Staffing companies have become a part of my daily life over the past 18 months here at Shiftboard. Of course I was familiar with staffing companies from some previous business experiences, but more in the sense that I am familiar with Uganda. In a pinch, I could find Uganda on a map of Africa, and I can name at least one infamous Ugandan, Idi Amin. Getting all the gears cranking here with my iPod playing as I write, I just remembered that Entebbe, site of probably the most famous and successful hostage rescue of all time, pulled off by Israeli commandos, is the capital of Uganda. Come to think of it, I was way more familiar with Uganda than with staffing companies. That was 18 months ago, however.
What do I find so interesting about staffing companies
1. They are great entrepreneurial businesses. Virtually anyone with the guts to do so can start a staffing company out of their own home with just 2 items: a telephone – check that, a wifi connection – and a business skill that is in demand somewhere.
2. Virtually every business skill under the sun is in demand somewhere. That’s pretty cool, because it means a staffing company can appear at any time, almost anywhere in markets ranging from babysitting to veterinary medicine to jet engine repair.
3. Staffing companies are some of the least capital intensive businesses going. All you need is a couple of folks, likely starting with the owner/operator herself, with the skill in demand, and a client or two. That means they are ideal businesses for times when capital is really tight . . . HINT: capital is really tight right now.
Staffing companies are entrepreneurial
4. Staffing companies fill a key role in the labor market, allowing larger organizations a lot more flexibility in their labor pool compared to full-time staff. This is especially true in times of uncertainty when companies don’t know how many full-time staffers they need. I know this because Milton Friedman and I were just having a chat about macro-economic theory a few days ago. Actually, that’s not true, Milton has not bothered to chat with me in years. Rather, I have chatted like you probably have with scores and likely hundreds of business owners or department directors over the past year that are trying to manage a P&L. Inevitably, hiring a contractor from a staffing company is a more flexible approach when they just don’t know how much demand they will have or if their budget will be cut next quarter.
5. Here is an item you won’t hear too much at the next staffing company trade show – the entire business is almost always dependent on a group of contractors who can walk out the door basically at will. Well, that adds a bit of a complex dynamic, doesn’t it? If for whatever reason the staff has had enough, the only billable assets in the company can find another home right down the road. I don’t like feeling the screws tighten any more than our customers who operate staffing businesses, but this particular dynamic becomes even more acute in markets with a shortage of certain skills.
We work with a lot of businesses in nurse staffing, pharmacist staffing, dental staffing – all of which are up close and personal with this shortage of skills. Let’s circle back to item 5, but not so early in the morning when everyone is heavily caffeinated and uptight, because opening our minds may uncover some real business opportunities here.
One last thought. Over the past couple of quarters, I have begun to think of every business services company I come across as a staffing company. We work with courier companies, which are really driver staffing companies delivering boxes. We work with virtual call centers providing interpreting services or IT expertise, but in reality they are staffing companies with telephones. This viewpoint helps me to boil every business service we are working with down to its essence very quickly – a business skill in demand and a wifi connection (you peeked back up at the list, didn’t you?). Boiling things down to their essence makes us better at improving our core online scheduling software and adding more value to our customers.
I am just getting the juices flowing here on staffing and business services. Just delving into that 5 item list is going to keep my keyboard warm for the next few weeks. Stay tuned. Either that, or go rent “The Last King of Scotland,” because my limited familiarity of Uganda is tapped out.