If Recruiters, Service Reps and Payroll/Billing folks are unhappy with their software, they will not use it to its maximum potential.  If people don’t know how the software operates, of course they will be unhappy with it!

I recently had the pleasure of working with a great group who understands effective and proper training.   

Effective and proper training does not mean hours and hours and hours of listening to the teacher drone on and on.  Effective and proper training means sufficient training geared specifically toward the audience. 

I’d like to point out some key things this group did that made the training a success…

• Small groups
  • Allows for more individualized attention
  • People are more comfortable asking questions in smaller groups
  • The trainer is more able to make sure everyone is keeping up
• Like groups – Separate Sales people from Service Reps from Pay/Bill Clerks from Admins
  • Training can be tailored to their specific needs which are different from the other groups needs
  • People aren’t bored listening to areas that do not pertain to them
• Learning abilities
  • More advanced students can have more advanced trainings
  • In general, each “Generation” has a different learning style
  • Language barriers – we had an interpreter for the Spanish speaking group who learned more effectively hearing it in “their” language
    • This had an added bonus in that our interpreter really had each session embedded in her brain after hearing it, analyzing it then having to repeat it
• Easy does it
  • By 3pm each day people are “full” and start to zone out
  • Scheduling shorter training sessions allows for the information to be more easily absorbed – latent learning
  • 2 sessions of 4 hours each with different groups was the perfect recipe

 Understandably, this may not work for every group but taking just a few of these ideas and incorporating them into your training can make a huge difference.

I’m convinced that this sort of empathy played a big part in their business success.

These professionals could analyze needs in ways that their clients couldn’t even express. And perhaps more importantly, they learned how to work with their clients’ complex change processes.

They were decades beyond their peers who were stuck in 1970s-style feature/benefit sales, and they knew intuitively how to avoid the presentations that inevitably lead to price discounting and no-decisions.

Most of this, I suspect, isn’t a revelation to those of you that have successfully navigated through the staffing depression of the last two years. In fact, if you’re still standing, you probably could write a book on the subject. And those agencies that sold staffing as a commodity – they are long gone.

The issue then is no longer whether you should empathize with your customer, but how? How can get not just yourself but your entire organization to empathize with your customers?

How can you and your entire organization empathize with your customers?

This is a big topic – much too big for a techie like me – but I would like to share a process that TempWorks has successfully used to build this empathy. This process anchors our support system, and it has helped our sales and profits surge to record levels during this last year despite a drought in the technology business.

Our technique is to “eat our own dog food.” That is, we conduct our business almost exclusively using our own products, so when a customer calls with a trouble report or a business process question, we’ve likely already experienced that issue and are able to offer solutions that we know will work.

For example, we used to have a mediocre solution for e-mailing documents, which caused us pain and inspired us to innovate.

Have you ever e-mailed a client ‘See attached résumé’ and forgotten to attach the document? Have you ever sent the wrong résumé to a client? Or forgotten whether you sent it or not?

If you haven’t, hats off to you. But if you’re like most people, then executing e-mail with finesse can be a challenge.

These issues drove us to build a document management system and an e-mail engine into the core of our enterprise product. Today, a full range of similar CRM features in our core product allows us to better serve our customers.

These solutions will allow you to do the same with some profound implications for the recruiting process.

For example, with our Enterprise version, you can manage large numbers of résumé documents and do a full-text search combined with criteria such as location and salary range. Search results return to you already ranked, so you can quickly choose the top candidates and a click lets you e-mail them to your client.

Without time-consuming busy work and error-prone processes, you have more time to focus on your client, which puts you in the position of adviser and cost-reduction expert.

Goodbye, 1970s-style feature/benefit sales. Hello, partnering!

Thirty years ago, a gross profit calculation was as simple as Bill – Pay = Gross Profit. Back in those days, we enjoyed profit margins large enough where we didn’t sweat operation twists such as employer taxes and workers’ comp, since rates were so low we could count them as overhead.

Today, those little twists have grown into profit destroying monstrosities and have turned our simple calculations into a Gordian knot.

