staffing industry challenges

8/3/2019 Staffing Industry Challenges

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P O W E R E D B Y IN T E L L E C T

D R IV E N B Y V A L U E S

Build ing IIIIIIITomo rrow 's En te rp ris e

V iew Point

S ta ffing Industry

Challenges & Solution

AbstractThe staffing industry today works in an exceedingly dynamic business environment,

perhaps the most transformational the industry has seen in the 50 years of its

evolution. It no longer functions solely in the capacity of replacing absentee workers

with temporary ones, but has slowly emerged as a strategic partner for its clients by

providing an entire gamut of employment solutions and services.

The staffing industry has seen a huge swing towards recruiting professionals from

varied streams such as Finance, Sales, Engineering, Information Technology, and

Management While this trend provides myriad opportunities for growth, it has also

bought a set of unique challenges with it. Hence the growth challenges are Customer

Retention & : Serving new industries, Applicant loyalty, soaring operational cost due

to disintegrated systems in usage, high percentage ofmanual effort involved in the

process of matching the right people with the right job there by prohibiting a quick

response to the customer for an order & : integration of the business processes across

geographies. These challenges needs to be addressed by a Go-To-Market solution that

provides a realtime visibility into opportunities and resources, finding, bringing

and retaining the best talent across the globe, managing clients, applicants & : orders

from a single source, fully integrated to manage both the front office and back offices

seamlessly and inculcates the best industry practices so as to deliver the high quality

service thereby adding more value to the customers while reducing the costs and

maximizing profitability

Mar 2010



Introduction

Staffing Management provides the all essential strategies, tactics and processes for identifying, sourcing, recruiting and

retaining the human resources needed to support all business activities both in the present and the future. It also includes

managing programs that are in compliance with equal employment opportunity laws and regulations, - as well as for

succession planning and organizational exit. In addition, staffing management also includes matters focusing on careers and

communications, legal and regulatory issues, technology and outsourcing, budgeting and metrics, staffing management best

practices and global staffing management issues.

Fragm ented M arket S pace

The global HR services market is very fragmented, but the competitive landscape varies considerably from one country to

another. The three biggest markets - USA & : Canada, Japan and UK & : Ireland - are highly fragmented, with the Japanese

market showing the highest number of staffing companies, followed by UK and the US.

The fragmented market space provides an opportunity for the staffing firms to grow by consolidation particularly in

fragmented markets by strategic acquisitions. Moreover, the consolidation process is accelerating as general staffing

companies seek a stronger foothold in the professional staffing markets in order to achieve a more diversified service range

and access to the more profitable specialist segments.

Deregulat ion

The regulatory framework of labor markets in individual countries is a significant influence on the staffing market size and

growth rates. There is a direct relationship between the regulatory framework of labor markets and staffing market size - more

flexible labor markets lead to higher penetration rates for staffing. UK, one of the most liberal labor markets, also enjoys one

of the highest penetration rates of around 4.5% in temporary staffing. Other countries such as Germany, Spain, Italy and

Japan have all seen an increase in opportunities as a result of labor market liberalization in recent years.

Econom ic environmen t

Demand for HR services is sensitive to changes in the level of economic activity In good times, when GDP expands, demand

for temporary employees increases. In a downturn, companies tend to reduce their quota of temporary employees before

permanent staff, resulting in lower revenues for the staffing business, with a negative impact on profitability and the financial

position.

Given the opacity of the staffing business, it is important that management at country level is aware of economic

developments in order to adapt the cost base to revenue trends. Corporate and regional management need to maintain an

active dialogue so that capacity can be adjusted as and when necessary Close monitoring of monthly results and updated

forecasts ensures a rapid response to business developments.

C lie nt a ttra ctio n a nd re te ntio n

The Staffing firm's business potential and long-term profitability depends on attracting and retaining clients. Client

satisfaction breeds loyalty and leads to consecutive assignments. Failure to provide this is a business risk.

Staffing firms can conduct a global & : local Client Satisfaction Survey with management-defined short-term targets. The

results will help to draw up local sales action plans, support salespeople, and gear the services to client needs. In addition,

staffing firms can also continue to review the delivery models and optimize sales processes.

