Is Obama Victory Good For Temporary Staffing?

Way back in the olden days, around 2000, it was clear that a recession was coming when temporary staffing stalled.  In those days, temp staffing was like a canary in a coal mine.  Companies used us as a way to get projects done, and a drop in staffing was a drop in new projects.

Today, the decrease in temp staffing is something a bit more alarming.  In the last 8 years, many companies started using contractors as way to replace permanent staffing and bypass onerous regulations.  Managers got that laying off contractors was a lot easier than laying off employees, and as contractor rates dropped to match employee salaries, the value of being a contractor turned into a less desirable position for candidates, but sometimes the only way to get steady employment.

It varies by city and region, and your corporate lawyer, but there's little doubt that staffing is going through a rough patch, especially in terms of the larger publicly traded firms.

Gregg Dourgarian looks at the recent election results, and says good news is on the way for the staffing industry with the election of Obama. The likely passage of the Employee Free Choice Act, otherwise known as card check, will electrify the working environment.  Basically the EFCA takes away the ability of companies to union bust, and puts it to a simple majority collection of signatures to unionize a business.

There are a lot of questions you should be raising about taking away a secret ballot from workers and forcing companies and union workers into collective bargaining positions, and I've made them clear on other blogs, but I wanted to take a look at Gregg's thesis.

A draconian expansion of FMLA, passage of the Employee Free Choice Act, and strengthened NLRB will be just the start.  Soon it will be easier to hire a $10/hr banker than it will be to fire someone.  All this will drive employers to creative solutions like outsourcing employment. 

Look at France as an example of what's to come - black market employment, little or no 'permanent' hiring, and employment contracts of undetermined length.  Agencies that can get their sales teams to sell solutions that mitigate big-brother employment law will do well.

Basically, Gregg is saying that increased regulation and risk of permanent employment will drive companies to turn to contractors, which means more temp staffing revenue.

I agree.  The expense of having an employee instead of a contractor has been leading us this way for some time.  Contractors qualify for medical benefits, and though they pay more than regular employees and have less stability, the tightening economy means a lot of people have less recourse.

I'm not sure this is such a good thing for temp firms.  More employees brings in more revenue, but margins will be cut. If contractors are essentially payrolled, the value of using a temp staffing lies in the 15-20% markup instead of the 50-60% markup enjoyed by most firms.  Add healthcare costs into that, and all you've done is shift the problems onto the staffing firms, who have the least amount of negotiating power when they're at their biggest.

I'm with Gregg.  I see a short-term benefit as companies seek to avoid the hassles of hiring full time employees by turning to their staffing partners. The headaches of doing so, and the blatant attempt to shift risk to the staffing industry, I think will backfire.  Expect new regulations of contractors and freelancers to impact us heavily in 2010.

The Use Of Assessments In Third Party Recruiting

Margaret Graziano of KeenHire has an interesting point/counterpoint discussion going on over at the Fordyce Letter.  An old bull of the recruiting game said that the best way to recruit is to get on the phone, call the CEO, and close the deal quickly.

Margaret's response is that assessments should be involved in the front end, not as "another step in the process. When integrated into the employment process, there is no bottleneck.

KeenHire was not created to lengthen the sales, recruitment or closing cycle, it was created to arm 3rd party recruiters with better tools to serve their clients with on the front end. When used appropriately behavioral interviewing (KeenView) places the recruiter as an expert in selection. It sews the recruiter into the selection process and eliminates last minute ‘think about its”. Given the process for effective behavioral interviewing begins with benchmarking the role; the recruiter immediately positions themselves in the key strategic conversations that true account development and management are made of, and frankly is allows for more process control across the board.

Keenhire is an assessment provider and training service, and Margaret has been working to show the staffing world how to use assessments to sell and close more (full disclosure: she was a client earlier in the year, but it not currently).

Faking Your Paycheck

Let me start by saying I in no way approve of this, and am only commenting on the site to shine a light on the practice.  In addition to probably being illegal, the company comment spammed my site to get the word out, which I don't approve of.

What's the site?  I won't provide the link, but this site promises to send you W-2 making software that you can use to create your own set of records.  While the site purports to be for entertainment purposes only, the comments I received discuss using the site to trick Human Resources into giving you the salary you want, or tricking the PayDay loan store into giving you more money.

As I said, it's pretty shady - but 55,000 people have already been there.

I see the point - personally, I don't see how it's relevant what you made in your last job, and companies that ask for your W-2 are starting you down the long path of submitting to small injustices to control you.

Like drug tests, credit checks, and filling out applications with the same information as your resume, showing your W-2's is an employment process designed to bring structure to the company's hiring process, all the while reminding you that you are not a special and unique employee.  We don't trust you, or the people who interviewed you, is the message companies send when they ask for a W-2, but considering the statistics on the number of people who lie on their resume, maybe their distrust is warranted.

