Engaged Workforce

The State of Staffing Services

New research reveals how HR execs are using staffing outsourcing and how providers can still improve.

By Larry Basinait

From background checking to skills assessment, a solid staffing provider can make a huge difference to companies looking to improve or expand their workforce. But which staffing services do organizations consider the most valuable? How are these resources being used strategically? And how far of a reach does the typical contract cover? Until recently, research on the subject was limited, but now, HRO Today has begun to answer these questions.

HRO Today conducted a Baker’s Dozen satisfaction survey for staffing services providers for the first time in 2017. The survey was conducted among HR executives who use staffing providers. Study respondents were selected from HRO Today’s subscriber lists and staffing providers also supplied participants, though all responses were confidential. Each of these respondents provided unbiased information and insights into their use of outsourced services and their satisfaction with their current and/or past service providers. In total, there were 80 respondents. Although that sample was insufficient to publish a complete Baker’s Dozen ranking, many conclusions can be drawn from it about the staffing services industry. Here are the top seven trends.

1. Organizations only use a fraction of the staffing services that providers offer. On average, clients contracted only 3.5 services from their staffing provider, and eight of the services examined were used by less than 10 percent of respondents. In comparison, the average amount among 2016 Baker’s Dozen surveys was 8.5 services. No single service is used by even one-half of survey respondents. The most commonly used service provided by staffing companies is background checking, which is used by 45 percent of study participants.

2. Staffing outsourcing is considered a commodity. There is a high incidence of short-term staffing contracts which, when combined with a limited number of services being used, suggests the provider-client relationship is not entrenched.

3. There is room for contract expansion in the staffing services field. Compared to findings from the 2016 Baker’s Dozen for managed service programs (MSP), about 10 percent fewer staffing clients reported renegotiating their contract but a similar percent reported expanding services. A greater proportion of renegotiated contracts coupled with higher service utilization could strengthen the client-provider relationship.

4. Staffing services contracts are regional only. The vast majority (86 percent) engage their staffing provider on a regional basis as opposed to global, below that of MSP contracts.

5. Nearly six in 10 staffing services contracts do not cover all divisions of client companies. Staffing providers are far less inclined than MSP providers to have contracts that cover all divisions of a company, where only three in 10 contracts do not include all divisions.

6. Staffing providers are not viewed as strategic partners. Only a small percentage (18 percent) of respondents indicated their staffing provider delivered strategic HR planning and HR corporate strategic support.

7. Client satisfaction is good, but lags behind other outsourced services. The overall average satisfactions score on a scale of one to five is 4.12—that’s below the 2016 MSP average of 4.31. Two of lowest rated items pertain to adding enhancements to their staffing services program, which will make harder for providers to expand contracts.

Detailed Findings

Breadth of service/service utilization.
Study participants were shown a diverse list of 21 different services staffing providers can offer, and were asked to indicate the services their staffing provider outsources to them. The services provided vary greatly, as no service was used by more than one-half of respondents.

The most commonly used service provided by staffing companies is background checking, which is used by 45 percent of study participants. Drug screening, skills assessment, In-house requisition fulfillment capability, and workforce planning are all used by at least one-quarter of client respondents. On average, clients contracted 3.5 services from their staffing provider, and eight of the services examined were used by less than 10 percent of respondents.

In comparison, the average amount among 2016 Baker’s Dozen surveys was 8.5 services. This low number suggests clients often do not take full advantage of all the capabilities staffing providers have. See Figure 1 for the top services.

Size of deals.
Respondents also selected the range containing the number of workers covered by their staffing services program. Nearly three-quarters of staffing services programs are for less than 2,000 workers (see Figure 2). But the average of 8,038 workers suggests a great deal of variance in deal size. The proportion of those deals under 2,000 is comparable to historic norms for MSP outsourcing.

Contract structure. Study participants were asked to indicate the contract structure they have with their staffing provider. Less than one-half (49 percent) of contracts are multi-year contracts, with project-based and single-year contracts equally spilt in the remaining half. This contrasts with MSP contracts, of which 80 percent are multi-year (see Figure 3).

The high incidence of short-term staffing contracts combined with a limited number of services typically being used by clients suggests that staffing outsourcing is often considered a commodity.