E xte rn al T ale nt a ttra ctio n a nd re te ntio n

The successes of the Staffing firms depend on their ability to attract and retain external talent who possess the skills and

the experience to meet clients' staffing needs. With talent shortages in certain sectors and intensive competition for skilled

individuals, providing suitably qualified candidates is both a challenge and a risk. The continued success of staffing business

depends in part on the ability of the staffing firm to offer attractive conditions to retain colleagues.

A key to retaining external talent is to offer consecutive assignments and competitive wages. The Global Client Satisfaction

Survey can also address external and internal colleagues while helping the offices around the world to identify their needs.

2 I Infosys - View Point



Staffing firms can continually evaluate and upgrade the supplied pool of qualified people to keep up with changing client

needs and emerging technologies.

N otion and R ea lity th at th e individua l ru les

The rapid rise of a new class of employees comprising essentially ofyoung people with an entirely new set of expectationsand motivations when combined with the talent shortage, has shifted the power from the employer to the individual,

resulting in the retention of talent becoming all the more elusive. This significant role reversal has triggered considerable

changes in the way companies project themselves as employers. While strengthening their brand equity, the companies have

to emerge as an individual centric management rather than a homogenous group management.

IT S olu tio n: T he S tra teg ic T ool

S tre am lin ed P ro cesses

Many staffing companies may still be using Excel spreadsheets and even handwritten notes to manage central processes like

recruiting, prospecting, matching applicants to orders, and billing. Todays staffing industry depends on the speed to find top

talent and filljob orders, using manual processes like these puts the staffing firms at risk for losing clients to the competition.

The Staffing solution automates the time-consuming aspects of staffing office business processes such as client, applicant,

and order management so that the employees of the staffing firm can focus on filling more job orders and better serving

the clients. It also streamlines the pay-to-bill process, improving efficiency and reducing errors so that the staffing firms can

decrease DSO and increase cash flow. As a result, employees are empowered to work more efficiently and effectively to grow

the business.

E ffic ie nt O rde r M ana gement

Manual processes can be challenging for a single-office company Yet, for a company that operates in multiple locations,

manual processes can become overwhelming. This can significantly inhibit the ability to filljob orders quickly and,

ultimately, grow the business.

The Staffing solution provides a single source for managing and viewing your job orders and assignments, thus eliminatingthe need to search through stacks of handwritten job orders and assignments to understand your pipeline or track down a

recruiter to get the status on an order.

F ron t to B ac k In te gra tio n

Disparate systems create multiple versions of information that impede the ability of a staffing firm to manage the business

efficiently Decentralized information prevents your employees from having realtime visibility into available resources, open

orders, and client requests. And it prevents you from having realtime insight into your pipeline, cash flow, and business

trends.

The Staffing solution completely integrates the front and back-office systems to provide a consistent, centralized data source

for clients, applicants, orders, projects, and billing information. Your employees can easily view and share the same data

directly from a Web browser. By connecting employees throughout your organization to a single source of information, youcan dramatically increase efficiencies, reduce errors, and eliminate redundancy

P ow erful Search and M atch C apab ilities

One of the most important tasks for a staffing firm is to find the best resource for a job. Even with an enviable pipeline of

job orders and a top-notch pool of resources, staffing firms may not realize the full potential for profitability unless they

efficiently and effectively match the resource to the job profile.

The Staffing Front Office solution delivers the extensive search and match capabilities that make it easier to find the right

person for any job based on skills, location, availability, and billing rate from a single labor pool. It not only increases the

operational efficiency but also reduces the risk of losing business to competitors'.

Infosys - View Point I 3



S implifie d Wo rk fo rc e M an ag ement

Good recruiting means finding, bringing on board, and retaining the best talent. It means quickly identifying the right person

for a job without paying fees for skills that already exist in the system. The above objective can be achieved scrupulously if

the staffing firms can source across geographic areas.

The staffing solution provides the ability to the staffing firms to manage their pool of employees, subcontractors, and

applicants in a single, centralized repository while minimizing duplicate entries and non-functional information. There by

staffing firms can easily track and update a resource's skills and availability anytime, anywhere to enhance their sourcing

processes.

