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Inside the State of Staffing Report: What High-Growth Agencies Do Differently
27 Plays1 month ago
The staffing industry is at a crossroads. Market conditions are tougher, technology demands are higher, and the old playbook for growth isn’t cutting it. Yet some agencies are thriving while others struggle. What’s the difference? That’s what we’re exploring today with the latest State of Staffing benchmarking report from Staffing Hub. Surveying hundreds of staffing leaders, the study reveals a clear pattern: the most successful agencies aren’t just moving faster — they’re moving smarter.
In this episode, David Folwell, President of Staffing Referrals and founder of Staffing Hub, breaks down this year’s research on transformation — how agencies are adapting, where they’re investing, and what separates the winners. He’ll share the key trends shaping the industry, the strategies fueling high growth, and how to build high-functioning talent pools that drive lasting success.
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Transcript
Challenges and Opportunities in Staffing
00:00:00
Speaker
Let's be honest, everyone in staffing is feeling the pressure right now. The market's shifting fast, tech is evolving even faster, and the growth doesn't feel as straightforward as it used to. But with every shift comes both challenge and opportunity.
00:00:13
Speaker
the chance to adapt, stand out, and grow. Which brings us to the big question. How are agencies really feeling about their ability to succeed in the middle of all this change? And just as importantly, what are the fastest growing ones doing that the rest aren't?
00:00:27
Speaker
Well, there's good news because we've got some answers. And that's exactly what the State of Staffing Benchmarking Report from Staffing Hub digs into. It's packed with insights from hundreds of staffing leaders.
00:00:37
Speaker
And today we're talking to one of the main people behind the report to break it all down. Here's a spoiler alert. The agencies pulling ahead aren't chasing speed. They're building high quality, loyal talent pools and making smarter bets on where to invest.
00:00:52
Speaker
So if you're wondering how to truly differentiate your agency in a market like this, this episode is for you.
Introduction and Guest Intro
00:00:59
Speaker
Welcome to Staffing Made Simple, a podcast series powered by Simple VMS.
00:01:06
Speaker
Welcome back to today's episode of staffing made simple brought to you by simple BMS. Of course, the most vendor friendly BMS that's out there. I'm Casey Wagonfield, senior sales executive at simple BMS going on 17 years in the staffing industry.
00:01:19
Speaker
And as always, I'm joined today by my co-host and colleague friend. and Senior Vice President of Simple VMS, Mr. Rob Geist. What's going on, Rob? Hey, Casey. How you doing, brother? Excited about this guest. I always run into him on the conference circuit, and it's always good to see him and chat with him. So really excited to have him on the podcast.
00:01:38
Speaker
For sure. Well, let's get right into it because today's episode is going to be a good one.
David Falwell on Industry Trends
00:01:42
Speaker
We've got David Falwell with us. David's the CEO of Staffing Referrals. If you're in staffing, you know who they are.
00:01:49
Speaker
The leading referral management platform built specifically for staffing agencies. It helps teams automate and scale the referral process so they can source, engage, and place qualified talent faster.
00:02:00
Speaker
But that's not that all. David's also the founder of Staffing Hub, one of the most trusted sources for business intelligence in a staffing industry. Each year, Staffing Hub puts out a state of the staffing report, a benchmark study that surveys hundreds of staffing agencies to uncover key trends, challenges, and opportunities.
00:02:17
Speaker
This year's theme, it's transformation. The report digs into what's really happening inside of staffing firms, the pain points, the priorities, and most importantly, what the fastest growing agencies are doing differently.
00:02:29
Speaker
So today we're diving into this year's findings with David.
Focus on Quality in Staffing
00:02:33
Speaker
What's driving growth, how top performing agencies are standing out, and what it really takes to build and engage high quality talent pools that fuel long-term success.
00:02:42
Speaker
So David, appreciate you for coming on. how are you doing? I'm doing great. Thanks for having me. really excited to be here. So let's start by digging into this year's report. Tell us how did the idea for this benchmarking report come out in the first place and what was the goal behind it and how long have you been running it?