Consider the following steps needed to calculate gross profit arithmetic today:

1. Start with the bill rate. Make accommodations for non-standard overtime rates, unit rates and salary bill rates. If the billing is for medical staffing, factor in the callback and charge-nurse rates. Determine any shift differentials. Apply discounts using tiered discounting. If supplying staff via a VMS (Vendor Management System), discount the VMS fee according to its price schedule.
2. Calculate the pay rate. Factor in non-standard overtime rates, holiday pay, shift differentials and industry-specific payments or charges. Apply overtime rules that vary by state. Determine “hidden” payroll costs, i.e. franchise fees, employer taxes, liability insurance and workers’ comp.
3. Calculate any miscellaneous costs. If you receive funding, determine its cost. Figure in any rebates. If your client pays by credit card and requires you to absorb the fee (if so, let’s hope you’re getting paid immediately), determine the fee percent for that card type.
4. Calculate splits. If your job orders are shared, (similar in situation to when one realtor lists your home and another sells it) then you need to calculate splits. In staffing, you can split among multiple parties; the branch owning an accounting job order may let it be filled by its accounting division who in turn fills it through an outside agency. Then split the bill and cost components between the parties (for example, 60%, 30%, 10%).
5. Sales taxes on staffing. A confiscatory and inappropriate government intrusion on the labor market, if you ask me – apply in an increasing number of states. Those sales taxes vary based on the type of work an employee is doing on a particular day. For instance, in Texas, you charge sales taxes for a computer professional’s services except when that person is doing training. In Washington DC, the tax depends on the job title. In Ohio, consult your tax lawyer. Although most accountants don’t want sales taxes to impact gross margin calculations, you have to remember to invoice and collect those taxes while keeping them out of GP calculations.

Triumph! Here’s your GP report, we’re finally done! Or are we? Oops, we forgot about employee benefits…here…done!!! Um, no again. We still need to split employer payroll costs into separate transactions for checks cut from multiple assignments.

At TempWorks, it continues to get harder, not easier. We serve clients who come to us with their own individual bill and pay processes that impact their Gross Profit.

After all, if they weren’t unique, they wouldn’t succeed. Right?

I’m not sure where the fallacy originated, but I hear it propagated most by merger and acquisition broker-types that have fallen in the trap of confusing correlation with causality.

Yes, there is a correlation – buyers often seek niche players as a way to enter a new market. But there is no causality; moving into new market niches does not necessarily establish you as a niche player and it may have the opposite effect.

Be aware though, falling for the fallacy can actually decrease your market value. If you are spreading yourself too thin, becoming unfocused or blemishing your income statement, then you are likely making yourself less attractive to potential buyers.

Niche players become successful because they know their market, not because they decided to pursue a niche.

The physical therapist launches her staffing firm with tight relationships and an intimate knowledge of rates. She does it because that’s what she knows, not because she thinks it’s cool to enter a market niche.

She may one day wake up and find out that what she thought was an isolated and unimportant market that no one else worked was actually a market niche.

What do you do uniquely? Maybe you’re the only one who stuck it out in the tough Peoria market for quality factory workers. That might not seem glamorous, but for a potential suitor wanting to get into that market, you may well be an attractive niche.

The Hang Seng was down more than 8 percent the other day alone, and the staffing stocks in the U.S. markets have already been cut in half over the last six months.

Our clients generate roughly a $10 billion run rate and although that represents a small portion of the overall U.S. staffing industry, it’s enough for some statistical observations.

The downturn started in earnest in the second quarter of 2007 and mostly hit temporary staffing while direct hire stayed strong. By the 4th quarter, direct hire began to take a hit and temporary staffing stabilized. All trends point to an awful market for direct hire and simply a crummy one for temporary staffing.

That’s enough to get in a defensive mode. Fortunately, we have the staffing crash of 2002 to learn from. Over the years since those unpleasant days, I’ve gathered the stories from those that survived or even thrived in the hard times. Some common themes:

• Cut out the frivolity beginning with the owner iron. This is not the time to buy that Mercedes. Already got one? Sell it and buy an Altima. Show the team you’re the first to make sacrifices.
• Outsource. Eliminate all possible non-revenue generating positions. Outsource computer operations, payroll processing, tax filing – everything – and eliminate expensive accounting staff.
• Negotiate. In a weaker economy, your customers will look to you for price cuts. Be prepared. Have your negotiating agendas ready. Don’t expect that your clients will determine on their own the overall value you bring to the table.
• Top-grade. You’re in a much stronger position now with vendors and employees than you were two years ago.
• Capitalize on competitor mistakes. In 2002, when all seemed hopeless, the bigger staffing companies stumbled badly. They let customers down left and right. Example: one of our clients picked up a high-margin, $80 million contract that Adecco fumbled. You don’t get those chances in a strong economy, so take advantage now.

