“Are you creating value?”

The first person who needs to answer this question in every staffing organization is the owner operator.  Here are some related questions:

• Is your staffing firm producing value in the marketplace?
• More specifically, are you creating value for your clients?
• Can you define what that value is and is it measurable?

By its nature a business is an economic entity and is sustained only as long as it makes economic sense to itself and its client-base.

Create value to reverse falling margins and other negative staffing industry trends

Over the last 20 years, one of the most significant trends in the staffing industry has been the shift from being a small supplemental workforce agent to being embraced as a key component to businesses’ workforce strategy.  The fallout is the relegation of staffing to procurement due to the increased spend in dollars each year.  Many of our clients who use our staffing software deal with procurement people in contract renewal or bid processes.  They have discovered that the primary goal of the typical procurement professional is to diminish the true value of the staffing service so they can achieve the lowest per unit cost.

It’s nothing new but this complaint of many staffing operators is still fresh: my peers and competitors are not helping the situation by low balling contracts and further diminishing the perceived value of the staffing product.  Therefore, making the economics of doing business even more challenging.

A number of staffing firms have successfully pushed back against these staffing industry trends by moving up the value chain in their clients’ organizations.  Often these firms have focused on niche markets and developed a level of expertise elevating them above the procurement office into the operational areas of the firm where managers are interested in outcomes such as performance and production product quality.  As these staffing operators do the hard work to be embedded as a value-added solution into their clients’ business processes they achieve such profitable results as:

• Better margins
• Consulting fees
• Long term relationships
• Barriers to competition

Email me to share ways you’ve fought falling margins by adding value to your staffing services?

Contact us to discuss how we’ve helped staffing companies improve their margins and move up the value-chain in their clients’ organizations with our staffing software.

Dave Reiss
Founder and CEO
Applied Systems Technology
845-534-7100 X1102
dave@astusa.com
Connect with me on:

• Linkedin: http://www.linkedin.com/pub/dave-reiss/4/37b/218
• Twitter: http://twitter.com/dave_ast

The most simple and disarming answer that people receive regarding the stock market is buy low and sell high. If we were all prophets and could foretell the future, we would all be putting a lot of money into the market. Sometimes opportunities like these are staring us in the face even when we do not realize it. Many executives in the temporary staffing industry have gone through substantial cost cutting measures to survive the severe economic downturn. Going hand-in-hand with dropping revenue, slashing operating expenses has been one of the leading trends in the staffing industry. In essence, many of you have achieved a low cost of operating the business – you have achieved a low entry point to be doing business at this time in the life of the company.

Leveraging undervalued stock - a simple strategy for the temporary staffing industry.

What if you could leverage that cost against growing revenues similar to the way an investor leverages an undervalued stock against future growth?

Building on this strategy, you want to build an operating model that keeps your operating costs to a minimum during an uptick in the economy and your business. This might seem obvious, but in reality it takes good planning and execution to implement this type of strategy. Few staffing operators spend the necessary time on process improvement during down times for improved operating ratios when the temporary staffing industry trends up. Operators were willing to use older inefficient models because profit margins and economic “V-shaped” rebound hid the waste. This recovery is looking very different then past downturns – more “L-shaped” than “V-shaped”.

This will mean that staffing operators will have to find profits in places that they historically ignored. Margins will be as tight as ever… maybe even tighter forcing executives to recalibrate their business finding more and more profit dollars below the line.

What the Temporary Staffing Industry Can Learn from the Manufacturing Industry?

Manufacturing companies have used automation to increase the output per worker by 300 times over the past 30 years. The independent staffing operator needs to embrace similar types of process reengineering strategies to move from financially surviving to thriving. This means whole new levels of operational discipline and efficiency to achieve high levels of productivity – imagine the rewards if this became the staffing industry’s #1 trend!

The challenge for every operator will be to buy the cost of operations low and sell/leverage that low cost of operation at acceptable sales prices in the marketplace.

Contact us if you want help identifying areas of inefficiency that could be improved to achieve a scalable low cost of operation.

Dave Reiss
Founder and CEO
Applied Systems Technology
845-534-7100 X1102
dave@astusa.com
Connect with me on:

• Linkedin: http://www.linkedin.com/pub/dave-reiss/4/37b/218
  
• Twitter: http://twitter.com/dave_ast

 

A few weeks ago many of you participated in the blog/survey on how you’d characterize your staffing company’s culture in my post What the Town Dump Teaches the Staffing Industry About Culture.

