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Mon, Nov 16, 2009 20:08 EST

New Technology Staffing Business Model

Anonymous user

Topic: IT Organization Management

Current Rating: 5 Comments: 2

21 Concepts is primarily a consulting/development firm that serves small to medium businesses. Part of 21 Concepts' strategy is to become a full service IT solutions partner. We aim to do this via software development and consulting, staffing and recruiting, network solutions and infrastructure, and through licensing and reseller agreements. Our goal is to never lose a customer no matter how their needs change.

Obviously, this is an ambitious goal and needs to be tackled piecemeal. Since we are already an established software and consulting firm, we decided to try our foray into the staffing and recruiting industry. After doing some market research and drawing on our experience from dealing with many recruiters and staffing agencies, we tried to do what they do. We thought that charging the same fees or a little less to gain market share (often 20% of a first year's salary), working harder than they do and providing better quality service would bring us success. Instead we were met with a choice between ethics and sustainability, hard to sell value propositions, fierce competition with high risks, and a general disdain for the industry as a whole from both hiring managers and candidates.

So, rather than close down the division and leave it to the wolves, we took a look at the deeper issues with the operations and started asking more questions. First things first, we wanted to know why the industry was looked down upon. Reputation is very important. The IT community is a microcosm of the larger customer base. Word travels fast and it takes much longer to undo any damage to your reputation than to cause it in the first place.

It seems as though most of the time, the staffing agents are simply middle men/women who push resumes from job sites like CareerBuilder and Monster to the hiring manager who will screen and sift the resumes much the same way as if posting the job himself/herself. Often it is too late because the master service agreement specifies that no matter the amount of work the recruiter does, if the contact is presented to the company, then the fees apply. Even if the candidate isn't right for the job, they still send the resume over anyhow and thus lock in a fee if the company needs this position at a later date.

Before starting 21 Concepts, Wes would get calls from recruiters often about a "phantom job". The recruiter would have this great job which pays well and wouldn't give many details, but when asked would respond, "Well, why don't you send us a Word or PDF copy of your resume so that we can better evaluate if you are a good fit?" So he'd send it along and, after a while, might get a call back to talk about his experience and particularly who his managers were. Some searching on the internet confirmed our suspicions. This appears to be widespread industry practice to fill resume coffers and gain leads. What kind of sustainable business has to mislead its customers constantly?

Something that both the companies and candidates can agree on are the overreaching non-compete and non-disclosure agreements. Often you will find that the candidates and companies (their holdings, companies in which they own stock, etc.) cannot deal directly with one another for over a year even if just a resume was sent for a job which they weren't qualified for anyhow. This comes with the threat of hefty & unreasonable fees or a lawsuit. There clearly

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Wed, Dec 2, 2009 2:42 EST
Anonymous user
Posted by: .NET Programmer
Rating:

Great article, Bryan. I have personally been through some of the situations you've described. I'd be interested in speaking more with you about this.

 
Sat, Jan 16, 2010 0:20 EST
Hi
Posted by: bryan.smith
Rating:

Sorry I'm just now replying to your message. I hope you had a great holiday season and a Happy New Year. Drop me a line any time!

Bryan

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