As we all know, the days of sulking and negative thinking are over. Use this challenge as an opportunity to pass your competition!

Scheduling systems date back to the Chou dynasty when Chinese harem administrators developed algorithms to manage menstrual cycles and schedule conjugal visits with the emperor that would coincide with fertility.

You can trace payroll back at least to ancient Rome, when paymasters devised a salary system based on salt (the word “salary” derives from the Latin “sal dare”, meaning to “give salt”).

My Dad invented a search and retrieval system for aircraft engineers in the early 1950s using a sophisticated filing system in which skewers would wind their way through holes punched in talent cards to pull up candidates with specific skills.

In the late 1960s, when Dad was running Manpower’s technical division in Milwaukee, he brought me to the office and I got to see first-hand an early payroll mainframe – the forerunner of Manpower’s legendary Midas pay/bill system.

The programmer showed me what keypunch cards were and how he programmed them. To run payroll, you had to take a huge stack of these cards (which represented both the payroll program and the payroll records) and submit them as a deck to a card reader. It was more like an industrial machine than any technology device we’re familiar with today. Back then, computers were strictly for the accounting office.

We had no notion that they could be used on a network, as desktop workstations, or as productivity devices like phones.

The micro-computer revolution did little at first to move staffing technology out of the back office; it just made it cheaper and more available for everyone. After Dad got his own Manpower franchise in 1974, he and I developed a pay/bill system on an early micro-computer.

We had to punch in the instructions to this system in machine code or assembler (a very low level computer language). For example, instead of writing “Move $5.00 to Bill Rate”, as you would in COBOL, we had to write something like this: “L,U A0,5; S A0,03726″.

It was a very crude system in many ways, but it did the job and helped handle the load as sales went from $1500/week to $1 million/year – big bucks for us back then.

Staffing technology gradually moved from the accounting department to the front office throughout the 1980s. In 1993, I found myself writing a new system for the family staffing company, this time using Lotus Notes as a way to do email and power internal recruiters.

A friend got me turned on to the internet in a big way, but besides email, I didn’t see at the time how the internet would affect staffing.

Nevertheless, this Lotus system could search thousands of candidate records, pull up a resume and email it, all in just a few seconds. Meanwhile, visionaries like the developers of Monster.com realized that the internet would become the platform, and not just for email.

By 1999, it seemed everyone had picked up on the internet and browser applications became all the rage in staffing.

One big problem with browser applications, however, has been that they are hard and slow to use. If you are paying someone to work on an application all day, it gets really expensive to put up with all the repainting and roundtrips to the web server.

Add to that the incompatibilities between web browsers and constantly changing (notice I didn’t say evolving) standards and vendor interpretation of those standards, and you have yourself a real mess.

Fortunately, Microsoft came out with its Windows Presentation Framework (WPF) in 2006, and we pounced on it at TempWorks. If you’ve seen an iPhone, you have an idea of what a WPF application looks like.

To put it simply, WPF gives you all of the access and flexibility advantages of a browser, but in a user-interface that is easy to learn and really fast to use. We now have seven staffing companies up on our WPF system and we are adding new users every day, thanks to the easy deployment Microsoft built into it.

You’ll start seeing a lot of WPF applications in the coming years, including the Silverlight extension that Microsoft is marketing aggressively as a replacement for Flash.

Very soon, browser applications and old Windows programs will begin to seem like DOS programs – inflexible and slow.

WPF interfaces will be common place in staffing environments, especially with touch-screen and surface computing.

Although industries like porn, gambling, and social media are often claimed to be the quickest to adapt to new technology, staffing is never far behind. It’s going to be a fun ride during the next five years.