These scenarios will never happen, but I'd like to suggest two alternatives to creating a fake W-2 for Human Resources.

Fantasy #1:

"Mr/Mrs. HR Manager - I'd be happy to provide you copies of my W-2 records, but to do so, I'll need to see the W-2 records of the last two individuals who held this position in your company.  Seeing as your request to see my personal information is an attempt to verify my statements and make sure you're not overpaying for my work, I think it's only fair to make sure that I'm not being underpaid by accepting this position."

Fantasy #2:

Mr/Mrs/Ms. HR Manager, I'd be happy to provide you with copies of my earnings last year, but on the condition that when you see my records, you agree to pay me a finder's fee of $5,000.  Providing you this information gives you a competitive advantage that you would normally have to pay for.  It seems unreasonable to provide you this information as a condition of employment, seeing as it amounts to me paying the company a bonus for interviewing me.  In addition - the information I provide should also be used as the basis for a salary increase.  A 15% increase over my previous earnings, which you will now know, would make this an equitable trade.

The chances of this happening in an actual job negotiation are slim to none, but this would be what happened if the employee/employer contract was on a more equitable level.  The second scenario is my favorite, because it cuts to the heart of the matter.  If the company doesn't know the proper salary to pay a new employee, and has to check the number against previous earnings, then chances are they're not paying enough.

**and by the way - using past salaries to determine future earnings, when applied to diversity candidates, opens your company up to charges of discrimination.  If an earlier company payed a diversity candidate less than the market rate, your choice as a company to base earnings on their former earnings, can be used to show discrimination on the basis of race, gender, religion....

The Difficulty In Hiring Experienced Recruiters

If you're a Third Party Recruiting Firm looking to expand your recruiting operations in the New Year, chances are you're tempted to go headhunting for an experienced recruiter to round out your team.  You all know my views on salespeople.  They should be calling you.  But a recruiter?  That's someone you need to hunt for.  You want someone with over 5 years of experience, a track record of success in good years and bad, and a solid knowledge of the ins and outs of the St Louis market.

And you liked to pay them no more than $60,000 as a base, with a solid commission plan that will have them earning six figures within two years.

Setting aside the troublesome issue of non-competes signed by these star recruiters, something else is going to trip you up.  You won't get anyone to budge for less than $100,000, guaranteed, for at least one year.

Some of you just choked on your morning coffee, so allow me to elaborate.

Continue reading "The Difficulty In Hiring Experienced Recruiters" »

Starting A New Management Position? What To Watch Out For

Harry Joiner introduced me to Sally McKenzie writes on ECommerce Consulting, and while reading through her blog, I wandered over to Peter Kretzman, who writes CTO/CIO perspectives.

That's the power of mixing social networking with blogging.  It gave me my post for the day, and introduced me to two bright new minds on business.

Peter writes recently on what to expect when starting a new position as a CTO, and I found his comments astounding, because most of what he writes, I've done - not as the CTO, but as an employee looking for new management to correct every problem that exists.

The first problem that a CTO, or any manager should expect, and avoid, is the Messiah Complex.

     You’re suddenly the anointed savior of a situation that it seems everyone was frustrated with.  Thank God you’re here.
All the “sins of the past”, however major they are in impact, are (consensus would seem to have it) nonetheless able to be cleaned up (yes, by you), in a jiffy (say within the first three months or so, unless of course you can do it faster). Get to work.

As an employee, my expectations of the new boss were usually, Thank God we have someone here to solve our problems, or My God, The new boss is the same as the old boss.  It never occurred to me that the problem was the structure of the department, and not the managerial acumen of the new boss.

Find Diversity employment at

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Overhear Us: Workplace Conversations

We often start our social media sales pitches in terms of conversations.  Companies need to be aware that conversations about their products, advertising, and employment brands are taking place, and with the Internet a fixture in our lives, many of those conversations are taking place online.

The difference between a gripefest after work at a bar and one online is a matter of reach - one conversation affects only a handful of people, but the online conversation, if it's juicy enough can reach millions.

With the introduction of Vault and F***ed Company in the 90's, the opportunity to vent proved to tempting, and ex-employees layed into their companies with wild abandon, an amusing but ultimately fruitless endeavor.   In this decade, the growth of various company-centric alumni networks (like the one from the Oracle-Peoplesoft merger) gave former employees the chance to network, but only after the fact.

The recent social networking softwares like LinkedIn improve that networking capability, and Jobster's AT allows employees to discuss why they like their companies (though the cheerleading phenomenon is evident in most of those postings), but there isn't much room for employees within a company to share information that would benefit the company itself.

