During a Healthcare Staffing Summit 2020 discussion our founder Tim Teague participated in, a question arose regarding direct sourcing and how temporary staffing agencies, MSPs and others that provide staffing services are handling their clients’ requests to assist in direct sourcing.
First it’s good to define direct sourcing. It is essentially the antithesis of outsourcing, a term we are all likely familiar with already. Direct sourcing is the practice of leveraging internal, or already present, talent pools in order to fill job/shift needs. These internal candidate pools could be float pools, prior applicants, retired FTE staff and the like.
This demonstrates a shift in demand from staffing contracts for only long-term placements to more flexible and immediate placements. Especially during 2020 and the ongoing viral outbreak, plus the inevitable increase of a senior-aged population and many other coalescing factors, it is apparent the demand for direct sourcing assistance or direct sourcing without a provider is not going to dwindle.
What does this mean for the current temporary staffing agency model?
Even if a candidate is result of direct sourcing, they are often still under the payroll of an external or third party. The opportunity is present in the market and by being a smaller company, you have an advantage that the industry giants do not: agility and flexibility.
Depending on your company’s business model, you may be already setup to make a strategic shift in contract development to meet this rising demand. A large barrier to addressing this shift, as a provider, is managing the scheduling necessities of a shorter term contract or even per diem placements.
Fortunately, there are current solutions to managing complex, healthcare staffing scheduling needs. We always recommend doing your research before picking a provider though, often the software you may find most convenient and affordable is owned by a direct competitor to your business. For example, ShiftWizard is now owned by HealthStream. Often when signing up with software providers owned by competitors, they have clauses in their terms of use that allow them to leverage your talent pool for their own purposes and growth. Our team will caution you to be weary and read the fine print.
The value of direct sourcing, permanent placement and the temporary staffing finances in a non-MSP agency should be reviewed.
As the elephant in the room, we should discuss pricing and strategy. Often temporary staffing agencies do not want to venture down the path to permanent placement or direct sourcing due to the financial losses that demonstrates when directly compared to the current temporary staffing business model.
As mentioned above, direct sourcing is not necessarily a threat to the temporary staffing business model since its still a talent pool that is leveraged under a third party payroll or provider. That naturally makes direct sourcing an additional talent pool concept and in itself a good opportunity to compete with an MSP that cannot flex their business model to accommodate this industry demand quickly. Don’t wait too long to consider this though, speed to market is still key and is the reason this opportunity has arisen.
Permanent placement is another story. This is a pretty big shift in a business model at first glance. However, imagine if instead of immediate perm-placement your temporary staffing agency offered a service model that allowed healthcare facilities to “trial” healthcare providers. (Of course the relationship is multi-directional, but as the source of demand we are focused on the healthcare system in this article.) Once the hospital or health system has determined they have a sustained need and a very capable placement, they would love the option to retain their candidate permanently. This flexibility will make you a competitive choice when working with facilities.
Short of providing dollar amounts and cost advice, our team has seen large fluctuations in placement fees this year. This data alludes to the increasing costs for your clients, and every time there’s a higher cost for a single product or service, alternatives are researched. Your staffing agency can be that alternative.
What else matters here?
If there is anything that makes your healthcare staffing agency more successful, it is going to be accurate and granular data from your recruiter workflow. Candidate sourcing work can add up and you likely already have a number for your burden costs.
From marketing, screening, interview time, competency testing and other cost factors, your pricing for temporary placement should differ from your permanent placement service costs. Having an accurate method to appraise the costs of each candidate will assist in pricing out a permanent placement contract, even if it is after the original placement contract.
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BlueSky is a provider of software in the healthcare staffing industry, has a unique perspective into the staffing process and decades of practical experience. Demo our software product today to learn more.