I recently finished crunching the statistics and seeing if there are any interesting staffing industry trends to report on.  18 people responded to the corporate culture survey. Here are the results and my “mad thoughts”:

• Two most common characteristics were Client Centric and Collaborative:  72 % percent of the respondents described their culture with these qualities.  For many staffing companies the business of order fulfillment is a team sport with staffers collaborating often in a bullpen environment – exchanging as much information dynamically as possible.
• Next two most popular characteristics were Efficient and Self-improving: 61 % described themselves this way.  Initially we were a little surprised many of you chose efficient probably because most staffing companies are running very lean at this time based on the financial stress caused by the economy over the past two years.  The caution we would put out there is to scrutinize internal processes so that the organization can sustain or improve efficiencies as the economy improves.  Challenging economic times help identify and weed out complacent behavior while good times often hide inefficiencies; check out Junk Your Staffing Agency’s Clunkers – Start a New Staffing Industry Trend!
• Competitive, nurturing, and innovative were identified by 55% of the respondents.  It is significant to note that only about one half of the respondents described their cultures as competitive.  The readers of Mad Staffing might want to take this as a marker to stop and evaluate their own organization to see how they fit into this category since it is one of the key organizational drivers that affects growth.  What is also interesting is that 6 of the respondents characterized their cultures as both competitive and nurturing which would indicate that these two qualities are not incompatible in the same company.
• 44% of you identified with High Performing and Creative:  It is not surprising that they would come in very close to the categories of innovative and competitive.  It is noteworthy that in all instances except for one, high performing accompanied competitive.  I would hope that this would further encourage the readers of AST’s Mad Staffing blog to evaluate the competitive nature of their organizations.
• 33% of you classified your organizations as Disciplined and Frugal:  The low percentage on discipline did not surprise us.  Our observations have been that the majority of staffing organizations are not heavily process oriented.  In less stressful economic times, staffing companies have been able to make decent to very good profits largely on entrepreneurial efforts and management.   Mad Staffing believes that a significant opportunity for financial growth will be achieved by embracing process improvement – in essence stream lining and automating processes to free-up human capital for more value added client-focused work.  Staffing organizations moving in this direction will have to embrace a more disciplined approach to operations.  Staffing companies will have to attack the below the line expenses, the largest being human capital to make up for margin pressure which is probably going to be around for a long time.
• The last four categories were Critical at 22%, Wasteful at 11%, and Frustrating and Paralyzed at 5%.  A few observations regarding these numbers:  First, we are happy to see that according to these statistics, most of the people in the industry seem to be relatively positive with only a few feeling that they are working in paralyzed and frustrating environments.  The one anomaly that we would like to investigate further is the discrepancy between the number of organizations that would not describe themselves as disciplined and frugal (which is fairly high at almost 70%) and the number that would describe themselves as wasteful (which is only 11%).  One possible explanation is that a non-process oriented businesses. which often characterizes a staffing firm, compared with a manufacturing company, would not necessarily consider a lack of discipline wasteful.

Feel free to email dave@astusa.com to let me know what you think of the trends, my analysis, and what your explanations and thoughts are about these staffing industry statistics. 

Also, contact us if you are interested in talking to us about ways we can help you save and make money with technology after 25 years of developing and implementing staffing software systems.

Dave Reiss
CEO and Founder
Applied Systems Technology 

Don’t forget to connect with me on:

• Linkedin: http://www.linkedin.com/pub/dave-reiss/4/37b/218
• Twitter: http://twitter.com/appliedsystech 

Here are the news sources that I’m currently pulling from:

• United States Department of Labor
• U.S. Bureau of Labor Statistics
• NY Times
• The Wall Street Journal
• CareerBuilder’s The Hiring Site
• The Washington Post
• The L.A. Times
• American Staffing Association

If you use Google Reader or someother RSS subscription service, here is the Staffing Industry Employment/Unemployment News RSS feed.  Or you can just bookmark Mad Staffing Blog’s Staffing Industry Employment/Unemployment News page.

Email me ev@astusa.com to let me know if there are some other employment/unemployment news sources that you think I should try to tap into.  Also, email me some other staffing industry news feeds you’d like me to make and I’d be happy to accomodate!

