerful MS Office is a collection of specialized applications.
2. The modularized integration of specialized tools. With the world of work continuing to evolve, we’ll see new workforce channels establish themselves. Each will bring their own complexity and nuance, requiring specific tools.
I believe the smart organizations will choose the modularised approach. Not only because it reduces the cost, risk and disruption of replacing existing systems, but it also increases flexibility and the ability to adapt to new workforce channel opportunities.
With employment heavily regulated by federal and state laws, understanding legal implications is vital and ensures businesses don’t make costly mistakes. Worker classification, insurance limits, tax calculations and staff reporting are critical business functions that have to scale smoothly in times of business growth.
Workers inaccurately classified as independent contractors (Form 1099, taxes not withheld) and not as employees (Form W-2, taxes withheld) can cause issues. Their employers can become liable for the tax backlog, penalties, and fines from the Department of Labor and the State. Insurance requirements for workers compensation and unemployment are also different by state and federal laws with distinct requirements between worker classifications.
The Costs of Growing Back-Office Administration Can Quickly Creep Up
The costs of administrative operations like timesheet management, payroll processing, and employee onboarding can quickly add up and soar as the business grows. As staffing firms expand, they face decisions of how to finance and control their growing overheads, while quickly fulfilling new and larger contracts. Customers expect placements to be filled within days, putting a financial and administrative strain on the staffing agency to recruit, onboard and pay workers – all within a week or two.
Understanding Cost Base and Profitability of Contracts
Another challenge is the ability to make payroll when taking on new or larger contracts. Though some contracts with smaller clients allow negotiation, larger or more established clients have set terms and conditions that are non-negotiable. Each contract requires close analysis to determine the margins and profitability. Renegotiate the terms and conditions before renewing contracts if the cost of running the account is higher than what it’s earning. If terms are non-negotiable re-evaluating the resources required and where savings can be made. Understanding how much is earned vs the cost of running the account allows business owners to make informed decisions about each contract.
Victor Robinson, CFO for Tamah LLC, shared that when his company went to an open bid contract model they knew they needed to become more competitive. “In most cases, we understood that our profit margins would be shrinking,” Robinson said. “At the other side of the equation are our independent contractors, the individuals that ensure the educational needs of these children are met. They needed to be paid on time to attract and retain the highest possible level of talent.”
Worker Experience and Compensation is Vital to Recruiting and Retaining Top Talent
The current low unemployment rates make it easy for workers to change employers. Offering competitive benefits and creating a good contractor/employee experience helps staffing companies to retain their top talent. The first interactions set the tone for the employer-worker relationship. Thus, it’s important to take the time with the employee onboarding process. Unfortunately, many staffing businesses are under-resourced and under pressure to fill the positions within days. This makes it hard to provide a great onboarding experience for the workers, while trying to juggle employee eligibility verification, setting up payroll and taxes, and manage all other contract related paperwork.
In my next post, I address how the right partnerships and growth plans can help staffing firms weather some of these challenges.
The modern economy is becoming more dependent on contract and gig workers, employing millions in flexible and sometimes temporary positions. These workers can be a way to deal with seasonal highs and lows, or to expand into more markets without the overhead costs of a full-time staff. Gig workers are on demand, ready whenever they are needed. However, one of the drawbacks to these positions is that many employers are not able nor required to offer benefits such as short-term and long-term disability insurance.
This can put workers in a state of unease, without the protections that traditional employment typically provides. And they’re not happy about it. A new survey from the American Institute of CPAs has found that 80% of workers would choose a lesser-paying job with good benefits over a higher-paying job with no benefits. In today’s tightening labor market, employees are expecting (and receiving) higher salaries and better benefits. With this shift in mind, it’s critical for businesses to explore other options to remain competitive and maintain a productive and satisfied selection of employees for contract, freelance, and part-time positions.
An important benefit that is often missing when workers are not working full-time is disability protection. If a worker experiences an injury or illness that puts them out of work, they may have few supports available and could quickly slip into poverty. According to the Federal Reserve Board’s 2017 survey regarding household economics, about 50% of adults don’t have a rainy day fund that could cover them for even three months of living expenses. Also, 40% don’t have enough cash to cover a $400 emergency expense.