Contract renewal opportunities. Respondents were asked if they’d had the opportunity to renew their contracts. Among those that have, just over two-thirds (68 percent) have renewed their contract with their provider more than one time (see Figure 4). So while contracts are typically not long term, their renewal rate is fairly high and comparable to MSP contracts.

Contract renewal intention. Survey respondents were asked about the extent of their agreement with the following statement: “My company is likely to renew its contract with this provider at the next renewal opportunity.” More than eight in 10 (81 percent) agreed they were likely to renew their contract at the next opportunity, which is also consistent with MSP results (see Figure 5). This high percentage shows that despite short contracts and low service utilization, clients feel loyal to their staffing providers. Basic expectations are consistently met.

Contract expansion. The incidence of contract expansion not only shows how often the scope of services increases, but also reflects satisfaction with both the account and how well a provider extends their offerings into their client base. While one-half (50 percent) of respondents indicated that their company renegotiated the scope of services under the terms of contract with their provider, nearly three-quarters (73 percent) of those renegotiating the contract expanded the scope of services with their provider. Compared to findings from the 2016 Baker’s Dozen MSP, about 10 percent fewer staffing clients reported renegotiating their contract but a similar percent reported expanding services. So overall, there is room for contract expansion in the staffing field.

Global versus regional engagement. Respondents were asked if they currently engage staffing services globally or regionally. The vast majority (86 percent) engage their staffing provider on a regional basis. While not completely dissimilar from MSP provider engagement, 10 percent fewer staffing services are global in scope. Staffing services are very much viewed as having a regional scope as opposed to a global one. Why? Forty percent of respondents report they haven’t really considered it. That’s twice the rate among MSP clients and may represent an opportunity for staffing companies.

Provides services to all divisions. Study participants were asked if their provider provided services to all divisions of their company. Less than one-half (42 percent) indicated that they did. Staffing providers are far less inclined to provide services to all divisions than other outsourced providers, such as MSPs, which do so 71 percent of the time. There may be opportunity for staffing providers to expand their reach into existing clients.

Strategic HR planning and HR corporate strategic support. Respondents were asked if their provider delivered strategic HR planning and HR corporate strategic support to their executive committee.

Only a small percentage (18 percent) of clients indicated their staffing provider delivered strategic HR planning and HR corporate strategic support. Clients aren’t viewing staffing provides as source of strategic support for HR planning.

Quality of service. Study participants were asked to rate their satisfaction for each area with a series of statements. The overall average satisfaction score on a scale of one to five is 4.12. That’s lower than the 2016 MSP average of 4.31. The metrics that gauge broader overall feelings about the provider have higher average scores than those that address more specific aspects of the relationship. “Based on my experience, I would recommend this provider” was the element with the highest average score, rated as 4.25 (see Figure 6). A stable and consistent team also had a high average score, and that’s traditionally an area many outsourcing providers struggle with.

Two of the three lowest-rated items pertain to adding enhancements to their staffing services program.

“My company received good value for the money we spend on this provider” is also low on the satisfaction list. Satisfaction with the value received is essential if contracts are going to be expanded.

There are five areas where staffing provider’s satisfaction is significantly lower that of MSP providers, and all of these areas of particularly important when evaluating a provider:

• The team assigned to my account does a very good job providing a solution.

• This provider honors their commitments

• My company received good value for the money we spend on this provider.

• I trust the executive this provider assigned to my account.

• This provider responds well to criticism and makes changes to improve problem areas

 

For All Staffing Needs

Listed in alphabetical order, below is a roundup of providers that deliver staffing
services.

ACS Group (American CyberSystems)

Act•1 Group

Adecco Staffing US

Advantage Resourcing

Allegis Global Solutions

AMN Healthcare Inc.

CDI Corporation

CHG Healthcare Services

Collabera

Cross Country Healthcare

Elwood Staffing

EmployBridge Holding Co.

Express Employment Professionals

Impellam North America

Specialist Staffing brands

(Bartech, Corestaff, s.com, SRG Woolf)

Insight Global

Integrity Staffing Solutions

Jackson Healthcare

Kelly Services

Kforce Inc.

ManpowerGroup

Maxim Healthcare Services

Nesco Resource

On Assignment Inc.

Randstad North America

Randstad nv

Recruit

RGP (Resources Connection)

Robert Half

System One

TrueBlue (PeopleScout & Staff Management | SMX)

Volt Information Sciences

Yoh

 

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