Much to the dismay of your cardiologist, I’m going to say it right now – eggs are really good for you and all the stuff about high colesterol is a bunch of bunk! Eggs are the perfect food, which is why you should only hope that your staffing firm becomes as efficient and elegantly designed as an egg.

Start a new staffing industry trend and make your staffing firm like an egg!

Here’s how your staffing company can be like egg salad (without the mayo):

• High output with minimal waste: an egg only has 75 calories with 5 grams of fat and yet it has an enormous amount of protein with 13 essential vitamins and minerals (don’t you wish most of your service coordinators were like that). All kidding aside, if that was your staffing company you’d be looking at a lot of operational muscle and output with little waste and almost no fat.
• Eggs have a lot of lutein in them: Lutein who? Lutein is good for the artieries. One egg has more lutien than a big serving of vegetables and tastes a heck of lot better. Let’s face it – eggs have a lot of appeal, certainly more than brussels sprouts. If you’re in the light industrial side of the staffing industry, what do you think your clients down at the warehouse would rather have: brussels sprouts or some hearty egg salad?
• Eggs have a great RE Factor: What’s “RE Factor“? It’s Mad Staffing’s way of saying Return on Employee. In the egg world, the equivalent would be the fat to protein ratio. For your staffing firm, you want to concentrate on your RE Factor because that’s where tons of money will flow from as your staffing business grows. In the ideal staffing model, just like in the ideal food, you want to get rid of that fat and keep it off. This is where compounding wealth creation comes from – get your operating ratio in the ideal range and keep it there.

When a 10 million dollar staffing firm picks up a measily 1/2 of a precent in net profit it equates to 15% growth in sales.

Who wouldn’t die for 15% growth in this economy?
_____________________________________

• Linkedin: http://www.linkedin.com/pub/dave-reiss/4/37b/218
• Twitter: appliedsystech
• Email: dave@astusa.com

Recently went to Hudson Street Cafe, one of my favorite breakfast haunts, to treat myself to Donna’s oat bran pancakes with REAL maple syrup. Donna owns the café and creates all the incredible recipes and dishes; checkout their website: http://www.hudsonstreetcafe.com/. As I placed my order with the attentive waitress, this guy named Klaus at the next table broke into my space, affirming what I already knew – my bent for healthy eating. Maybe it was the oat bran pancakes or the poached eggs that triggered his comments, but regardless, my peaceful breakfast was quickly hijacked as Klaus then proceeded to go ‘Oprah’ on me sharing all the ‘miracle working, get rid of your aches and pains, lose 30 lbs in a week, gain untold vitality’ hope and benefits of the acai berry, a palm fruit cultivated for its widely touted health benefits. Yup, you guessed it, Klaus was a distributor and I could become one too!

What can the acai berry do for your staffing firm?

Klaus actually was a nice guy and seemed to believe in the little berry and its miracle working cures. I held off on placing an order, since a case of four bottles of MonaVie juice pulls about $130 a month out of pocket; I could probably lease a Kia for that much! But Klaus and the berry got my attention and I figured there are some things that we could all learn from the acai berry and its tempting promises:

• Lesson # 1: Be suspicious of anything that looks like a quick fix to your staffing business issues, no matter how popular the broader business or staffing industry trend may be. Big improvements take big deliberative changes implemented in smaller manageable steps.
• Lesson # 2: Hope is important, we need it. Hope is what gets us out of bed, it motivates us. It becomes sustained if it puts us on a path of believing that our problems can be solved; it puts us on a path of discovery. And if it is the right path, it will yield even more reason for hope, which you should generously share with your salespeople and staffing professionals.
• Lesson # 3: Fad diets and fad foods do not sustain change. They do not bring about substantial long term results, but we do need to get rid of and keep the fat off.
• Lesson # 4: When the fat goes, vitality and energy show up. Our resources are precious – the right amount of cash, the right amount of employees, the best and most efficient processes and tools within and outside of your staffing software are all important. The top performing staffing operators create vitality and energy in your staffing company and in the marketplace by carefully managing these four key ingredients in your organizational recipe.
• Lesson # 5: Google anything or anyone you’re suspicious of. This was initially a joke, but actually is a good habit to get into; when I got home and googled “acai berry,” Google showed me that “acai berry scams” was a popular search term, which yielded many results including this article on CNNhealth.com, Group challenges acai berry weight-loss claims.

