Spend time with staffing providers and you will be hard-pressed to find a firm that isn’t struggling to find qualified candidates. And government figures back up the anecdotal evidence.
The US unemployment rate remains on a downward trend, hitting 3.8% in May — the most recent data available at the time of this writing — to tie the level from April 2000, the lowest since the 1960s. And the US Department of Labor reported that the number of available jobs in the US exceeded the number of job-seekers in both April and May.
So, what can staffing providers do to fill requisitions for contingent workers?
Some firms have developed creative programs that provide eager applicants with needed skills, building their own committed and qualified workforces. Although running these programs comes at a cost, it could be a small price to pay to keep that river of talent flowing into your talent pool.
The Last Mile
Private equity firm University Ventures is developing a portfolio of firms targeting the “school-to-work pathway.” The firm, launched in 2011, initially invested in companies that help universities take their degree programs online. However, in 2014, it shifted its focus to creating ways to place new grads in good first jobs in sectors of the economy that struggle to find skilled talent.
“Fundamentally, our thesis is that we don’t think the labor market is nearly as healthy as people think,” explains Managing Director Ryan Craig. While we’re reportedly at full employment, when you take into account the participation rate, underemployment, the number of displaced workers requiring upskilling, and wage growth, “basically what you see is a labor market where there are tens of millions of people out of position relative to where the jobs are. And no one feels that more keenly than staffing companies in areas like IT and healthcare, which are the fastest-growing sectors in the economy,” he says.
University Ventures’ “last-mile training” approach addresses the technical or digital training that is lacking in the postsecondary education system. For example, most entry-level sales jobs now seek Salesforce or CRM system skills; yet, according to Craig, only 10 universities in the country provide options for students to train on Salesforce.
Coding is another example. “There are hundreds of thousands of students in computer science degree programs; only a handful of those students are actually learning things like frameworks and [Java-based web application] Struts that entry-level developers will be expected to know and use from day-one in their jobs,” he says. “And not many US employers have a lot of patience for training.”
Last-mile training programs act as an intermediary between the education system and employers, providing candidates with the skills they need to succeed in their first post-grad jobs, while also providing employers with “friction free” talent acquisition solutions — they can evaluate the talent before committing to hiring the individual.
Participants receive a training wage while participating in the last-mile training programs and commit to work for a University Ventures firm as a contingent worker for a specified period following the training. Eventually, they may likely be hired as an employee of the firm they are placed in. It’s a smooth, tuition-free, debt-free pathway to a good first job in a growing sector of the economy, Craig asserts.
“We love this model,” he says. “We think it is applicable across a wide range of industries, and that staffing companies really occupy an important role in helping solve this problem. They really have their finger on the pulse of what their clients’ talent needs are. All they are missing is that ‘last-mile training’ piece, as well as the partnerships with the educational ecosystem.”
University Ventures’ last-mile training portfolio has grown to about 10 companies — from a handful of startups to firms with up to $100 million in revenue — all of which provide last-mile training programs.
The Next Gen
Revature, a University Ventures company, puts recent college graduates — those who are US citizens with four-year degrees in computer science or another STEM major — through 12-week immersive training programs and then contracts them out to clients. Training covers subjects such as Java full stack, .NET full stack, or data technologies. It includes “hands-on, hard-core coding so they can hit the ground running,” says Chief Sales Officer Bryan Howlin, and provides an attractive alternative to trying to secure H-1B visas. “We are building a next generation of technology talent for organizations,” he says.
In exchange for the immersive training, participants agree to work as a contractor through Revature for one year, and then as an employee of the Revature client for an additional year. The program, which is on track to graduate 1,500 this year, only accepts about 10% of applicants. Those who quit the program early must pay a financial penalty, but the in-depth screening process helps ensure this happens infrequently.
“You have to go through a pretty rigorous screening process,” Howlin explains. “We don’t want to bring a student in who then is not able to get through the program. They have to have the baseline aptitude to be able to get through our three months.”
In the past 12 months, Revature has signed enterprise contracts with several of the top financial services companies, a few of the world’s leading consulting organizations, and other Fortune 300 firms within the utilities, healthcare and technology sectors.
“They are all looking to figure out, ‘How do they address emerging talent in their organization?’” Howlin says.
Revature currently operates training locations at its corporate headquarters in Reston, Va.; University of South Florida; the City University of New York’s Queens University; and, most recently, West Virginia University. The company is developing more partnerships with universities, and Howlin expects future growth will be on college campuses.
The Adecco Group developed a new program that enables its client businesses to partner with local high school and college systems for contingent workers. Adecco serves as the bridge between the two. “We are really jumping into the ‘work-based learning’ model,” says Barrett Bridgewater, program manager, who helps lead Adecco’s contingent workforce training programs. “And what we are seeing is a willingness of the education systems to partner with businesses and get their students into internships, co-ops, apprenticeships, work experiences, all those type of things are under this umbrella of what we are calling ‘work-based learning.’” Providing a student studying a certain trade or skill set with the opportunity to concurrently work in that field makes learning “really stick,” Bridgewater explains. “That’s where we see some transformational type of learning opportunities.”
