How to Build a Successful Contract Staffing Practice

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There is a lot of talk about how contract staffing can protect you from the ups and downs of the economy, and how it is counter-cyclical to perm. There is some truth to this statement, but you need to peel back the layers.

It is true that contract staffing can minimize the roller coaster nature of our business. One of the hardest things about being a perm recruiter is that you start every month at zero. The great thing about contract staffing is that it smooths out the peaks and valleys inherent in perm. Think of how great it feels knowing that you have three, five, or 25 contractors out and they are making you money every hour they are working — even when you aren’t.

In addition to the obvious benefit of having a steady revenue stream, contract staffing can help your perm business, too. We all know the feeling of having a very shallow pipeline, when a “purple squirrel” perm requisition comes in from one of your clients. If you have nothing else going on, you are going to jump on it, even if the chance that you can fill it is very slim. On the other hand, if you have a steady revenue stream from your contractors, you can be more selective about the perm requisition you work on, thereby improving your ratios, metrics, and job satisfaction.

As for claims of the “counter-cyclical” nature of contract staffing, the fact is, contract staffing usage rates follow the US GDP line very closely. There is a very strong correlation between the two. Contract staffing does tend to be the canary in the coal mine for changes in the economy — we feel downturns and upticks first, because it is so much easier to engage or disengage with a contractor than it is with a perm employee. 

Whether you’ve decided to build a contract staffing practice to carry you through more turbulent times, to give you real-time insight into market trends, or to open the door to other perm engagements down the line, be sure to follow these three tips: 

Tip #1: Be Proactive

Smart recruiters will take a proactive approach with clients and candidates to let them know consulting/contracting is a viable option. Contract staffing is not something that should only be thought about when perm business is down. The best time to start gearing up for contractors is while the economy is good. After all, it’s critical to proactively nurture candidates in the long-term, not just when clients have an immediate need. This will enable you to readily deploy consultants when there are hiring freezes or when clients simply need additional expertise to supplement their permanent staff.

Tip #2: Move from Partner to Advisor

Emphasize the main reasons companies use contractors, such as flexibility. By speaking with your clients about the advantages of using a contingent workforce, you can move from staffing partner to trusted advisor. While flexibility becomes even more important in times of uncertainty, it’s important not to wait for an economic downturn before introducing the advantages of contract staffing into all your conversations with clients and candidates.

Tip #3: Nurture Your Contractor Relationships

Having quick access to contract candidates is critical. Everything moves quickly in contract staffing. When you are engaged by a client for a perm placement, part of what they are paying you for is the research you will do on the job market, including the insight you provide on compensation packages, available talent, and competitor behavior. In contract, you are getting paid to deliver someone in your inventory, quickly. It is not about who you can find, it is about who you already have. 

There are many ways that contract staffing services can bolster your business, all while benefiting your clients and candidates. It can provide consistency to balance out your monthly peaks and valleys, allow you to be more selective about perm requisitions, and allows you to be a total talent access solutions provider to your clients. Contract Staffing isn’t simply a stop-gap measure. It should be a key part of any talent access strategy or solution.