00:02:58
Speaker
I've been running it for eight years. And the idea behind is I'm just a data nerd. I got into staffing about 14 years ago, always on the supplier side. And at one point we were doing like a temporary housing quarterly reports, trying understand what's going on that when I was working at a company that was related to that and started working with a couple of healthcare care staffing agencies and I just wanted to understand the DNA of a fast growth company compared to slow growth company. So I wanted to dig in and understand what tactics people were using, how they were operating.
00:03:32
Speaker
and it's just evolved over the years. And I think every year we get a little bit more curious, which makes the report a little bit bigger. And we just get more and more insights into how fast-forward companies are operating. And it's been passion project at the start, but it's also the reason that staffing referrals exist was because I saw what was going on in the market and and realized there was a big gap.
00:03:54
Speaker
So David, I know a ton of staffing industry leaders that follow the staffing hub closely. like What felt different about it this time around and what's really standing out to you in terms of industry shifts or trends?
00:04:06
Speaker
I think the number one shift that Kind of surprised me, but it also makes a lot of sense is that the quality of hire moved up to the number two most important thing compared historic rate to spend speed or cost.
00:04:20
Speaker
We're seeing a shift in the industry from transactional behaviors to more partnership like behaviors where we're focusing on quality of hire. Also, there were some other stats that don't if they're necessarily surprising, but they are trends that I think are important to understand and know that they continue to drag the market forward.
Digital Transformation in Staffing
00:04:41
Speaker
One is that the fastest growing agencies, 32% more likely to have a mobile app, which means they're owning channel of the market. They're 52% more likely that to use referral software, means they're building their talent community.
00:04:53
Speaker
And then there was 37% more likely to prioritize AI for revenue generating activities. So I think you're continuing to see the digital transformation drive growth for those that are adopting and and taking the advantage of it.
00:05:06
Speaker
But you're starting to see how the strategy is playing out and how it's, I think, going to end with the agencies that are winning in the long run are really focused on quality partnerships, delivering quality talent, and not just on behaviors that essentially to be automated at this point.
00:05:23
Speaker
That's a good point. What do you think are some of the most impactful changes that are hitting staffing right now? The one that I'm closest to david day to day there's a shift from job boards being the go-to number one activity.
00:05:37
Speaker
and it needs to be that job boards were just, that's what we do. We figured out how to optimize our job board mechanics where we get candidates in and we get them placed. And I think now the staffing firms that are doing things intelligently are looking at how do drive more placements from my existing database? How do I get more out of the ATS, out of the platform that I've already built?
00:05:59
Speaker
They're looking at how do I get more referrals from this network as well? They're starting to get just more strategic in how they're doing that. So in eight years of doing this report, We have not had staffing firms say they care about the quality of hire and now they are.
00:06:14
Speaker
And I think that is because the realizing that people don't want to work with you if the people you put on contract don't stay for a long time. You want to know you're getting good people. You want to know they're staying on contract and you want to know that they're going to be dependable.
00:06:29
Speaker
And I think that element is now becoming something that's critical for how you operate with HR managers. I also think that the impact of AI is something that we all know and see, and it's accelerating faster than I expected. And I think it might even have a bigger impact than what most think it will.
00:06:49
Speaker
I saw a stat the other day that 99% of hiring managers are now using AI somewhere in the funnel, that they're all engaging with it at some point. And what that's going to do is eliminate a lot of the transactional behaviors. Like I think that ah HR managers, one of the reasons they would hire a staffing firm was I don't have somebody on my team who can bang out 120 calls a day, but I know a staffing firm will do that for me.
00:07:15
Speaker
Well, in the AI, You can have an AI tool do that. And it be, it's not quite as good yet today, but it's going to be. And so we're starting to see these transactional behaviors get commoditized.
00:07:27
Speaker
And I think that's kind of the step one of some of the ai impact and long run, I think we're start to see a lot of knowledge work and some other changes are gonna be quite a bit deeper as well. It's funny you say that as I remember the days of the old post and pray, right? You get a job order and you just throw it on indeed and career builder and just pray that somebody applies. When you've got a database full of 500,000 candidates that you could go after.
Underutilization of Databases
00:07:51
Speaker
we did a big audit of major staffing firms, a few different large ones. they looked at the indeed people that were coming into their database. And it was like one out of every five was already in the database.
