Feature Stories - July 2008

Industry Focus: Staffing Firms

Recently, a group of Nevada-based staffing firm executives gathered at Cili Restaurant in Las Vegas to discuss current challenges within the industry, including the recruitment of qualified candidates, out-of-state recruitment, generational issues and the impact of the economic downturn. Connie Brennan, publisher of Nevada Business Journal, served as moderator for NBJ’s monthly event that brings industry leaders together to discuss issues pertinent to their professions. Following is a condensed version of the roundtable discussion.

Recruiting Qualified Candidates

The participants discussed the candidate selection process. They said recruitment success depends on the type of job – temporary or full time. Their job is to make sure candidates have the matching qualities and skill sets requested by client companies. They agreed that finding qualified candidates for their clients is the biggest challenge they face.

Raven Watson: We are very selective about the candidates we represent, but it is still challenging because those who are unemployable are still going to walk in the door. Our biggest challenge is finding the qualified applicant as fast as possible, and then casually and professionally removing ourselves from the applicants that are not as qualified as we would like.

Robert Daniel: They may have good skills when you look at their résumé, but when you then interview them and give them a number of assessments, those skills are not reinforced. You really have to drill down and make sure that they have the right skill set. Finding that individual is my biggest challenge.

Brian Telfer: Although I think that the skill set for the people that have been moving here to Las Vegas has increased, it’s still hard to find that right person for the software development, job developers, professional placement positions, more on that side.

Cornelius Eason: Keep in mind, that there are two sets of constituents here: direct placement and temporary placement. Those are two separate and distinct markets. In the temporary world, most of the candidates are unemployed, seeking entry level work, or new to the state and trying to find their way into the employment market. In the direct placement world, the best candidates are the employees who don’t need jobs because you are going to move that skill set to another client.

Out-of-State Job Recruitment

Depending on the type of job staffing firms are recruiting, about 50 percent of recruitment is done out of the state. Many higher executive level jobs are relocation opportunities and the entry level jobs are done in Nevada. They said that booming industries require them to search out-of-state for candidates.

Carol Stieffermann: About 50 percent of job recruitment is out of state, depending on the niche. If I am looking to fill an accounting position, I would probably look more locally. If I am looking for CFO-level candidates, it would be a relocation opportunity and the company would pay the relocation fees. It depends again on the level of the candidate you’re recruiting and the niche that you’re recruiting for. We’ve done a lot of out-of-state recruiting for the construction industry. But for other niches, we look to local candidates.

Eason: As the new wave of gaming properties open, we will have a lot more out-of-state candidates, mostly from Southern California, Arizona and Utah.

Generational Issues

Staffing firm executives are also dealing with generational issues. One of their concerns was that Generation Y has a different work ethic which is difficult for many supervisors to work with. They agreed that this generation is in high demand and in return, is also demanding. Participants agreed that it is a challenge for baby boomers to relate to the younger workforce.

Daniel: When you look at generations in the workplace, it’s important to understand that Gen Y have a skill set that’s very much in need. They are tech savvy. They have been playing with computers since they could crawl and businesses want these individuals. But there’s “drama” in many situations associated with these individuals. It’s important to coach these individuals on how best they can fit into that environment. For example, they may come in and say, “I really like this job, but I need Thursday afternoons off.” If you tell them that you need them to work Thursday afternoons and they can’t have the day off, you run the risk of losing the employee to another company who will give them the afternoon off. This generation knows how to shop their skills – knowing they are in high demand. 

Linda Parven: One of the problems that we’ve seen with Generation Y is the way they present themselves. Many times they will show up for an interview displaying their tattoos and piercings. The people hiring them are of an older generation, therefore they don’t receive the same opportunity as someone who is more mature. We try to counsel and train these individuals on what is expected by employers.

Tom Haynie: One of the advantages of being in Las Vegas is that it’s a retirement destination. There are large numbers of retirees that come to the Valley who want to do something in their spare time. We can put them to work in a variety of different positions. They may be a relatively high-skilled, highly-trained individual willing to work in a lower-skilled, lower-paid position because they want something to do. This poses competition for the newer generation looking for the same type of jobs.

Worker’s Compensation

The roundtable participants discussed how rising insurance and worker’s compensation costs have affected the industry. They are concerned that staffing firms are seen as insurance companies for client companies as they are now footing the bill for more and more insurance.

Dehaven: The cost of worker’s compensation is increasing and companies are demanding more insurance coverage to do business with them. In many cases, the company wants the staffing firm to name them as one of the insured parties on the policy. So you actually become their insurance company for any liability that may happen on their property. Our goal is to step away from acting as our clients’ insurance company.

Haynie: If we’re not careful, we can be targets of worker’s comp fraud. First day on-the-job injuries and last day on-the-job injuries are very suspicious. We have to go in and analyze the client’s safety programs to see what they’ve done for safety improvements. We turn clients down because of the lack of safety for the employees because we don’t want our employees to get injured on the job. We don’t want our employees injured, nor do we want to pay the worker’s comp costs.

Eason: It’s called indemnification; it protects the client if any harm is done on a property. Government entities and large corporations are requesting indemnification agreements. I think most staffing firms around town are resisting contracts that have indemnification clauses inside of them because it just exposes them to whatever risks happen on the customer’s site. From that perspective, we are being selective about the opportunities that we take on.

Economic Impact

Participants agreed the slowdown in the economy has affected the staffing industry. Many valuable workers have moved out-of-state to find work since they couldn’t find employment in Nevada. The executives discussed the projects coming online and how they will impact the state’s economy.

Stieffermann: The number of valuable candidates who are moving out-of-state because of the slowdown is a huge concern. Currently, the economic condition of the state is definitely an issue. It hurts the state as a whole because I think we’re losing people. Some of my niches have been more in banking, homebuilding, commercial construction and development. Many people in these niches have not been able to find work and have moved out-of-state.

Eason: The challenge is that some of these Strip projects that are supposed to help the state’s economy aren’t going to happen. Those that do open might not be able to attract the customers that they did in the past because of the state of the economy across the country. A few years ago, a family could take $10,000 out of their home equity line to move to Las Vegas. But that isn’t available anymore due to foreclosures and tighter restrictions on bank and mortgage loans.