Even if a company is part of the rising gig platform — like Uber or Lyft —or hiring for a temporary position, offering access to disability benefits will show a company is truly looking out for the health of its workforce. Should the need arise, forward-thinking employers who can provide an alternative option to protect their employees’ financial well-being even without offering long-term disability insurance will be at the top of the totem pole. The Social Security Administration (SSA) estimates one in four 20-year-olds will be disabled before reaching age 67, so the pool who may need this assistance is vast.
Luckily, there is a federal benefit that provides a much-needed safety net for employers in this position: the Social Security Disability Insurance (SSDI) program. SSDI is an income replacement insurance for former workers with disabilities, provided through the Social Security Administration. It’s versatile and available to everyone who meets the requirements, no matter how many employers they may have. SSDI Extended Benefits is free for employers to provide access to disability protection to their workers, allow businesses to highlight a valuable resource for workers to fall back on when things take a turn for the worse. These programs help workers access SSDI when and if they need it for a severe disability. This program also is accessible to workers who choose not to purchase their employers’ long-term disability insurance plan.
Work history, education, age and mental or physical conditions are all factors in a worker’s application for disability income through the SSDI program. Typically, workers must have paid FICA payroll or self-employment taxes for five out of the last 10 years to be covered.
Whether employees are ineligible or simply declined group disability insurance, they may be eligible for SSDI. It’s an important federal insurance program with numerous benefits that many workers aren’t aware of and which carries tremendous complexity and challenges when they try to access it. Even with limited financial resources or the capability to offer traditional benefits, providing an avenue for accessing SSDI more conveniently is an innovative way to stay in the race, putting companies at a competitive notch above the rest.
When interviewing candidates, recruiters are determining whether they have the experience, skills, and education necessary for the open position. These are items we consciously consider when deciding on who will ultimately get the job offer in the end.
But what about the things we don’t consciously consider?
By nature, humans are often quick to judge – whether we realize it or not. I’m talking, of course, about unconscious bias. Some studies suggest that our brains are wired to be predisposed towards stereotypes. Others have shown that we’re more likely to befriend people who are similar to ourselves.
This is obviously not ideal. Particularly when it comes to a workforce, diversity is good for a variety of reasons. People who come from different walks of life bring differing cultures, viewpoints, and ideas – all of which keep a business thriving and prevent stagnation; and while there are different steps we can take to minimize our unconscious biases, it’s almost impossible for people to be truly objective.
That’s where technology and artificial intelligence step in. Here are some of the ways AI can help us beat our biases.
1. Grading Our Job Advertisements. The labor market is tight, so writing the perfect job ad is more important than ever. But could the job descriptions you write be driving potential candidates away? Gender-coded language in job adverts could be deterring qualified candidates from applying to your company. Some recruiters are using AI-augmented writing systems to curtail this problem and improve their job ad’s performance.
Textio uses linguistic data and predictive analytics. It analyzes language patterns to understand why some job descriptions do well, some don’t, and why some attract only certain genders. While writing the ad, Textio recommends alternative phrasing and warns you if a word or phrase could dissuade candidates. It then gives your description an overall score; the higher, the better. Many large companies are beginning to use this service to create higher-performing job ads that bring in talent of all sorts.
2. Skipping to the Good Stuff in Resumes. A person’s resume says a lot about them; some argue, in fact, that resumes say a bit too much. Studies show that people with names that read as “non-white” are less likely to get called for an interview. People make assumptions about the candidate’s sex, socioeconomic background, and age based on the identifying information presented in a standard resume. This provides several avenues for biased hiring, conscious or unconscious.
Artificial intelligence streamlines the resume screening process and reduces bias by scanning resumes for relevant skills and experience. Ideal’s AI looks for candidates that have the proper credentials without ever glancing at where they live or attempting to determine how old they are. This ensures that all qualified candidates make it through to the interview process without recruiters or hiring managers unintentionally making biased decisions.
