Staffing Exchange - A HotGigs blog

Chimes Files Bankruptcy

Chimes (The largest VMS player) files bankruptcy – How will it impact staffing firms?

Yesterday, Axium International, Inc. who is the parent company of Chimes Ensemble Group filed chapter 7 bankruptcy which has shaken the contract & contingent staffing industry.

This was a huge surprise to us in the staffing industry – and even to many of the Chimes employees who we work with everyday at major client accounts. 

News Links:

LA Times

Staffing Industry Analysts

Many of the staffing firms we work with have been told that they won’t get paid for most of November and December 2007’s billable time – which would leave firms (and their consultants) in a really bad situation, not to mention the companies who have outsourced their entire contingent workforce management to Chimes.

Axium only recently purchased Chimes from Computer Horizons in February of 2007 – so it hasn’t even been a year since the acquisition, which adds to the confusion, especially the inflated price of $80 million which had most of us in the industry scratching our heads. 

There is some speculation that the writers strike has a role to play in the downfall since Axium was a major player in payrolling the TV/movie industry which has all but been shut down since the beginning of the strike, however, the majority of people close to the business said it was mainly because of poor management and a complete failure of the integration of the Chimes business into the acquiring company.

Chimes clients which have included major players such as UnitedHealth Group, GM, Toyota Motor Company, Ford, Perot Systems, Morgan Stanley, Kaiser Permanente, AT&T, Bell South and many more are now scrambling to either find a replacement MSP or to bring their management back inside the company – which is a daunting task. 

More importantly, these companies will have to figure out how they’ll regain the confidence of their staffing suppliers, who are most likely not going to be happy losing 1-2 months of billable revenues (especially after they’ve been margin squeezed already), which could result in a large volume of contractors leaving their accounts in multiples with the pending loss of pay and future instability.

Some companies have reportedly converted the Chimes on-site program teams to their own full time employees – and re-establishing direct vendor relationships with their vendors to return to their pre-outsourced state of internal management.

Some of the firms are excited about the collapse, with the prospect of working directly with their client managers again – and not having to deal with the bottleneck of the Chimes VMS platform to fill contract positions, however, their excitement is tempered with trying to isolate the damage they may have suffered with any consultants currently engaged in the accounts.

For companies that are seeking VMS/MSP types of solutions – this will surely add another dimension to what strategy they select, and how they build their CWM strategy going forward. 

• Has your firm been affected by the Chimes Bankruptcy? How?
• What is your thought about working through major VMS/MSP programs?
• Do these programs help or hurt our industry?

Talkin' bout your generation

Recruitnik has an interesting post on how, as a member of Generation X, she ends up bridging the gap between Boomers and Gen-Y candidates:

Boomers have a comfort level to ask me internet related questions without feeling out of touch. Asking “What is an avatar?” is not a silly question. It is valid to me but probably not to a millennial. To them it is obvious because I believe they were born with one assigned to them. Gen Y’s look at me as old enough to have a clue but more for validation or praise but definitely not about the technology.

Gen Y’ers (AKA Millennials) live in the 2.0 world. They don’t know life without cell phone, personal computers, the internet and information at your fingertips for all.

Allison Boyce, a sourcing manager at Deloitte Services and another Gen-X recruiter, weighed in with a more detailed assessment of Gen-Y candidates on ERE.net:

Generation Y candidates actually require a chance to have fun. They can't imagine all work and no play because they don't perceive that they need to work very hard. They have productivity tools, they are connected, and they are loaded with options that let them do whatever they please.

Boyce offers some practical advice to Boomer and Gen-X recruiters as to how to properly manage expectations in terms of salary, promotions and time off, all of which they feel entitled. She provides strategies for turning around the conversation, starting by acknowledging what's important to them -- time, money, promotions, and a sense of fun -- and then asking questions that serve to, in her words, "turn the conversation into something manageable and scalable".

Penelope Trunk  offers a different insight into the inner workings of Gen-Y'ers: that they are in fact, inherently  conservative in their lifestyle and approach to their careers:

Gen Y are really hard workers. They have been working harder in school than any preceding generation. And the pace that they sift and synthesize information puts the skills of their elders to shame. So why complain about the demands of this generation? They are great at work and they want to have work that is meaningful and challenging.

