Relationships are Critical to Companies That Rely on Staffing Firms
Employers that have struggled to build a strong relationship with companies in the staffing industry should analyze the net promoter scores (NPS) of the firms they have used, says James Krouse, Director of Marketing and Communication at Nesco Resource.
NPS is a business metric that measures how likely someone is to recommend a company’s products or services to friends or colleagues. It’s a metric considered more accurate than traditional customer satisfaction ratings.
“Satisfaction is subjective,” Krouse says. “It can mean just meeting a minimum standard for example. NPS is really about putting your own credibility on the line based on your experience. This is critical in the staffing industry because service to both employers and job seekers is a key differentiator.”
In the staffing industry, the NPS is separated between the client side and the talent side. These scores are generally very low for the staffing industry overall, Krouse says.
“Staffing firms are having difficulty finding the right people for the right jobs because the unemployment rate is so low,” he says. “But it goes deeper than that. A lot of staffing agencies are not offering the consultation on attracting and retaining that their clients need now more than ever.”
Smart Business spoke with Krouse about why the NPS is a useful tool for companies that fill positions through the staffing industry.
Why is the NPS low for the staffing industry?
There was huge growth in the staffing industry that coincided with the dip in the economy in 2008. A lot of companies turned toward contingent labor in order to help them survive and/or continue to grow their business.
Now we’re at a point where expertise is needed to deliver the high level of service that must be present through this economic cycle of low unemployment. Some staffing agencies haven’t been able to reconfigure who they are in order to deliver a more consultative approach.
Often staffing firms will commit to finding talent quickly. These are individuals who are available at the lowest rates possible, but they may come up short on skills or reliability. That experience would not garner a very high NPS.
Many in the industry point toward a low unemployment rate. That certainly is a factor, but the core problem is about communication. Is the pay rate competitive in the market? Is the timeline too tight to fill the order? Which skills are essential and which are not? In the end, companies tend to value communication and a good working relationship.
How does the NPS rate on the talent side?
The industry average on the client side is very low, 4 percent, but talent scores industry wide are only 24 percent. That leaves a lot of room for growth. Again, communication is key. It’s not just about someone walking into a staffing firm and then getting put into the first job that is available.
If there is not communication about what the job is going to be like and whether it is a good fit with the individual, it’s not going to be good for that person or the client. The worker is not going to be engaged in what they are doing and performance will suffer. That’s why it’s important to look at both client and talent scores.
What can staffing firms and clients do to boost performance?
There needs to be an emphasis placed on people and relationships. There need to be conversations with prospective workers about what they want in a position and where they feel they would be a good fit.
Expectations also need to be made clear with the client so that the staffing firm can identify candidates that are qualified and engaged in the available opportunity.
The staffing firms that rate highest in the NPS maintain a continuous dialogue with clients and survey the talent at the beginning, middle and end of their assignments to get a comprehensive analysis of how it worked out. Looking at the NPS for both the client and talent sides gives you a complete picture of how effective a staffing firm will be. It’s an essential combination for a successful long-term partnership in staffing.
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