3. Impartial Interviewing. Interviewing candidates can be a minefield: the halo effect, confirmation bias, nonverbal bias, and more can all influence the outcome of an interview. Some companies are avoiding this by using chatbots to conduct preliminary interviews with candidates.
TalkyJobs, for example, uses an AI to ask candidates questions that would be covered in an early interview. It focuses solely on skills, qualifications, experience, and personality. The AI never asks for data regarding race, gender, or any other extraneous information. It analyzes the answers based on the employer’s candidate profile and flags those that should move on to a more in-depth interview.
AI won’t fix all our problems, and there is still a long way to go in perfecting this technology. Amazon recently shut down an AI recruiting tool it built because it began to discriminate against women. Developers need to be careful with the data on which they build artificial intelligence systems; otherwise, they may accidentally create an AI with its own unconscious biases.
But as technology advances, it becomes clear that these systems could change hiring and work as we know it. It only seems right that we utilize these new programs to not only streamline hiring, but to ensure that great people get great jobs – no matter who they are.
Just as companies and nonprofit organizations are increasingly concerned with creating diverse teams, so are the Boards of Directors that govern these organizations. In my work as an executive recruiter in the nonprofit sector, I frequently partner with boards who are hiring their next CEO. As it should, diversity usually comes up as a desired priority for the CEO search. But boards rarely look inward, and acknowledge their own lack of diversity, much less take steps to change it.
Studies show that board diversity has barely changed in the last two decades. BoardSource, which conducts the nation’s largest surveys of boards, shows that almost 27% of nonprofit boards do not include a single person of color, a number that hasn’t changed in the last two years. A recent survey my own firm, Koya Leadership Partners, conducted on board demographics at 100+ nonprofits around the country, revealed a serious disconnect between intent and action when it comes to board diversity. While 96% of respondents reported that diversity is a critical strategic priority, only 24% have actually taken steps to increase diversity.
Boards understand the importance of diversity and want to do something to increase it. But time and time again, our interviews showed, they do not take action. In most cases, this is simply because they do not know what to do. Like many managers and HR leaders who have been tasked with diversifying their teams and organizations, boards of directors lack the skills and knowledge needed to significantly move the needle on diversity.
Culture plays a big role in any organization’s ability to attract and retain a diverse workforce. Changing workplace culture requires buy-in and collaboration across the entire organization. But the truth is that there are some basic steps that any leader, whether a board director or a team manager, can take to start building a more diverse team.
The first is to stop hiring by first-degree networking. When you fill a role by asking the people that you know who they know, you are almost certain to hire someone who is like you. Sociologists know that individuals are highly likely to be connected to people who reflect them in terms of race, culture, and socioeconomic status. So if diversity is your goal, tapping your networks may not net the results you seek.
Instead, develop a diversity-focused recruiting strategy that goes beyond the people you know. You can do this by posting opportunities broadly (including leveraging LinkedIn), purposefully tapping the networks of wider range of staff members (you can make this easy for people by sending out an email with a job description that people can simply forward to their own networks), and being intentional about building diversity into your outreach.
Don’t be afraid to let people know that you are specifically seeking to build a diverse pipeline of candidates. Instead of saying, “I’m looking for an amazing product manager, let me know if you know anyone,” say “I’m hiring for a new product manager and am especially interested in building a pipeline of diverse candidates. Is there anyone you might recommend I reach out to?”
Another strategy that I encourage all boards and hiring managers to consider comes straight from the NFL: The Rooney Rule, which requires that teams interview at least one candidate of color before making any senior coaching hires. Developed in 2003 and named after the league’s former diversity committee chairman, Dan Rooney, the guideline has since been adopted by a number of corporations and nonprofits and can be extended easily to any hiring or appointment process. It can be a simple way to set goals and create accountability for building diversity into the hiring process.
Whether you’re on a board of directors of a local nonprofit or a corporate team leader, the simple steps outlined above will help you begin immediately building diversity into your recruiting process.