Check out these two websites devoted to popular scams and fads: http://www.popularscams.com/ and http://www.crazyfads.com/.

And contact us about how we can help you develop the most efficient processes and fit staffing business with your staffing software and technology.

Dave Reiss
CEO and Founder
Applied Systems Technology
Don’t forget to connect with me on:

• Linkedin: http://www.linkedin.com/pub/dave-reiss/4/37b/218
• Twitter: appliedsystech
• Email: dave@astusa.com

A not-so-fuel-efficient clunker replacement!

• Trying to fill orders for clients who don’t give a crap about you. This belongs on the top of the list. Check out this post on segmentation strategies and how they save time and money, How Your Staffing Agency Can Divide and Conquer to Win the Margin Battle. 
• Trying to fill orders for clients who care about you, but not enough to give you profitable business (Yeah, I’ve heard that they cover your overhead – forgetaboutit, drop ‘em).
• Getting into long phone conversations when an e-mail will do. Or slaving over a tedious email when a quick phone call would clear up everything.
• Not having automated ways for clients and employees to get answers to the repetitive questions they ask, which takes up everyone’s time to answer; and you can never answer fast enough.
• Manually attaching timeslips to invoices – check with your staffing software vendor to see if they have this capability.
• Making sales calls to unqualified prospects that are not using staffing and never will.
• Here is a big one – hiring the wrong person for a position – especially in sales because it takes months to find out you’ve got a dud.

What additional clunkers do you see topping the list of staffing industry trends?  Add them to the list by commenting on this blog – we’d love to hear from you!

AST, which has been providing fully integrated staffing software solutions to the staffing industry for 25 years, has launched a new blog called Mad Staffing. The primary contributor to the blog will be Dave Reiss, AST’s CEO, along with guest posts from other industry experts.  Mad Staffing will be updated weekly with simple ideas on how to get staffing agencies moving with the best tools (e.g. web 2.0 tactics, staffing agency software, and a variety of other applications) and practices in light of the most recent staffing industry trends.

Cornwall, NY January 5, 2009 – Applied Systems Technology (AST), provider of fully integrated staffing software to staffing agencies for over 25 years, has launched a new blog called Mad Staffing.  AST’s Founder and CEO, Dave Reiss, is the primary contributor to the blog and describes it as “an idea exchange where we get to air elegantly simple ideas on how to get our staffing companies moving with the best tools and practices.”   Through the Mad Staffing blog, Reiss – who has 35 years of experience selling & implementing staffing agency software, and consulting executives in the deployment and management of technology – is looking to help staffing agencies focus on the disciplines and activities required to get the highest ROI out of various technologies from staffing software to web 2.0 tools.

When asked who should be reading this blog, Reiss replied, “If you’re a staffing professional – who seriously wants to advance your staffing business, stay on top of the latest staffing industry trends, and have a little fun while doing it – we’d love for you to engage with us on a regular basis by reading, commenting, contributing and helping further develop the ideas that we’re putting out there.”

Reiss went onto explain the timeliness of the Mad Staffing Blog for staffing executives and professionals, “After one of the industry’s most difficult years, every staffing company is trying to figure out how to do more with less.  This is AST’s entire focus – how to help staffing agencies use technology to make and save more money.  Whether we do this by helping implement a fully integrated staffing software solution or by offering some useful information on our website on how a staffing business can better take advantage of their current technology – we’re still accomplishing our mission.”

You can find the Mad Staffing Blog at http://www.astusa.com/staffing-blog/.  AST’s CEO and Mad Staffing contributor, Dave Reiss promises “at least one idea per week that will be light, entertaining, and guaranteed to put money in your staffing agency’s checking account.”

About Applied Systems Technology (AST):
Applied Systems Technology provides fully integrated staffing agency software to mid market staffing agencies throughout the United States. Its unique ‘outcomes’ approach to automation starts with helping senior management align the projects around very specific measureable goals relating to the operations of their business. By fusing their business processes to automated tools, the client companies are able to grow their businesses with significantly improved operating ratios. The ability to script business rules around desired outcomes in the staffing software itself provides staffing operators significantly greater control over the business.