And this is exactly what everyone else wants from their work as well. These demands are not new. It’s just new to hear them from an entry-level worker. But in fact, it’s reasonable and fundamentally conservative since these are the values this generation has been taught to live by.

The jury is still out as to whether we are facing a labor shortage in the coming years. If the most dire predictions prove to be true, then Gen-Y will be increasingly in the driver's seat in terms of how companies attract talent. And even should those predictions prove to be overblown, the Gen-Y work style will increasingly dominate the workplace, and -- given the continued growth in the contingent workforce -- the staffing and consulting industry as well.

Place your consultants at 3M and other premier clients through the HotGigs Channel Vendor Program

Have you ever wanted to place your consultants with a Fortune 500 company, but weren't able to because you weren't on the preferred vendor list or didn't have a subcontractor relationship with an approved vendor? If so, you will be glad to know that you can now submit candidates to 3M and other HotGigs clients who have added HotGigs to their preferred vendor list. It's all part of our new Channel Vendor Program, which we announced last week with an invitation for all interested staffing firms to join our growing Staffing Exchange.

HotGigs is pleased to announce that 3M’s IT Division has implemented the HotGigs Channel Vendor program. This helps 3M to gain access to contract talent with HotGigs community of IT consulting and staffing firms through a single preferred vendor relationship. This means that your firm can now gain access to 3M’s IT contract requirements on the HotGigs Staffing Exchange, and leverage our preferred vendor status to place and manage your contractors through HotGigs effective immediately.

Fast facts for Staffing Firms:

• You can access 3M's open IT requirements on the HotGigs Staffing Exchange.
• You can submit your contractor profiles and rates online.
• You can leverage our preferred vendor relationship to place your contractors at 3M.
• You do not have to be a Premium (Paid) Member Firm to submit contractors to 3M or other Channel Vendor requirements.

Here's a quick overview of the HotGigs Channel Vendor program and how it works for firms.

Interested in placing candidates at 3M? Use this search to see all 3M contract opportunities through HotGigs. We are constantly adding new requirements, so check back often.

To get started:

1. Search 3M requirements on HotGigs now (and receive future email notifications).
2. Submit your contractor profiles and rates online.
3. Receive regular status updates from our HotGigs account managers.
4. Place your contractors at 3M through HotGigs.

To participate, you must be a Member Firm on the HotGigs Staffing Exchange. If your firm is not yet a member of HotGigs, you should register now. There is no cost for Basic Membership, and Basic Member Firms are eligible to submit candidates to Channel Vendor requirements (management fees are reduced for Premium Member firms). 

We're excited about how our new Channel Vendor program will provide our staffing firms with access to our client network, as well as simplify the contract management process for both our firms and clients on our growing staffing exchange.

More client announcements to come in the very near future. Stay tuned.

Road Rules: MN Recruiting Roadshow recap

On Friday July 20th, more than 100 HR and Recruiting professionals from both companies and staffing firms showed up at Best Buy headquarters in Richfield, MN to attend a half-day Minneapolis Recruiting Unconference (and apparently costing Steven Rothberg, CEO of CollegeRecruiter.com five bucks).This event was the initial stop of a Recruiting Roadshow under the auspices of Recruiting.com.

The theme of "Intergenerational Recruiting", and included presentations from keynote speaker John Sumser on changing workforce demographics; Steven Rothberg on recruiting on social networks like Facebook and MySpace; and Doug Berg and Nicole St. Martin of HotGigs on incorporating Web 2.0 techniques to transform underperforming career sites into candidate magnets. Additionally, there was a panel on blogging, including myself, JobDig President/COO Toby Dayton, Derrick Moe of SelectMetrix and Josh Kahn of Accenture HR Services. Lunch was graciously provided by Don Ramer of Arbita.

Photos of the event can be found here. Our fearless "Cruise Director" Paul De Bettingnies has more details at his blog, MN Headhunter/Nerd Search, as does his "wingman" Nicole St. Martin (who may have single-handedly saved Paul from a nervous breakdown), and newbie MN blogger Katie Tierney.

Kudos to all who worked hard to make this a great event. Let's do it again soon, and make it a full day (so we won't have to talk so fast!).

Are your job titles hurting your recruiting?

The answer: definitely. To find out how, read "Wouldn't you love a job as a P2 Fld Comp Sup?" by our own Doug Berg, currently on the front page at ERE.net.

