Learning Lessons from Online Staffing

Not that long ago, few people had even heard of online staffing, much less made use of it themselves. Even when Tim Ferriss’s book The 4-Hour Work Week dominated the bestseller lists and attracted widespread attention for a good chunk of 2007 and 2008, his practice of hiring online assistants and temps (which he discussed in that book) didn’t become widespread. Now, though, the world seems finally ready to embrace online staffing—or at least to take a closer look at it.  

Over the past year or two there’s been a lot of buzz in hiring circles about online staffing. At the end of 2010, PCWorld included online staffing on its list of “Six Hot Workplace Trends for 2011”; just a couple of months ago, they followed up with a detailed article about the rapid growth of online staffing and some of its major players.

Similarly, in mid-2012 the editorial director of Staffing Industry Analysts warned that managers and HR directors who don’t adopt this new practice would “be flattened,” and just last month she published an updated assessment of the state of the industry. Her latest article presents online staffing as “a viable choice” and describes some of the benefits of this practice.

In all these discussions about what online staffing is and who the main companies are, however, there hasn’t been much consensus on how this practice will affect (for better or worse) traditional staffing models. Drawing on my extensive experience in the staffing industry, I can offer some opinions on this subject.

First, if your firm focuses on staffing high-tech or highly specialized positions, you may face steeper competition regarding the price and level of talent of hires, because most online staffing services focus on connecting employers with contingent workers who are available for work anywhere in the world.

However, if you’re a traditional staffing vendor who engages primarily in temporary and temp-to-hire administrative, clerical, or light industrial positions, you shouldn’t fret too much over losing business to cloud staffing. Online vendors can’t yet replicate traditional firms’ ability to source and screen potential employees or their ability to fit hires to employers with whom they’ve spent time developing relationships.

Although I don’t see any immediate threats to the traditional staffing model, this doesn’t mean that traditional staffers can’t take a page from online staffing vendors’ playbook. Paying attention to—and incorporating—some of those new practices can help traditional firms raise their level of service and stand out from the competitors in their markets.

Convenient access to information

As residents of a hyperconnected world, we have come to expect anytime-and-anywhere access to information. Online staffers already provide this. Traditional firms that want to remain competitive should offer this service as well, by implementing online systems that allow clients to input staffing orders, schedule interviews, check order statuses, and evaluate the credentials of potential candidates (via prerecorded candidate interviews, for example) at their convenience.

Price and feature comparisons

Although many positions have preset starting hourly rates that fall in line with the staffing company’s bill rate, there’s no reason that a more highly qualified candidate can’t fetch a higher rate for his or her service. That’s standard practice among most online staffers, and a service that both employers and employees increasingly expect. When presenting several candidates to a client, consider defining each candidate’s bill rate according to his or her qualifications.

Strong guarantees

In spite of interviews, evaluations, and everyone’s best efforts to create a good fit between an employer and a hire, sometimes the relationship just doesn’t work out. Most online staffing agencies have policies that link employer satisfaction to the fees they pay; Elance and Guru, for example, don’t pay employees until their employers are happy with their work.

Traditional staffing firms can take this practice one step further and offer a 100% satisfaction guarantee for the first full week (40 hours) of employment: if you send a candidate who turns out to be a bad fit for your client, restaff the position and don’t charge the client a dime for the first 40 hours the first person worked. Any costs you eat will pay dividends in future business, as you demonstrate to your client your confidence in your screening and selection process and prove your willingness to make things right when an occasional bad apple slips through the cracks.

Looking Ahead

It’s impossible to predict exactly what the future of staffing will look like. Some people think that online staffing will dominate the market; others think that online staffing is a passing trend that can’t compete with traditional firms.

Me, I take the middle ground: I think both types of staffing will be around for a while. As the incumbent, however, traditional staffing has some serious advantages over the new arrival. If your organization is a traditional staffing vendor, be sure to play up your advantages—and feel free to borrow some ideas from online staffers and incorporate them into your own services.


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