Enter, a Vault like system that allows access to company information outside the firewall, but only with an e-mail address for the company you're discussing.  I'm not sure of the monetary value of such a service, but if it catches on for large companies, it could provide a valuable feedback service for employers and most important, serve as a catalyst for change by the employees themselves.

What happens when several employees who truly care about the success of a company get together and share ideas on what's right (and what's wrong)?  You get a catalyst for change?  The big question, is of course, adoption.  Will the kind of company that doesn't already have this dialogue in place internally have enough people who want to turn to a dialogue outside the company?

Is the reward high enough to merit the risk of getting caught?  Strong privacy rules abound, but some information is easier tracked than others.  Whether or no makes it, the idea of conversations happening between employees not formally introduced on the org chart should prove interesting in years to come.  For some companies, it will be vital, as employees complaining are at least signs that they are considering staying.  Employees who are silent are usually on their third interview.

Who Do Discrimination Laws Protect?

I had the news on for our breakfast this morning, and though I can't find the case yet, breaking news decribed a sexual discrimination case where a woman complaining about a 'hostile work environment' was fired, and sued her employer.

Anyone who has been in management has sat through numerous nonsense seminars on sexual harassment and discrimination in the workplace.  The goal is not actually to train or teach, but rather to provide  "proof" that the corporation took steps to prevent harassment (remember, it's pronounced Hair-ess-ment).  That may not be the stated goals of the program, but if you want to lecture adults like children, you have to learn to take your lumps.  Maybe somewhere, someone has an Oscar quality film, but it's doubtful.

But that's not the point.  In this recent case, and I don't have the specifics and am not a lawyer, but it seems a woman felt that the workplace environment she was in wasn't very civilized.  Crude jokes, sexually suggestive presents, and rumors of adult content on the manager's computer led her to complain about the state of affairs. 

She was fired, because her complaints led to a crisis in confidence in management based on her complaints. Yes, you read that correctly.

Continue reading "Who Do Discrimination Laws Protect?" »

The Role of the Account Manager

The role of the staffing Account Manager in Third Party Contigency Recruiting is new business development and client relations.  Typically, Account Managers are brought on to call clients, take job orders, and manage the employment process for the hiring manager.

Account managers are paid in several ways, with the most common being a base plus commission package with some kind of expense report for the ever present "lunches."  The salary range of the staffing salesperson starts at $24,000 and goes up $60,000 (very few are paid more on the base).  For some companies, the commissions are "pooled" to create team work, but in most cases, account managers and recruites 'own" clients and candidates, and are paid for successfully making a placement.

The general, most common kind of commissions are based on a percentage of the net profit, which is defined as the full fee in direct placement, and the net profit in contract staffing.  Thus, if you make a direct placement for $20,000, the account manager gets either  10% of that  $20,000 or  20% of his "half" of that fee (with the other half going to the recruiter).  When the percentage is higher, there is always a catch (like 30% of the net profit, but no base salary).

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Video Will Have No Impact On The WorkPlace?

Dennis Smith at WirelessJobs points us to this video of a man quitting his job, with, uh, well, with flair.  It's clear that he has no intention of ever returning - and in fact he's using the video to promote his new site (which I'm afraid to go to).

For all of those Human Resources people who wonder about how video and blogs are going to affect their workplace - how do you stop this story from getting out to the local news when it is spread around the world in a day?

Shouldn't you know something about blogging and video before this happens to you?  Reading blogs is no longer something just for techies.  If you are in charge of your company's public persona, it it your responsibility to look out for your reputation. Yes, this guy is an extreme example, but I would hate to be the HR manager responsible for learning why this video is all over the web, and how you're powerless to stop its spread.

Most CEO's will see this and think a lawyer can sit a note and get it taken down.  They are wrong.  Threatening to sue just causes other bloggers to post it - far more bloggers than you have lawyers.  So what can you do?

You start by asking for advice.

STL Mgmt Networking Group: Harpoon Technologies (UPDATED)

(Meeting Time Changed - the group will meet on April 21st at 7:00 a.m)

StlMgmt Networking

Hugues Belanger is leading the next StlMgmt Networking meeting on Friday, April 21st, 2005 at 7:00 a.m.

This is a group of St Louis Managers and entrepreneurs whose goal is to increase their personal social network and find out what other companies are doing.

This month's speaker is Shawn Rhoads, CEO of Harpoon Technologies.  For an invitiation, e-mail

The group is not a business leads or a recruiting function.  The promise is no one will call the next day asking for a job or   It is a manager networking group, built to foster knowledge transfer for managers.  For an invitiation, e-mail jim - at - recruiting - dot- com.