00:08:02
Speaker
And they're paying for them a second time because they haven't figured out how to nurture them correctly. So I think that there's just huge opportunity there. And I'm not saying job boards are dead.
00:08:13
Speaker
It's any tool that should be part of your funnel. Probably always will be, but I think that using a job board and trying to differentiate your service and hold margin and say, we're doing something that you can't do is difficult when it's easy to post a job on Indeed and get a few hundred people to apply overnight.
00:08:34
Speaker
Yeah, we get a lot of people on the podcast talking about how you have to really have a multi-pronged approach. The old ways aren't just going to work for everyone. And the people who embrace the tech are the people who are going to succeed, as you already know. So who are the companies that are benchmarked in the report? Can you give us like a sense of the makeup of the respondents?
00:08:53
Speaker
Yeah, it's about 400 agencies, all different sizes, healthcare, IT, and my industrial and professional are the biggest verticals in the data. But it's been a pretty good slice of what's going on in the market every year.
00:09:07
Speaker
And historically has been a good guide for where things are going and what tactics are working and what aren't. Something that really stood out to me being a salesperson at heart, 27% of the agencies reported revenue contraction in
Market View and Challenges
00:09:22
Speaker
2024. And it really seems like a lot of agencies right now are very optimistic and they expect strong growth in 2025.
00:09:31
Speaker
Why do you think that is? What's fueling those expectations? And are those expectations realistic or could they potentially be overlooking some tougher times ahead? The data was collected in q one I'm guessing that if we asked it again at this moment, i don't know if the optimism would still be there.
00:09:48
Speaker
One thing I think is interesting is that every year at the start of the year, we're humans. If you're in the business, you've got to be optimistic about where things are going. Also, I think the changes in the political landscape, state people were very excited.
00:10:01
Speaker
and optimistic about what that was going to do for the staffing market. That said, it's July right now, and we are starting to see some lift in hours worked in terms of what and some of the reporting looks like. So I think there are some positive things happening, but I'm not sure if there's more behind it other than just that excitement and human nature. if We're going to make it happen this year.
00:10:20
Speaker
I might have some insight into that because when we get a client with Simple and see a utilization of our clients ticking down since post-COVID effectively, and I'm starting to see that tick up.
00:10:33
Speaker
And then in addition to that, I think more people are shopping for what we're selling, which to me is a positive sign because they want to get their arms around everything that's going on. So just some insight for me on that.
00:10:45
Speaker
Yeah. Absolutely. David, you're talking to staffing executives all the time. Is there anything in particular that they're facing or challenges that's keeping them up at night? Two things I'm hearing. One, need more clients, need more sales. I think that's been the number one component from most of the staffing firms I've talked to last two years. That's been a priority. And it's rare for the client side to be harder than the talent side.
00:11:11
Speaker
There's also AI, if it's not keeping you up at night, it should. I think the potential for disruption that this has on our industry is fairly significant.
00:11:21
Speaker
I did a presentation a few years back on how digital transformation impacted the travel industry. Before this, I was in the travel industry, worked at a company called Hotel Engine. The travel agencies lost 44% their employees from transformation.
00:11:38
Speaker
because of that digital transformation And there's something that you look for the last five years, I've had this conversation probably 10, 15 times on our podcast talking about is that going to happen to staffing? When is that going to happen to staffing? What does that look like?
00:11:52
Speaker
Because we are in a fragmented market and easy to intermarket and one that seemed like the automation might do that. I think AI might actually have a fairly significant impact.
00:12:03
Speaker
on the size of the industry and the structure of the industry. I will give you the light side. I don't have the exact stat, but the travel industry has almost recouped back to where it was. I think potentially even has more people working in it today.
00:12:16
Speaker
The jobs are different. The roles are different. It's not a bunch of mom and pop travel agencies. So I think that the structure of the industry is changing right now. I think AI is accelerating that.
00:12:26
Speaker
So between AI and getting more job orders, those are the top two things I'm hearing in the market. And I think trying to figure out what does the future look like and how and do I navigate what tech and tools to use to effectively move forward and not get left behind.
