I've been out and about at a lot of recruiting and HR conferences this fall. There is a lot of talk about social networking and how this technology may or may not be cost-effective for organizations. I'm thinking the business case for staffing is wrapped around increasing gross margin per candidate over their entire life cycle.
At HR Tech today, I heard a read-out of a report from CedarCrestone that noted most HR technologists are not currently spending their time or money on Web 2.0 technologies, like social networking. Lexy Martin, the presenter, suggested that this is not an indicator that HR organizations don't care about social networking; it's more like they are looking for additional education and ways to effectively apply the technology.
I've had the pleasure of hearing Gerry Crispin speak a few times this month and I think he makes a fantastic point - one that really resonates with me. He states that as popular and intriguing as MySpace and Facebook are - he believes they are our training ground, helping us to learn about social networks and online communities. His expectation is that social networkers will migrate to private, affinity groups, like corporate social networks (Starbucks example), corporate alumni networks (Deloitte example) and other niche affinity groups.
Currently, we see some staffing companies experimenting with social networking technology to help build a candidate community or to source candidates (e.g. hundreds of recruiters that are Linked In Professional users).
I just wrote an article on candidate relationship management concepts for SI Review (due out in November issue). One of the ideas that really struck me as I wrote the article is that the candidate life cycle need not end. The idea being that candidates who are aware of your staffing brand ideally transition into clients.
Maintaining candidate relationships past the job order close date is an interesting method for increasing gross margin. If a candidate is sitting in your database, you've already made some investment in them, that is, you've already paid to screen, interview and onboard them. Why not invest a little more to get more? Placing candidates on multiple temp assignments increases gross margin per candidate. As candidates develop their careers, multiple perm placements are a possibility for increasing profit.
Further, candidates often develop into clients - another opportunity to increase revenue. If your staffing firm builds a trusted relationship with candidates over time, you'll be the first to profit from their job changes and career development.
I think developing and fostering long-term relationships with candidates is a very interesting, and potentially profitable idea for staffing firms. This type of approach does not fit the transactional culture of staffing companies - certainly the skills shortage will motivate change. There is a ton of technology out there to support professional and social networks - it seems that developing and investing in the vision may be worth the effort.