Sca lab le Arch itec tu re

Large clients are increasingly expecting the staffing solution providers to manage all their staffing and human resource

services needs to achieve greater efficiencies, cost savings, and quality of service. As growth in the staffing industry today is

being driven by new business models like single-source partnering and vendor-onprernise contracts, it becomes essential that

the staffing firms equip themselves to provide their clients with consistent, high-quality service across states, countries, and

continents.

The staffing solution takes you global. It not only provides the staffing firms with international expansion capabilities but also

supports the multinational client operations. It handles multiple currencies, multiple languages, global payroll and billing-

functions, and local employment laws, so that staffing firms can execute on the international staffing objectives effortlessly It

can also scale to support the staffing firm's operations round the world, with employees requiring only a simple Web browser

to access the information they need.

P ro ac tiv e R ela tio nship Managemen t

Each day a staffing firm employee spends on an average about 40% to 60% of their time at administrative tasks such as

reminders and to-do lists. These tasks are no doubt important to manage the client accounts, but they also take the time away

from developing deeper and more meaningful client relationships.

The staffing solution streamlines the client administration process by using delivered templates and empowering clients with

online self-service, thereby allowing the staffing firm employees to spend more time on the development of each client into a

more profitable, long term business partner.

IT-BPO & S aa S S olution for S ta ffing Industry

Staffing firms selects the usage of technology mainly for optimizing costs and gaining strategic outcomes such as enhanced

service delivery, Business process realignment.

On the other hand, staffing companies must balance these desirable outcomes with the challenging consequences of

technology implementation, such as training costs and misalignments between software and strategy that can threaten the

bottom line.

Therefore, staffing firms can leverage the usage of technology in anyone of the following ways depending on their needs to

optimize the cost and gain strategic advantage.

IT-BPO integrated solution For the Staffing Industry Integrated IT-BPO solution for staffing industry extracts the synergy

across IT and BPO that covers front-office, mid-office and back-office to make an impact in areas of revenue generation, cost

reduction and customer satisfaction.

An overview of the synergized IT-BPO integrated solution approach




D l f f e r e n t l a t o r

S p e nd b as ed P ric in g

A c ce le ra te d o n - bo a r din g

D y n a m i c I n fr a st ru c tu r e

M a n a g e m e n t

R o b us t D e li ve ry

m e t h o d o l o g y

C e rt if i e d A d va n t ag e P a rtn e r

K e y Be n e f i t s A p p r o a c h

I n no va ti v e te ch niq ue s t o r e du ce c os t, r e du ce r i s k, a nd a cc ele ra te r e su lt s

D e s c r i p t i o n

o O p er a tio na l e xp en di tu re m o de l

o P ay a s p er u sa ge m o d el s im p l if ie s

c o st m g m t

P ric e m o d ele d o n

s pe nd b as is

o S h o rt e r t im e to V a lu e re a li z at io n

o C a n h elp in f u rth e r r o llo ut s

P re -im p le m e nt ed p ro ce ss

t e m p l a t e s

o R e lia b le & s ec u re s er vic e o p era tio ns b as ed

o n in d us tr y b e st p ra ct ic es / f ra m e wo rk s

o S ta te o f t he a rt t e ch no lo gy in a n o n- d em a nd

m o d e l

E c o no m ie s o f s ca le

& B e tt er t ec hn o lo gy le ve ra ge

o L ow e r u np la n ne d e xp en se s

o A c hie ve e co n om ie s o f s ca le in s iz e/ tim e

d u e t o m u l ti -t e n a nc y

S h a re d s er vic es e xe cu tio n

in te nw e a ve d w ith E R P

l if ec y cl e b e st p ra c ti ce s

0 --, ~----------------~

S t r a t e g y & r oa d m a p g u id a n ce

o I ns ig h ts i nt o u p co m i ng p ro d uc t e n ha n ce m e n ts

o S u p po rt & d e v s e rv ic e s p ro g ra m f or k e y

p r o j e c t s

I nte g ra te d P a rtn e r e co s y st em

a cr o ss a ll t e ch no lo gy la ye rs

S aa S-b ased offering For th e S ta ffing Industry

o S p e n d b a s e d p ri ce e n su re s t h a t C l ie n t

p a ys i n l in e w i th t he s ys te m u s ag e .