00:12:43
Speaker
It's crazy how all those mom and pop travel shops got gobbled up by the big players over the last two years. We knew it was coming, but and to see it actually happen after people predict something that is kind of crazy.
00:12:55
Speaker
We have some customers that have staffing referrals that are small healthcare staffing and growing. One of them actually is Aviante customer as well. They're growing, they're doing well. What we're seeing is that if you are ah smaller agency, SMD, you need to be aggressively niched down and you need to know what makes your agency different and you need to lean into that.
00:13:17
Speaker
And a lot of times of the smaller agency, it's the relationship
Long-term Strategies and Quality Hires
00:13:21
Speaker
with the candidate. It is almost like you are building an Doing things that you can't do at have a different scale? You kind of read my mind for the next question.
00:13:30
Speaker
Clearly, there are firms that are still growing despite everything that's going on. And the report says that fast-growing agencies grew 21% over the last year. What else are they doing differently to have that kind of growth?
00:13:43
Speaker
Yeah, again, the quality elements of it, it's trying to make sure that you hire the right person, are you putting them through an assessment score? I think it's all of those things, but the reason that it matters is that quality candidates stay on contract longer.
00:13:56
Speaker
If you have people that are staying on contract longer, you make more money. We have an example of that. One of our customers three years ago realized that their referrals were staying on contracts significantly longer.
00:14:08
Speaker
They leaned into that aggressively over the last two years their placement volume was down 8% last year, but their revenue was up 9%.
00:14:20
Speaker
So they just did less work, made more money simply by shifting to higher quality candidates to stay on contract longer. So I think that strategic shift of where you're going to get higher quality candidates important.
00:14:31
Speaker
Also looking at your cost structure and automation and AI. in figuring out where you can reduce operational costs, whether that's back office admin work, which we're seeing being done by AI operators right now.
00:14:45
Speaker
There's tools out there that are literally replacing data entry pretty quickly. And then also looking here at the front end side of this on the sourcing and the sales outreach, where can you create automation that's going to produce the admin overhead that you have to drag your business forward?
00:15:01
Speaker
And then lastly, Huge focus on building the talent communities, building it in your database and making sure that you are focused on curating the talent. Cause I think in the long run, that is the one thing that is going to make your agency unique.
00:15:15
Speaker
It is your database. Your talent pool is one thing that others cannot replicate. Good point. One thing you mentioned and one of the big trends in the report were that the agencies in the report are prioritizing quality hire over speed.
00:15:29
Speaker
And the quality of hire is also rising fast as a key metric for measuring recruitment. It single-handedly one of the most effective ways to drive profitability. So if you are putting higher quality candidates on the job,
00:15:42
Speaker
They're going to redeploy at higher rates They're going to work longer. We've done different deep research with different customers. And it holds true that candidates in their database and the referral candidates are going to be more profitable on average than any other hire, which is why the quality counts. And then i also think If you want to retain your customers, if you want HR person to come back to you, you can't put somebody back on the job. I was at a sales summit recently where they just asked everybody in the room, you get a job order for 20 these positions. Are you going to fill it as fast as you can? are you going make sure everybody that you put on contract, like even if you can't fill it all the way, are you going to make sure it's right people?
00:16:25
Speaker
And two years ago, to them, get them on site, but since he used, let's do it. And now everybody in the room agreed. We're not going to fill it all the way. We'd rather go short than have a any good people than have it be the wrong person in the NHS so we don't get to work with them again.
00:16:40
Speaker
So one of the three key growth drivers in the report is around boosting efficiency with tech. And I know we've kind of already touched on this a little bit, but what are all the tools that you're seeing that are making the biggest difference right now?
Technology's Role in Cost Reduction
00:16:53
Speaker
a i obviously is having a huge impact in this reducing operational costs. We're seeing it on the outreach side where it's doing the pre-screening, whether it's text outreach. There's a lot of AI interview tools that i think are cutting costs down pretty significantly at the initial stages. You still may be human in the loop at the later stages.
00:17:11
Speaker
Also, one of the cooler tools that's out there is the back office side of it where it's literally having an AI operator control your computer and do the manual entry from one platform to another.
