Many staffing firms grow to a point, and then stop. For a large segment of staffing companies in competitive markets, “$10 million in revenue is a ceiling,” says Tom Erb, CSP, president of national staffing consulting and training firm Tallan Resources. “They hit that number and they don’t have an organizational structure that allows them to grow beyond that size. There are not enough layers, it’s a flat structure usually led by the founder and the owner who in many cases are much more operationally focused.”
Growth isn’t just about landing new clients and feeding the talent pipeline. It’s about building a business infrastructure. “Staffing firms need a scalable organization,” Erb adds. How to build that? It starts by parsing the key functions of the staffing enterprise—the five main business functions that drive the operations.
“From the front to the back, they need a new business development engine and they need candidate intake—a steady pipeline of new talent,” Erb says. “They need to maximize the opportunities with the candidates they bring in, as well as the employees they have on assignment. Then there’s developing, maintaining, and growing client relationships. Finally, they need strong back-office operations, making sure they can process payroll and get the billing correct.”
A deeper organizational structure will align with these key functions. “You need siloed responsibilities, where people are working on specific parts of the business rather than having everybody do a little bit of everything,” Erb notes. “The first step is to better define and segment those responsibilities: candidate intake, employee relations, client relations, new business development. Once that is segmented out, then you can figure out what positions you need, whether that is directors of recruiting, directors of sales, back-office controllers, or COOs.”
With a solid infrastructure in place, staffing firms can achieve the organizational scalability needed to support and maintain growth for the long term.