On the client side, Adecco connects the business with a school that already has established programs for the skills it needs. “We are placing everything from industrial, manufacturing, warehousing, to logistics to healthcare, even culinary students,” Bridgewater says. “There is lots of opportunity out there, and the education system is preparing students. They are an amazing source of talent.”
And as the partnerships develop, the companies themselves become magnets, attracting more students into the school program. “Education has a great opportunity to grow the pipeline,” Bridgewater says.
The program launched in Kentucky four years ago and expanded to Ohio last year. About 100 students currently participate. It boasts an 81% success rate — meaning the student either got a full-time job offer, enrolled in the next level of school to study in that trade, or continued through Adecco’s program after graduation.
“We are doing something that is really outside the box,” Bridgewater says. “We are helping organizations get ahead of the curve and helping students kickstart into the career field that they want to get into.”
MAU Workforce Solutions takes an internal approach to training, creating its own “skill school” to help solve its skills gap problem. “It was born out of frustration of the current market and our desire to solve the skills gap problem for our clients,” explains Adam Hatcher, VP of human capital and general counsel at the Augusta, Ga.-based firm.
The company, which places workers in many industrial manufacturing companies, leases an external facility in Greenville, SC, to provide on-the-job training for logistics staff. Launched in 2015, the skills school holds a customizable forklift course, allowing potential hires to train in an environment set up to represent that of the MAU client. It began as a multi-day training program to get workers with limited experience up to speed and afford a better chance at success when placed, and then expanded to include a fundamental course for those who have never driven a lift.
“The end game is to increase the pool of people who could show up day one, ready to perform the job safely,” Hatcher says. “We’ve got more capacity to do this and we are very excited to explore it.”
In addition to forklift operation, the curriculum includes basic workforce safety, soft skills and basic manufacturing knowledge.
“They come in and get evaluated for basic competency, and then we create a customized program to teach them how to drive a lift,” Hatcher says. “So, you can actually take someone who has never driven a lift before, add a new skill to them, and then put them into the workforce.”
MAU also provides training opportunities for its workers directly at client sites where it staffs multiple positions. This allows the contract workers to develop new skills, such as forklift operation, and then move into higher-paying roles. Some workers can gain 50% pay increases within six to 12 months of starting at a company, according to Hatcher.
“With the skill school and client sites together, we are putting hundreds and hundreds of people through a year,” Hatcher says. “And I might be underselling that number.”
HealthTrust Workforce Solutions, a wholly-owned subsidiary of HCA Healthcare, is the eighth-largest US healthcare staffing firm, according to Staffing Industry Analysts. It developed its StaRN program to address an environment in the southeast Florida market in which a plethora of large national firms and university systems found themselves on a merry-go-round with a short supply of nurses, repeatedly pilfering talent from each other with incentives such as seasonal and overtime bonus pay.
“The result was six people changed jobs, but hospitals were in exactly the same position they started in,” explains Anthony Pentangelo, executive VP of managed services at HealthTrust. At the same time, a large pool of new-graduate nurses existed that were underemployed or unemployed — a huge untapped market that only HealthTrust would be targeting. The company put together its StaRN curriculum that gets those grads to work at the bedside quicker, with the expectation to perform equal to a one-year experienced nurse. The curriculum is part of the HCA Nurse Residency Program in which new graduates obtain the necessary experience to be placed directly into affiliated hospitals.
Nurses in the program choose from a number of specialty track programs, which vary in length from 10 to 23 weeks. They are paid during training and commit to working for two years in the HCA network. If they leave early, a financial repayment is required. The program rolled out on a national scale in 2014, and has expanded its enrollment each year. In 2018, StaRN expects roughly 5,500 nurses in the program.
“The good news for us — it might not be the same message for the rest of my counterparts in the staffing world — is it reduces the need for contract labor in some markets where we have just not been able to fill critical vacancies,” Pentangelo says. “Having those full-time people trained and available allows us to work more on the flexing capabilities in the market rather than trying to fill core vacancies at the hospitals. From our perspective, it’s a win-win because we help the facilities fill their core needs and we can really use our staff for supplemental needs, which is what we were intended to do in the first place.”
Room for Improvement
Staffing Industry Analysts’ Temporary Worker Survey 2018 found the weakest area with respect to workers’ satisfaction with their staffing firm experience was training programs. Only 19% strongly agreed with the statement, “This staffing agency provides quality training programs.” The report noted while it is likely that while some temporary workers benefit from and appreciate training, it is perhaps less expected.
Additionally, 8% of the nearly 4,000 temporary workers surveyed from 37 staffing firms cited “lack of training, (I was) just thrown into it,” as the reason they quit assignments early. The contingent labor environment is, and has been, changing rapidly in many ways, and the industry is proving it can adjust and adapt to those changes. Training is imperative to ensure qualified talent at the ready. These firms have found innovative ways to provide it. What’s up your sleeve?