00:17:21
Speaker
So instead of building an integration, if you have somebody copying and pasting from one sheet to another sheet, you can now do that with an AI operator. Mobile platforms are such a core element of agency strategy.
00:17:35
Speaker
I've thought that for a really long time. spent an entire summer studying channel strategy. And the thing that I learned is that when you have chill to market, you have something that you can repeat and scale or grow.
00:17:47
Speaker
And I believe that mobile platforms for staffing agencies allow you to keep your community in one spot allows you to send push notifications, tax notification. If you're having a base mobile strategy, I think that's pretty cool.
00:17:59
Speaker
I think that the referral platforms, obviously, or any talent network platforms that allow you to grow your community over time and grow your database. And then recruiting automation, it's a must have.
00:18:12
Speaker
If you're a larger staffing firm, you need some form of automation that allows you to do simple outreach that used to take manual effort. And I think that that is an area where if you're not doing some form of automation, it's going to be hard to operate at the scale that you want to do. It's going to be hard to grow in the future.
00:18:32
Speaker
Yeah, and you mentioned job boards earlier. I know that's a major theme and they're a go-to for agencies for a while now, but we're starting to see a shift. What do you think some firms are intentionally moving away from them? In your opinion, does leaning too hard on job boards end up hurting the business in the long run?
00:18:48
Speaker
I think so. Anecdotally, the agencies I talked to who maybe aren't in me same bro shape ninety nine percent of the 99% of their placements are coming from job boards. And i think the problem with that is if you're getting all of your talent from a job board,
00:19:04
Speaker
Your customers have access to that job board. Your competitors have access to that job board. Indeed is going to your customers and working with them too, and trying to help them optimize it. So you're literally fishing from the exact same pool as everybody else.
00:19:19
Speaker
And when you're fishing from the same pool, it's hard to say, why should somebody work with you? So when you're trying to get net new sales, one of the tactics we're seeing in the industry right now, people are saying, when you work with us,
00:19:30
Speaker
You get access to this talent pool. And I have a personal experience with that. I was hiring a developer last November and one of our customers was IT staffing firm. I reached out to him to let him know. And he's like, it's pretty easy to find people right now. You can use a job board. And I was like, well, you know what? I want to run a little competition. i want to see who can win. And I posted on LinkedIn, got over 300 different applicants for the job in one week, which also going to go on a little ADHD moment here, but sign of the times that exact fame job posting three years ago got eight applies this time over 300 same job posting same kra same role so that gives you a little idea what's going on in the market and secondarily a third of those applies didn't even have the required skills for the role so i thought myself just weeding through so much junk
00:20:19
Speaker
Meanwhile, I talked to my buddy at the staffing firm and he's like, I don't even have to post. I've got five people i could text right now. I've already vetted, curated. i know who you need.
00:20:31
Speaker
So that I think is where staffing agencies have the ability to differentiate their services, to add value. So I say, when you work with us, we're not gonna go to grow the job boards. We're gonna go to our talent pool. gonna go community of pre-vetted, pre-selected people that we know are good. and And when you work with us, you're choosing quality and you're saving all this effort of vetting through and risky working with somebody that you just found out of a job worth.
00:20:55
Speaker
And then additionally, so this goes back to the quality side of it again, but the show outbreaks, when you put somebody in a contract, you want to know that there are going to show up. And if you can improve the odds of show upgrades by 30%, 40%, which you can, if there are people you've worked with before, if there are people that you put on assignment before, then you are going to end up looking better and just being a better partner with the people you're working with.
00:21:20
Speaker
I think it's so insane to me as Batheo firms spend all of these years building these huge databases. I've got like a million contacts in my database I can reach out to. And then you ask, well, how are you sourcing talent? I'm like,
00:21:32
Speaker
Oh, our recruiters go to indeed or Vivian for most of it. So just really looking at what is in your database, what's in your ATS, who's in it, how are you keeping it clean? How are you keeping that data aligned with where do you need to go strategically?
00:21:46
Speaker
And then we're seeing some of the s smarter people in the room talking how they've segmented all of the different job titles in their ATS. So they know exactly who they have in there. So say they have I don't know, you a thousand Ruby on Rails developers. And then they're using that as part of their Dota market and actually advertising.