Do you hire with your head?

You might think you do, but until you've read Lou Adler's book Hire With Your Head you will discover what you are missing, and how to fine tune your recruiting strategy.

I've been in recruiting for over 18 years now, and there are only one or two authors or speakers that still grab my attention, and Lou is one of them.  In my opinion, nobody has organized the art of recruiting into such a mind grabbing yet practical approach like Lou has.  It's changed my recruiting behaviors and resulted in dramatically different results.  There are "aha" moments on nearly every page for both beginner and veteran recruiters alike.

Anyone in recruiting (especially in the agency or staffing side of the business) should read and digest this rare new book - which will help you serve your clients and managers better than you can imagine, and help you to work with candidates in ways that you hadn't thought of before.

I would encourage you to get a copy of this new version of Lou's book and keep it close by as a reference guide, as you'll re-read it many times over the weeks, months, and years to come.

Hire With Your Head: Using Performance-Based Hiring to Build Great Teams

This up-to-date and fully revised edition of Hire With Your Head features an in-depth look at the biggest changes in the hiring arena since the introduction of the personal computer.  Social networking sites, such as ZoomInfo, LinkedIn, MySpace, and others have eliminated any secrecy in hiring and recruiting.

Full of invaluable tips and helpful exercises, as well as useful checklists and revealing benchmarks, Hire With Your Head is the indispensable, hands-on guide every manager needs to hire the right person every time.

Get your copy today

Cheers,

Doug

Doug Berg is the co-founder of HotGigs and current Chief Gigster.

HotGigs' Doug Berg in BusinessWeek and the New York Times

In the past week, HotGigs has garnered some significant media attention. Last Monday, BusinessWeek.com published an interview with HotGigs founder Doug Berg. The main topic was the rise of contract workers as a significant segment of the US workforce. An excerpt from the Q & A:

What's driving the rise in contract-based workers that we're seeing?

We're mid-course in a major shift in the employment picture in the U.S., particularly in the technology-rich professional areas. Due to compressed market cycles, the old way of doing business just won't work too much longer. This specifically applies to the area of work-force planning and recruiting.

To succeed in the future, those working in corporations and staffing firms, as well as the workers themselves, have to understand the forces at play: cost and on-demand access to short-term labor, preferences among laborers, and technology innovation.

How fast is this contingent-staffing industry growing?

Fast! The growth of the staffing industry is also something that's very indicative of shifts in the labor supply. Data show that the staffing industry has doubled in just the last five years, from about a $60 billion a year industry to an over $120 billion a year industry, and analysts project it will become a $200 billion industry by 2010.

You can read the entire interview here.

This morning, HotGigs was mentioned in an article in the New York Times on sites like TheLadders.com and HotGigs that charge candidates a membership fee for access to some portion of their specialized jobs. Doug's comment can be found at the end of the article (in fact, he literally has the last word).

Both articles are linked in our News Archive on HotGigs.com.

Do you have a req problem or a fill problem?

The beauty of incorporating technology into a staffing company's daily life is that it offers it offers a wealth of detail with which to analyze the strengths and weaknesses of the business.

Case in point: I recently spoke to a friend of mine who owns a regional, mid-market staffing company, and he was describing his frustration with a recent stall in revenue growth. After a number of years of daily involvement in which he managed processes manually, he decided that to achieve his growth objectives he would hire a General Manager to automate and improve his company's day-to-day operations. Understandably, there was an initial adjustment period as the team absorbed a new management style. They are now trying to effectively automate in order to have access to data that will allow them to quickly assess and adjust their business process.

In my desire to understand his end goal, I asked, "What does success look like?" He answered that he has realized an average yearly growth of 150% over the last 5 years. At minimum, he expected similar growth numbers.

So I asked: "How do you measure success?", to which he responded: "By looking at the revenue in the balance sheet."

Now we were getting somewhere. I continue to find it amazing in this technology rich market many users of contingent labor use Accounts Payable ledgers to manage their spend and many providers of contingent labor use balance sheets to manage their growth.

Time to get to the heart of the matter. I asked: "So, do you have a requisition problem or a fulfillment problem?"