o P a y p e r u s e m o d e l a l so p ro v id e s le s se r p e r

s p en d c o st a s t h e s p en d b a se i nc re a se s

o P r e -i m p le m e n t e d o p e ra t io n f lo w s h e lp s

s h o r t e n B u s i n e s s B l u e p r in t i n g

o S e r v ic e m a n a g e m e n t f ra m e w o r k , i n du s tr y

l e a d in g s e c u r it y c e r t il c a ti o n s

o D y n a m i c a n d V i rt u a li ze d I n fr a st ru c tu r e

d r iv i n g o p t i m i z a ti o n i n u t il iz a t io n

o R o b u s t n o n -f u n ct io n a l r e q ui re m e n t s

m a n a g e m e n t p r o ce s s f o r s o l u ti o n

p e r t o r m a n c e

o B e s t i n c la s s E R P s e rv ic e s b e s t p r a c ti ce s

o p t im i z e d t h ro u g h a s h a re d d e li ve r y

s t ru c tu r e a n d a u t om a t io n ( th r u ' B P M a n d

w o r k f l o w )

o G l o b a l a l li a nc e a n d s t ra t e gi c p l an n i ng

o J o in t P r o d u ct a n d S o l u ti o ns D e v e lo p m e n t

p r o g r a m s

o E a r ly a c c e ss t o n e w p r o du c t a n d t ra i ni n g

P r o d u ct b e t a t e s t in g p a r tn e r

Ina SaaS model, the onus of operating, supporting and maintaining applications resides with the SaaSvendor. Hence, there

is no hardware or separate licenses to purchase, no servers to maintain, and no IT staff required to manage it. With SaaSyou

get automatic updates, eliminating upgrade expenses and system down time. SaaScuts those costs, allowing you to focus on

growing your business. This allows companies to realize cost and efficiency benefits. The 'pay-as-you-go' model also provides

companies better visibility into their operating expenses.

Staffing solution integrates the Staffing Front Office, Customer Relationship Management, Human Resource Management,

and the payment and billing processes there by eliminating large up front investment for multiple software applications and

implementation time which can take months to install. As there is minimal up front investment in hardware and software,

capital expenditure is vastly reduced.

Since SaaSeliminates the need to assess hardware through its end-to-end develop-host deliver- operate model, time to market

is reduced significantly. Further, enterprises using SaaS can leverage new best practices, upgrades and releases virtually in realtime.

The following is an overview of the SaaS-based offering with process outsourcing capabilities for Managed Service Providers

in the Staffing Industry

Infosys - View Point I 5



Solution Stack

~ (. W eb based access )S ca la ble m o de l th at m e ets g ro w in g b us in es s E n ha n ce d u s e r

needs expe r ience

• E lim in ate s n ee d to m an ag e m ultip le c os t

s tr uc tu re s a c ro s s t he l if ec y cleP ro c es s O u ts o ur ci n g I

~• B us in es s h ou rs s up po rt

CD

• C o mp re he ns iv e p ro ce ss e xe cu tio n a cro ss-g :

~p la tfo rm , c us to m er s ys te m s, p ro ce ss es a nd

~

• C o nf ig u ra b lecont ro ls

• E x te n sib ler ac le P ro d uc t S u it e• A da pta ble

• B un dle d te ch no lo gy fra me wo rk fo r

o p er at io n al a n d f un c ti on a l e ff ic ie n c y , c u ts

~

le ad tim e to c ha ng eS e cu re a n d S c al ab le • P re -b un dle d In no va tio ns

t ec h no lo g y p la tf or m co a c ro s s t ec h no lo g y e lem e nt s

• F ully c on fig ure d p re -b uilt s olu tio n e nh an ce d CD

~.b y n ic h e t oo ls

m

~

Ma n a g e d • S ca la ble & Secu r ed• Q u ic k a nd c os t e ffe ctiv e d ep lo ym e nt

Inf rast ructure • M u lt i- te n an t




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Build ing IIIIIIITomo rrow 's En te rp ris eIn Jo rm atio n in t his d o cu me nt is updated as o j Feb 20, 2010

mailto:[email protected]

http://www.infosys.com/

http://www.infosys.com/

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staffing industry challenges

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