As we’ve seen for the last decade or more, the world of work is rapidly changing. In 2019, technology will continue to help HR and recruiting meet business and employee needs with evolution in four critical areas.
Increasing Use of Artificial Intelligence
It’s increasingly difficult for today’s employers to find talent. As the effectiveness of job boards decreases, employers must focus on the entire attraction process. As career experts interviewed by Forbes indicate, AI is quickly becoming an essential element in successful recruiting strategies. AI empowers recruiters to conduct targeted candidate marketing to gain access to the types of applicants the company needs. Data-driven platforms such as Talroo, Smashfly and my company’s Global Search and Match technology help fully integrate the power of AI into applicant tracking systems (ATS).
The use of AI will continue to expand as companies look to improve decision-making, reinvent work processes, and revolutionize the candidate and employee experience. AI will pull employee skills from a candidate’s online resume when they apply for a job. Additionally, it will have an increased role in informing businesses about employees’ ongoing skill development. With an AI-powered smart network, organizations can efficiently identify internal talent and assign project support based on employee skills.
Improving Role Fit with Video Screening
More and more organizations are turning to AI-enhanced video screening to make it easier to assess candidates. Video allows candidates to interview on their own time and recruiters to review as time permits. In addition, video screening will continue to develop with the use of facial recognition and natural language processing to automatically rank candidates’ answers, as well as indicate their soft skills and ultimate fit for the role.
Embracing Human-centric Technology
As more companies embrace flexible work environments and recruit more remote workers, HR departments will need to adopt new methods to present company information. With smart workspaces, companies will rely even more on collaborative technologies and software so that employees can work together regardless of location. Backed by the power of AI, recruiters can use internal talent pools to identify hot talent within the organization or to reconnect with candidates from previous searches. This personalization and appreciation for an individual’s unique skills offer a powerful way to increase engagement and interest with the organization. In 2019 and beyond, HR professionals will be able to use these human-centric technologies to customize the work experience without replacing the human element.
Harnessing the Power of Analytics
The amount of big data available to organizations has led to the opportunity for more in-depth data analysis. Organizations will be able to better assess everything from employee performance to leadership effectiveness to discrepancies. As smaller companies adopt technology solutions to improve efficiencies, the use of data analytics will become standard. Gamified analytics dashboards, which are configured based on best practices, can help small business make informed decisions.
If they aren’t doing so already, organizations should use talent information to inform their strategy with the following types of data:
To meet ever-changing business needs with a strong talent strategy, CHROs need to prepare for how these changes in AI, video screening, human-centric technology, and analytics will impact the world of HR and recruiting in 2019.
Last month, I encouraged you to reflect on your year. I encouraged you to take stock of what you were grateful for, acknowledge your accomplishments, identify your key learnings, and think about what you need to accomplish next. I also asked you to consider if there was anything you were avoiding.
Is there something that you know deep down that you need to address?
As we begin the year, perhaps it is time to take a leap of faith! In many ways, we all have a clean slate starting in the New Year. What a great time to reset priorities, launch new business strategies and implement tactical actions to achieve your goals. It is also a great time to take a risk and do the one thing you’ve been putting off.
As leaders this could include: Replacing a member of your leadership team who is underperforming; investing in a new business line that shows promise or making an acquisition; refocusing the organization on a business mix that is more profitable even though your team may not have all the skills necessary to deliver; having that courageous conversation with a stakeholder you have been avoiding; exiting a client that no longer fits your ideal client profile; committing to a challenging employee engagement goal.
Ask yourself: What will I gain (if anything) by procrastinating further? What are the benefits of taking action? How much risk is associated with this action and what can I do to mitigate this risk? What are my options on how do I proceed? Do I need to involve other colleagues and what other resources do I need to move forward?
By preparing in advance, taking the leap will not feel so scary and you will be better able to follow through.
As you begin this new calendar year – trust yourself! Go boldly forward and take on those few items you have been avoiding. Make the commitment to lead by example and do the hard work. Others will notice and consider what they too need to risk to advance their goals.
Read more of my thoughts on leadership here.