I received a quizzical look. As a known supplier of contingent labor, my friend's firm receives requests for talent and responds as quickly as possible. Their order focus is based on their history with each client and its associated success rate. In other words, each client has a reputation for being a good client or bad client based on their history of choosing his candidates.

My friend didn’t answer my question. So I tried again. He decided to stay the course and added that he focused his team's attention on those orders from clients that did not implement a vendor management program. He feels that he can meet his client’s need better by not submitting candidates via a technology enabled program.

My summation is that his relationship-oriented fulfillment organization does not want a program to assess his talent's credentials against the market while realizing 150% annual growth rates.

Wow...The perfect recipe for mediocrity.

So, again: "Do you have a requisition problem or a fulfillment problem?"

Here's my point: today’s technologies will give all sizes of staffing companies (not just the largest ones) access to information in order to become a significant player in their market, not just a sub-vendor to those in control. If you can dissect information in order to clearly understand if you have a req. (sales) problem or a fill (recruitment) problem, you will be able to develop a solution for growth rather than mediocrity.

The Req. Fix

Many of the staffing companies I visit will tell me they need to have access to additional requisitions. So I ask them to explain their current sales process.

The overwhelming majority of staffing companies "sell" their services by contacting a hiring manager to solicit an order. The conversation runs something like this:

"Hi, I’m Kevin. My company specializes in providing the best contingent labor talent at the best price. Our recruiting strategies are second to none which means we are routinely the quickest to respond to our clients’ requests."

The hiring manager responds, "That’s great. We are always looking for the best suppliers," while thinking, “Like I haven't heard that one before."

"Let me prove it to you be showing you how we perform. Do you an order we can work on?"

There you have it… The entire "sales" cycle boiled down to a couple of sentences.

Requisition problems are best addressed by arming the sales person with granular data available in many technologies today. This will validate their claim as a best supplier in the market.

Can you answer these questions...?

• How many requisitions have you received in the last month?
• How many of these requisitions do you provide candidates?
• What was your average response time to these requisitions?
• On average, how many candidates did you provide to each requisition?
• How many of the candidates were an exact match to the client’s request?
• How many of these requests did you fill?

In other words, provide verifiable data points that will allow clients to draw their own conclusions. If you are unable to arm your salesperson with solid data points, expect mediocre results.

Your salesperson should ask the client for similar data. If the client does not have a grasp on the  business, there is a significant opportunity to positively impact it.

The solution to fixing the req. problem is by providing fill statistics.

The Fill Fix

In today’s market environment, any order is a good order, right?

Not really.

The best orders are the ones most likely to be filled by you. Not the ones with the highest profit margin and will be filled by your competitor.

Can you answer these questions...?

• Is this requisition in close proximity to my talent base?
• Do the skills on this requisition match my talent base?
• Does this requisition include skills I excel in placing?
• Do we understand the client’s procurement process?
• Do we understand the client’s working environment?

In other words, if the staffing company’s expertise and capabilities match the client’s process and expectations, the odds of improving the fill rate increase dramatically. The sales person should solicit companies with a footprint that matches your strengths.

The solution to fixing the fill problem is by analyzing req. statistics.

Seems straightforward. Analyze your performance data not your balance sheet to increase revenues. Revenue growth is the result not the measuring stick.

Happy Hunting - Kevin

Kevin Moldestad, a HotGigs Sr. Sales Consultant, has 20+ years of industry experience; Former VP of Sales at itiliti/Peopleclick, former Regional Sales Manager - Kelly Services. Kevin has conducted numerous seminars and panel discussions related to contingent labor management and vendor management solutions.

Recruiter Ethics

A couple of weeks ago my friend Joe Golemo posted a request for help with an ethical dilemma. Lately the subject of ethics in recruiting has been coming up a lot online, and I can't decide whether it's because there's a fresh new problem or it's simply one of those ongoing watercooler discussions that's tailor-made for kvetching.

RecruiterGuy (Bill Humbert), for example, says he only deals with a select few peers because he's been burned by recruiters who won't honor the relationship. RecruitingEdge (Stephen Levy) asks how you define character (in candidates, but there's a strong implication that it wouldn't hurt for recruiters, either).

Or take recruiter Kevin Dee of The Eagle Blog, who's concerned about recruiters who present candidates without their permission. He's suggesting that all recruiting agencies should be forced to join industry associations that require adherence to a code of ethics.