00:22:08
Speaker
This is how many of this job title we have in our database. So when you're thinking about sales, think about strategically, what do you already have? That's an asset that you can leverage and use as a unique value proposition when you're going to market.
00:22:23
Speaker
Some of our customers on the staffing referral side, they've started actually going on promoting. We have this ambassador network of 10,000 people that are referring to us.
00:22:34
Speaker
So when you come to us, we're going to go get referrals. going get people that aren't job boards. So that's another way that you leverage the data and the ATS to be a strategic by going way to market.
00:22:45
Speaker
Yeah, that used to drive me crazy. You get a big order and the first thing is let's go get some yard signs and go post this online. And then you run a search and there's 100,000 candidates within 10 miles in your data database.
00:22:56
Speaker
Just because they didn't name interview last week doesn't mean they're not interested. Let's use this database to our advantage. Absolutely. Absolutely. So kind of in summary of some of the things that you've said, it seems like the agencies that are growing fastest are the ones who are optimizing their talent database.
00:23:12
Speaker
They're working closer with the talent that they already have versus constantly searching for new. You've even talked about the lifetime value of talent and how optimizing that is key to an agency's success. Is there anything else that you can add to that?
00:23:25
Speaker
Cameter lifetime value is a metric that I think of will be commonplace in staffing over the next few years. It's not new to SaaS and the software as service world. We talk about customer lifetime value and you look at customer lifetime value by the source.
00:23:41
Speaker
of where you got that customer. That same model, that same methodology applies to candidates. So you look at what is the gross profit on a placement by source? How much did I make for the people from Indeed, from Vivian, from referrals, from our database?
00:23:57
Speaker
And you look at it off of all of the hours worked over the lifetime of that talent. The one example that I think will help this hit home. What do you think the lifetime value of a Starbucks customer is? How much gross profit does Starbucks make off of a customer on average?
00:24:14
Speaker
Well, it depends if you're talking about my wife and kids who go every day, it's going to be a heck of a lot more than the guy who stops at the airport and grabs a caramel frappuccino on occasion. What, 5k? I'd say at 12,000. Oh, that's pretty good. So $14,099 on average.
00:24:30
Speaker
That's what they're making in gross profit. So the average customer visits Starbucks 2,820 over the course of 20 years. over the course of twenty years And that's just the average. I'm sure they've segmented that out and they know if you're this person, you're going to be worth 40,000. And they've started to look at that strategically. And I think in staffing, and you could start to apply those same kind of consumer level strategies to candidate acquisition and candidate lifetime value.
00:24:57
Speaker
I think you can get a lot more strategic and you can find ways to grow even in a down market. I love that analogy. And with everything we've talked about, where do you think AI actually fits into all of this? And are you seeing it actually move the needle anywhere yet?
00:25:11
Speaker
And if an agency is just starting to dip their toes in AI, where do you think they should even start? I think the back office automation is one that's low hanging fruit. a lot are unaware. of how that exists or that it can be done. There's ways to do things of more efficiently with the new operator tools.
00:25:27
Speaker
Also the most prevalent and probably the one that I think is going to change the world pretty quickly is the screening side of it. So whether it's qualifying the candidate, screening them in or out and giving you some initial assessment, that has already moved really aggressively.
00:25:44
Speaker
There's one platform that said they were going to do 2 million AI interviews for the fortune 500 this year. And it's just free screening, but that's an effort that is drastically changing and there's a huge impact.
00:25:55
Speaker
And then matching today, you can get better quality matching lead, you know and we've been doing up spot for a while, but now on the canvas side, it's what does the candidate match to this job? How well do they fit?
00:26:07
Speaker
And that's something that is just a no brainer when it comes to AI today, going forward. and think we're going to see it kind of level up the same way that And somebody would in their career in staffing where it's going to get into automated strategic coaching and enterprise sales enablement.
00:26:24
Speaker
I'm using it in ways that I never imagined I would, and it's changing my life pretty drastically. We're working on some things on the referral front. And then if you think way down the line, the new concept that I think sounds crazy to many people right now, but is absolutely going to be a thing is the concept of a digital twin.
