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Are staffing companies starting to compete with consulting companies? And do they stand a chance?

Traditionally there’s been a big gap between the roles of consultancies and staffing agencies. It is the consultancies that provide the insight, experience and know-how to manage the delivery of projects but often at a significant price. Staffing agencies have been the source of contractors as and when they’re needed and usually at much lower day rates.

So what’s the realistic opportunity for staffing companies to make inroads into the consultancy sector?

There is certainly a need for staffing agencies to consider other options. The pressure on margins within the staffing agency business is certainly forcing a rethink as channels such as LinkedIn are allowing companies to directly access the technical skills they need without involving agencies.

However, can they put together teams of contractors to provide the project management, technical and delivery skills that end-users need? The biggest plus point they have in their favor is that they have access to a far bigger pool of talent than consultancies traditionally do.

Certainly from some conversations I’ve had, this is a positive point in favor of staffing agencies. Those that are smarter and more fleet-of-foot recognize that they have access to the range of skills they need at a rate which makes their services highly competitive. However, it takes more than just the right resource to deliver a successful project profitably.

Particularly if they’re focusing on fixed priced work, it’s vital they have the management skills to plan carefully the resource they require to ensure they are delivering the quality of services required at a rate that remains profitable for their business.

And this is their major negative. The culture of a staffing agency is to deliver ‘bums on seats’ so to speak. A consultancy builds a client relationship, identifies clear objectives, manages the project to achieve those objectives and knows how to do it at a profit.

So how can a staffing agency compete? They need to adapt and change – and quickly – if they’re going to challenge the preserve of the consultancy. To do that they need the information and management tools to apply the skills that consultancies have been using to great effect for decades.

That’s why we’re now finding staffing agencies talking to us about the systems that are routinely used in the consultancy world. They need to measure accurately the time being spent, and at what cost, so that they can make the necessary management decisions to run projects effectively and profitably.

So can they compete?

They need to match their ambitions in exploring new markets with a newfound maturity in the way they manage their businesses. Only in this way will they stand a chance of being truly competitive.

Mark Robinson, CMO, Kimble