Recruiter Michael Glynn puts it even more strongly: publish a list of miscreants online to show we're serious about cleaning up our industry.

So, what gives? Are the ethical safeguards and codes of conduct already in place in the staffing industry not enough? Do we need more? I'd love to get your opinion on this.

Cheers--

Doug

Followup: Offshoring

My first post on this blog, about offshore outsourcing and whether it's still cost-effective--and a second post by my friend Doug Berg on HiringExchange--provoked some interesting commentary and I thought I'd spend this post responding.

Some of the feedback I've gotten suggested that I'm against offshoring and that I haven't looked beyond India for examples. At the risk of splitting hairs, there are a few things I’d like to point out.

The argument I was making was not “it no longer makes sense to outsource, companies should bring all their IT work back in-house." Rather, it was “just because they’ve been doing it for 5-10 years doesn't mean it still makes sense. Companies should re-evaluate major decisions like this every year to make sure they still make sense, financial or otherwise.”

And, interestingly, it’s not just me (BTW, the opinions expressed are mine and not Charter Solutions ;-) questioning the value of outsourcing. Doug Berg makes some excellent observations on this topic in his post, listed above. And an article in CIO Insight suggests that “outsourcing does not save money.”

In this article, CIO Insight surveyed IT executives and discovered that:

"...dissatisfaction with outsourcing vendors is widespread, yet most of the 401 IT executives who took our survey blame their own companies most of all for the disappointing performance of their vendors. Though outsourcing is directly responsible for layoffs, it's not as disruptive as it was last year.” 

This chart from the story sums it up the best:



Note that in Section 2.2, large companies believe they are reducing costs via IT outsourcing, whereas small and medium companies do not. In Section 2.3, domestic outsourcing firms take it in the shorts.  And, in Section 2.4, more than 50 percent of all firms say offshore firms can save them money. In my opinion, to be conclusive a lot more than 50 percent should feel they're saving money.

As far as I'm concerned, the apparent confusion in the market about the true value of outsourcing vs. insourcing vs. nearsourcing, etc., drives home my original point: You can't make assumptions about this stuff. Just because it made financial sense five years ago doesn't mean it still makes sense.

Companies must perform a new cost/benefit analysis of their sourcing plans on a routine basis to be assured they are actually receiving the originally projected benefits. That ensures they're likely to continue receiving those benefits in the future.

In short, there are too many company-specific issues involved with outsourcing to assess any benefits...unless you do a company-specific assessment.

Opinions?

Thanks--

--Joe Golemo

Joe Golemo is vice-president of business development at Charter Solutions, a Minneapolis systems integration firm, and a seasoned business development and management executive with more than 25 years of IT industry experience.  He has been a manager and vice president in companies such as IBM, BORN, Connect Computer Company, and is.com, starting as an IBM engineer. He has a BS in chemical engineering and an MBA in finance and strategic planning and currently serves as board chair for Starbase Minnesota, a not-for-profit organization whose mission is to get disadvantaged youth interested in science, math and technology.

What’s ethical (and not) in subcontracting consultants?

I’ve run into a couple of interesting ethical situations lately that I’d like to get some second opinions on: What’s the appropriate behavior when one staffing firm subcontracts a consultant through another firm? I’ve asked myself this question on two different occasions(names have been changed):

Scenario A
I received a call from "Fred," a former colleague, who wanted to know the availability of one of my top consultants, "Jim." I told him Jim was on a long-term assignment and asked for details of the open position. Based on Fred’s description, I recommended a second consultant, “George,” who had just recently been recommended by Jim. George had the right skills and was available.

I suggested we split the margin 50/50 if we placed George in this position. (Note: I define the margin as the difference between the client bill rate and the cost of the consultant, either the hourly pay rate for an independent or hourly pay plus benefits mark-up if it’s an employee). Fred felt that a 60/40 split was more equitable because he’d been cultivating this client for close to six months, while I’d only found George in the last few weeks.

Scenario B
"Bill," another of our consultants, had just become available, so I looked through our list of open positions to find one that fit his skill set. No luck, so I e-mailed a few former colleagues at other firms to see if we cold sub Bill to any of their clients.

