Alex Pantich is the Co-Founder and COO of Upshift, an on-demand staffing platform.
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Many industries have been upended in the last 20 years through the application of technology that disintermediated traditional relationships and turned service businesses into marketplaces. For example, 20 years ago many people utilized travel agencies to book their vacations. Just as companies like Priceline revolutionized the travel industry and Uber the taxi industry, the staffing industry is now in a position to see similar changes.
Most of the staffing industry today is dominated by traditional staffing agencies. If you were to walk into a modern-day staffing agency, you would see an office centered around recruiters — the travel agents of the staffing industry. While this model may work well for those seeking candidates for highly compensated and in-demand roles, it often doesn't work well for most who are looking to fill hourly roles. Let's examine the key differences of using either service to determine which is right for the role you're looking to fill.
Cost
If you were booking a trip today, you would be unlikely to book with a travel agency. Likely, you would go to a travel booking site, see all available offers and decide for yourself which one fits your situation best. Not only would it allow you to call the shots, but you'd save money as a travel agency would charge you an overhead to cover payroll and associated costs while a booking website wouldn't. Similarly, when you use a traditional staffing agency, you will pay more to have a recruiter in the middle. This may not be necessary if you're looking to fill mostly low to mid-skill hourly roles. In these cases, the tasks a recruiter would perform, like contacting candidates, can easily be automated by a staffing platform.
These automated systems can also show available opportunities to candidates and let the candidates express interest and confirm attendance on their own. This all saves on the overhead that staffing agencies would otherwise have and allows platforms to charge less than an agency would. Of course, without a recruiter, you'll need to delegate the task of searching the staffing platform or responding to candidates to one of your team members.
For more highly compensated or skilled roles, a staffing agency is still your best bet. Those roles are worth the high cost of a dedicated recruiter as they may require connections, networking and passive targeting that may not be suited to a staffing platform.
Size Of Workforce
Another difference to consider is the size of the workforce willing to work for a staffing platform versus a staffing agency. Some people are unwilling to work for staffing agencies because they are assigned to work rather than getting to choose, and oftentimes an agency will be unable to assign work very far in advance or for less than 40 hours per week.
Staffing platforms generally have a pool of high-quality talent who would not onboard with a traditional temporary agency or apply to a position typically filled by an agency for a variety of reasons. Staffing platforms are bringing in a wider and more robust pool of talent because they are able to offer choice and flexibility.
While staffing platforms bring in a wider pool of labor, in many cases, staffing agencies can be a better choice if you're looking for extremely specialized roles. If an agency specializes in a particular skill or industry, for example, it may have a small labor pool overall but a much larger labor pool for that particular skill, since those are the only jobs it offers, than a staffing platform.
Though most of the market is still dominated by traditional staffing companies, it is clear that in the coming years, customers and candidates will demand a change. Having the option to use a staffing platform will no doubt revolutionize the market. Cost and the size of the available workforce are aspects you should consider when deciding whether a staffing platform or traditional agency is best for your candidate search. Staffing agencies will have to either evolve the way they do business or be prepared for some healthy competition.
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