00:26:42
Speaker
The idea is that you are going to make a twin of whether it's yourself, of your clients, whatever it may be, so that you can engage with and interact with it as a tested environment.
00:26:54
Speaker
And i would bet money that in the next two years, we're going to be sending a digital twin to meetings. and It'll have some constraints on what it can communicate, to what it can't. But I would guess that we're going to be moving down a path where that's the reality at some point.
00:27:06
Speaker
And there's already people doing it with clients where they're saying, okay, let's take everything we know about this client and that make a twin. And it's not very perfect, but it will create an environment where you can then sit there and practice sell to it and work through engagements with that digital twin of your customer.
00:27:24
Speaker
It's wild. I'm dipping my toes pretty deeply into that already. And it's really exciting stuff. Sounds like the future is now. It sounds rough, but it's happening. I just replicated my voice.
00:27:35
Speaker
I sent it to my dad last He's like, I can't tell. I did it where we have these demo videos that we have on our website. And some of the copy just wasn't the way I spoke. So I said, can we just make AI say this in my voice?
00:27:48
Speaker
And I read a paragraph and we plugged in that copy and ventured a bet that anybody who got on our website couldn't tell which one was the AI and which one was myself. Not to get too far off, Jai, but we actually recorded an episode where we briefly talked about AI and about making a difference. Like what if the CEO of your agency sent a video to every person that was hired and it's AI, right? But they'll say their name.
00:28:11
Speaker
Welcome to the family, blah, blah, blah. It's a different experience for the candidate. And you're right. I think when you're going back to like back office, using AI there, that's another thing we've touched on is using AI to do the busy work so you can focus on revenue generating activities.
00:28:27
Speaker
Yeah, it's crazy. I think that the level of personalization that we're going to see through AI, just talked like the CEO sending personalized messages, and but also just the the capabilities of it. I've had interactions with AI where I was like, that's better than a junior salesperson have because they had all of the answers.
00:28:46
Speaker
Sat there, listened, and repeated everything back to me. So it's a weird place that we're moving into with AI. So the in the report, it says the third biggest growth driver is having a more formal referral program developed.
Effective Referral Programs
00:28:59
Speaker
The report even says that fast-growing agencies are 52% more likely to use referral software, which I think is is awesome.
00:29:07
Speaker
So it sounds like having a staffing referral platform is important Absolutely. If an agency wants to start building a better referral program, where should they even begin? Like what makes referral program successful?
00:29:19
Speaker
The basics of it are standardize it. Make sure everybody knows the talk track, make sure that it's very easy to communicate. Everybody understands the bonus amounts. Our data shows that if you use a dual-sided referral bonus, meaning a give and a get, absent ten ambassador get paid.
00:29:34
Speaker
That's a 29% lift in referral placements. Incentivize your team. It's easy to go to m Indeed or Rivio. It's easy to go to a job board. And they're saying, well, we know that these are worth 40% more. So let's give our recruiters a little bit more credit when they get referrals through the door. So we have people are incentivizing their recruiter team.
00:29:50
Speaker
to align incentives internally. And then obviously when you're ready to scale it, software is always there to kind of automate and take it to the next level. The one caveat, sometimes people are like, we haven't figured out how to do referrals. We don't get any referrals.
00:30:05
Speaker
We need referral software. And if you aren't getting any referrals, sometimes that's because of your reputation. And so it is important to know what your reputation is and the better your reputation, the higher your NPS, the better you're doing referrals today, the more impactful referral software and referral automation you will have on your referral program, which is a little bit counterintuitive. We also hear people like, you know, if it, if any broke don't fix it, right. We're like, it's doing great. We don't need to do anything. It's like, well, actually you'd probably benefit the most out of anybody because you have it in place and working without automation.
00:30:39
Speaker
So what should the staffing agencies look for when they're evaluating referral programs or automation to help these programs? One of the key areas from a candidate perspective is you want to make sure that the talent has visibility into the status of their referrals so they can see what's going on.