One, "Mike," responded with a good opening; we agreed to split the gross margin 50/50 if we made the placement, so I sent over Bill’s resume. The client interviewed Bill and eventually decided on someone else, saying Bill was too light in certain areas. A week after that I approached Mike again, because I knew his client uses a lot of this type of consultant.

Mike replied that he was waiting until Bill’s bench time ran out, at which point he would simply place him directly, without going through me.

My first thought was that I need to get some new former colleagues!

My second thought was about ethics. Are there industry standards that should define the relationship between two consulting firms when one has the opening and the other has the consultant? And that leads to a whole bunch of questions:

• Does one firm have “dibs” on a consultant in their pipeline?
• If Firm 1 sends a consultant to Firm 2 for Deal A, what happens if Deal A goes south but Deal B goes through? Should Firm 2 still have to include Firm 1? If so, how long does that obligation last? What if the consultant has a resume posted on the Web and could have been found that way, without Firm 1’s help?
• Does it matter if the consultant is an independent or an employee?
• What is the appropriate GM percentage for each firm to receive? Is it always 50/50?
• Do the rules change if consultants are in shorter supply—as they seem to be these days—and does that imply that the firm with the opening gets the smaller percent?
• What happens if demand for consultants significantly exceeds the supply, as happened during the hey-day of the late 90s?

You can probably tell what I think, given the way I posed these questions, but I really want to open the debate and get your opinions first. How do you work through these situations? Does your firm have written rules or conventions for dealing with other firms? Should we build an industry-wide set of standards for working with other firms?

Let me know.

Prologue, just FYI...
In Scenario A, Fred and I eventually agreed to split the margin 50/50 and—wouldn’t you know it—despite a very successful interview the client found an internal candidate and canceled the requisition!

In Scenario B, Mike eventually agreed to work through Charter if he placed this candidate.

Regards,

Joe

Joe Golemo is vice-president of business development at Charter Solutions, a Minneapolis systems integration firm, and a seasoned business development and management executive with more than 25 years of IT industry experience.  He has been a manager and vice president in companies such as IBM, BORN, Connect Computer Company, and is.com, starting as an IBM engineer. He has a BS in chemical engineering and an MBA in finance and strategic planning and currently serves as board chair for Starbase Minnesota, a not-for-profit organization whose mission is to get disadvantaged youth interested in science, math and technology.

Y2K disasters? You ain't seen nothin' yet!

One of my favorite recruiter blogs, RCI Recruitment Solutions' Bells & Whistles, posted a chilling heads-up: Baby boomers are retiring soon, and corporate America isn't doing much about it...yet.

Now, that's nothing new--we've certainly seen all kinds of discussion about how the US will cope with a shrinking labor force and growing retired population. What Bells & Whistles points out, however, is that there's a growing realization among corporate America that there isn't an easy solution.

Contrast that with the last huge technology crisis, Y2K. I was one of those sitting around the servers waiting for an explosion on New Years' Eve, 1999. For months all we read about, heard about, talked about was the world running 90 miles an hour into a big brick wall--WHAM!--and everything grinding to a halt. COBOL programmers were suddenly back in fashion, disaster recovery companies struck it rich....and at 1:00AM on New Years' Day we listened to the sweetly humming machines and said, "....that's it?"

Well, folks, this time the problem's not quite as easy as recoding all your two-digit years into four-digit years. We need a new model for resourcing skilled labor, and new processes for handling those resources.

Age discrimination rears its ugly head, as this SHRM article points out, and that has to stop. Recruiters and hiring managers alike must prepare for an older workforce. Alice Snell at Taleo notes that the majority of baby boomers intend to continue working into retirement; I think that may just be the thing that saves us...if we're prepared.

Do you have plans in place to attract and hold the over-50 crowd? The over 65-crowd? Indications are that contracting is ideal for this emerging workforce: They can work as much or as little as they like, they have vast stores of experience that may make them more efficient and productive...and they don't have the distractions common to younger workers, such as new families. (This post by staffing expert Lou Adler offers a couple of hints.) 

Today's corporate hiring managers don't always see it that way; certainly very few I've talked with are actively incorporating the baby boomer question into workforce planning.

So here's an opportunity for the smart recruiter: Build your baby boomer talent pool now and start helping your clients remodel their hiring plans. I guarantee that it'll pay off over the next decade.

Agree? Disagree? Post a comment and let me know.

Cheers--

Doug