The recession of 2008-2009 was a hard time for almost everyone, but it was especially hard on those of us in the staffing business; an industry that sells itself on the idea of a flexible workforce that’s easily shed in the event of an economic downturn.
So naturally, when the cards started falling, we sank faster than Bernie Madoff at a carnival dunk tank. I remember the cuts in hours and pay, the layoffs, cutbacks, and a sense of impending doom that didn't let up for at least a couple of years.
It was the opposite of fun, and it probably would have driven me to try to find another, more thriving line of work that didn't involve census taking or community organizing for Acorn – if only such a thing existed. Instead, I stuck it out, hoping for better days.
If times like that don’t make you appreciate your clients, I don’t know what will. I was a Branch Manager during those years, and it would be a mild understatement to say we were desperate for business… any (and I do mean any) business.
That’s not to say we staffed anything illegal or knowingly sent our people to near-certain injury or death in the salt mines (or a temp assignment at Citigroup), but when Jack the Plumber called and wanted someone
to help him unclog toilets for a couple of days, we signed up faster than a big bank at a stimulus money bailout. Friends, "hungry" doesn’t even describe it.
Fast forward to the "better times" of today...
Much like the pre-recession years, our staffers are so busy filling the needs of our medium and large clients that it hardly seems worth it these days to take time for the "onesies" and "twosies" of the world, much less the ones that aren’t going to last more than a couple of days. So naturally, we turn some of those down. And by the number of potential clients who call us having been referred by Kelly Services or Staffmark, the big boys feel the same way.
But, there’s still a part of me that always hesitates to turn down business, even more so now than before the recession. Maybe it’s the ingrained fear that comes from knowing what it’s like to be slow, or maybe it’s
just the desire to see the bottom line grow, but even the ‘onesies’ we turn down require careful consideration. We may not staff Dan the Handyman’s basement remodel, but we will staff an eight-week warehouse assignment or a month-long clerical fill-in at an established business.
After all, there is an upside to having a lot of tiny clients, and it’s more significant than you might think on first glance.
All your eggs aren’t in one basket – When the next recession hits, some of your smaller clients will certainly get hit too, but if you have 100 people at one client (versus 100 people spread across 35 different clients), and that one client gets hit, you’ll sink faster than an Enron stock option! Clients, like investments, are best diversified.
Small clients can quickly turn into big ones – That ‘onesie’ from the new company you’ve never heard of can quickly turn into two, then three, then five, then ten plus people before you know it. Until you’ve done a good deal of research, never,ever take a potential client for granted.
You can often charge a higher bill rate – No volume discounts. No power-trips by HR reps who, knowing they are your bread and butter, take their cue from the recession-era Fed and constantly lower your rates. If a company just needs one or two people, they are likely to be less concerned about mark-up and more concerned about quality and customer service – both of which you are great at!
There are some potential problems too, of course, that should be seriously considered. Imagine you are a medium, two staffer office with a client portfolio of 40 small clients.
Safety problems – It’s much more difficult, from a safety and workers compensation standpoint, for an office of a few people to adequately track 40 different clients. Especially given OSHA’s recently released new rules regarding temp agencies and safety, this can be problematic. Can we adequately ensure the safety of our temps in that many workplaces? Possibly, but it won’t be easy!
Customer service problems – Let’s face it, servicing ANY client is a LOT of work! Now multiply that by 40. You’ve got to process and keep up with 40 staffing agreements, 40 lines of credit, 40 HR managers who want your attention, and so on. Something is bound to fall through the cracks, and you can't exactly hire more people because each client is only providing a small profit.
Accounts payable problems – We all know small businesses are more likely to fail, so imagine dealing with 40 of them, any of which could go bust at any point. There won’t be any bailout money for them, and there definitely won’t be any for you!
Relationship problems – You’ve got so many clients that you don’t have the manpower or the time to build deep, lasting relationships with most of them, which can often be the key to keeping clients in a competitive dog-eat-dog industry like staffing.
The bottom line is, the advantages to having smaller clients can be rendered completely null by having too many and/or the wrong kind of client. Any staffing agency should carefully consider who they do business
with. There’s no clear-cut answer, but from an ideal business standpoint I think it’s probably good to have a healthy mix of large, medium, and a choice selection of small clients. These days, we’ll take some "onesies," but they definitely need to be the right kind of ‘onesie.’
Have you ever turned down a "onesie?" Upon what basis did you make your decision?