00:30:56
Speaker
but kind of gamifies the process. We had one candidate has $4,300 payouts. We had another one, this is Aviante customer where they actually had a candidate who did a bull genre for 30 roles and the guy got 14 of them himself. He just texted all of his friends.
00:31:13
Speaker
So like that's not what happens every day, but When you have software that gives candidate the links and the ability to share and the visibility and to see what's going on.
00:31:24
Speaker
Some people will look at it as a side hustle. We've got bloggers pick links up and do almost looking at like affiliate marketing. So that can be really impactful. We're just sort case study with partners personnel. They cut their job board spend by 18% last year, which is pretty amazing. So they not only are getting higher quality candidates and getting people stay on contract longer, but they also just straight up cut job board spend because they were reducing their dependency on job boards.
00:31:48
Speaker
Healthcare care staff, family, and a company care team, they actually grew last year by 12% in the travel nursing space. which is amazing. but The industry, I think on average, there was somewhere like a 37% reduction spin on average in healthcare staffing, and they were up 12.
00:32:06
Speaker
And they did that by again, shifting their focus to referrals, making sure that when people choose to work with them, it's because they like the people they're working with. So they've taken that SMB approach of our advantage is our people. And they're really focused on that. And then they're layering in automation to make it so that people can do more of the having conversations with people.
Strategic Sourcing for Competitive Advantage
00:32:26
Speaker
Oh,
00:32:26
Speaker
So if someone's listening and they think, okay, I want to grow like the agencies that you're talking about in the report, where do you think they should start? What are the first changes they should make? We've talked about this before, but I think showing up with solutions that maybe they haven't thought of like simple VMS walking in and being like, look, we want to help you do something better. I'm not here to just try to sell you. I'm here to give value to you to make sure that you can approach this more strategically.
00:32:54
Speaker
So I think looking at that from that angle as well, if you're On the smaller side, i think you need to niche down as far as possible and be specialist beyond what you could ever imagine. think that's critical.
00:33:09
Speaker
Focus on what your advantage whether it's flexibility, agility, or the relationship. If you're on the larger side, i think that you've got to dig deep into your data, get more strategic with the approach and make sure that you are just smart about how you're sourcing talent.
00:33:26
Speaker
And then I think looking at your talent pool is your competitive moat in the future. And the more that and you nurture it, the more that you understand it. I think that the bigger impact that that's to may have all along.
00:33:38
Speaker
So Damien, if you had to sum it all up based on everything we discussed, any final thoughts or advice you want to give leaders in the staffing agency to look ahead? and think we're at an inflection point from a technology burst perspective, from a value chain perspective, the way that agencies have historically operated and how they've created value is changing because of what practice doing.
00:33:59
Speaker
And I strongly believe that the moat in the future is going to be the data that you have. the talent community that you built and your access to that and how you're delivering it. And I think that you need to look at the way you're leveraging tech to keep costs down and focus on differentiating your brand in a meaningful way.
00:34:19
Speaker
um And so one thing we didn't talk about deeply, but I think that your brands, your digital presence, your mobile experience, all of these things tied together to create a campaign experience that's going to make it so they're choosing you over someone else.
00:34:32
Speaker
And it's going critical that you're reducing friction, delivering consumer level experiences and focusing on the talent community that you built over time. Dave, this has been an awesome conversation full of what I think are some really critical insights that agency professionals and leaders need to hear.
Contact and Conclusion
00:34:48
Speaker
We really appreciate you for being here. Now, if one of our listeners want to get ahold of you or someone at staffing referrals to discuss how they can build a staffing referral program. How can they best do that? Find out LinkedIn, David Falwell or david at staffingreferrals.com to get over me directly.
00:35:03
Speaker
David, really can't thank you enough for being on Staffing Made Simple. It was a great conversation. Also want to thank all of our listeners. And if you like what you heard here today, please like, share, subscribe to our series.
00:35:15
Speaker
We're available on Spotify, Apple Podcasts, I heard radio, as well as staffing-madesimple.com. And if you want to learn more about Simple VMS, you can visit our website at simplevms.com.
00:35:29
Speaker
Until next time, keep it simple. This has been an episode of Staffing Made Simple, powered by Simple VMS, the vendor-friendly VMS.