If your IT staffing company is feeling the impact of uncertainty among clients, prospective clients and other stakeholders, you\u2019re not alone and you\u2019re not imagining it. Faced with a murky macroeconomic picture and disruptive technologies advancing at a breakneck pace, the industry is feeling the effects with fewer job requirements, slower decision-making, and elongated sales cycles.<\/p>\n\n\n\n
TechServe Alliance CEO, Mark Roberts recently spoke with Ceipal CMO Andy Weiss to discuss the state of the industry and explore strategies firms can use to make it to the other side of the current market.<\/p>\n\n\n\n
A quick temperature check of participants during the recent exchange reveals their impression of the industry that is far less buoyant than a few years ago, using words like \u201cStagnant,\u201d \u201cSlow,\u201d and \u201cDisruptive.\u201d<\/p>\n\n\n\n
\u201cThere\u2019s a disconnect between some of the data and what our industry is experiencing,\u201d Roberts said. \u201cThe overall employment picture doesn\u2019t suggest weakness or that we\u2019re on the verge of recession, but our industry is seeing a lot of firms whose businesses are flat or generating anemic results.\u201d<\/p>\n\n\n\n
This squares well with chatter that Weiss has heard within the industry \u2014 \u201cChoppy,\u201d \u201cUncertain,\u201d and, again, \u201cStagnant.\u201d It\u2019s not just your firm, it\u2019s industry-wide \u2014 everyone seems to be holding their breath, not sure what comes next, and hesitant to make big moves.<\/p>\n\n\n\n
\u201cIt seems like the theme isn\u2019t whether we should continue playing in this market, but rather how we should play,\u201d Weiss said. \u201cWe need to ensure that we ride out this uncertainty and, as staffing firms, avoid turning it into a trough. Instead, we should focus on making it a dip\u2014something we can ride through by taking advantage of the opportunities it presents.\u201d<\/p>\n\n\n\n
When the next move is uncertain, it\u2019s never a bad play to focus on operational efficiency and productivity. Cutting costs can make all the difference when margins start to narrow. Weiss noted that higher-profit, better-performing firms tend to have lean expense structures. They also tend to emerge intact from rocky markets.<\/p>\n\n\n\n
\u201cThe brands that succeed through a downturn and come out more profitable and more successful are the ones that have maintained and grown that value piece while managing their bottom line,\u201d Weiss said.<\/p>\n\n\n\n
But operational efficiency has its limits. \u201cIt\u2019s not about cutting to the bone,\u201d Roberts said. \u201cSmart firms balance operational efficiency with being prepared for the upswing.\u201d<\/p>\n\n\n\n
There\u2019s no doubt about it \u2014 AI\u2019s potential has a lot of industries concerned about its long-term impact \u2014 the staffing industry is no different. While some see AI replacing people, others see it as a tool to make their existing workforce more productive.<\/p>\n\n\n\n
\u201cWhether we like it or not, [AI is] impacting our businesses positively and negatively,\u201d Weiss said. AI has in some cases begun to replace financial performance as the reason for layoffs and the reason for not hiring.<\/p>\n\n\n\n
Of course, no technology in recent memory has seen such a media buzz. AI has a role in cutting costs and automating repetitive tasks to help firms do more with fewer resources. Weiss was quick to point out that despite all of the hype, AI\u2019s impact is still limited so far \u2014 but with extraordinary potential in the future.<\/p>\n\n\n\n
So what\u2019s an IT staffing firm\u2019s leadership to do? Weiss discussed several potential strategies staffing firms could adopt to address an uncertain industry landscape.<\/p>\n\n\n\n
Companies and industries that fight disruptive technologies tend to lose. History has shown that the best way to weather an innovative disruption is to embrace the innovation, to become an early adopter. Firms that become early adopters of AI can leverage the technology to offer higher-value services than competitors.<\/p>\n\n\n\n
\u201cIf you remain static and don\u2019t embrace AI, you\u2019re at risk,\u201d Roberts said. \u201cIt has to be on every executive\u2019s agenda. Your competitors will be leveraging it, so you need to too.\u201d<\/p>\n\n\n\n
One of the best reasons to be an early adopter is that with a new technology, no firm has a clear historical advantage. \u201cWe\u2019re all kind of on this level playing field where no one really knows, no one has the crystal ball,\u201d Weiss said. \u201cThe experimentation, the willingness to try things, is really where the opportunity lies.\u201d<\/p>\n\n\n\n
\u201cWe\u2019ve seen this before\u2014firms that adopt and adapt to new technology, like AI, thrive,\u201d Roberts said. \u201cIt was true with job boards, and it will be true with AI too.\u201d<\/p>\n\n\n\n
Opportunities hide in every economic slowdown. Weiss suggested that firms use the lull to thoroughly examine their value chain and look for opportunities to optimize, trim fat, up their game, and open up new service vectors.<\/p>\n\n\n\n
\u201cThere\u2019s opportunity baked in here,\u201d Weiss said. \u201cThis downturn provides an opportunity for firms to re-evaluate, recalibrate, and position themselves for the upswing.\u201d<\/p>\n\n\n\n
\u201cSmart firms look for opportunities,\u201d Roberts said, \u201clike internal talent that may not have been available before or finding ways to diversify their services and move up the value chain.\u201d<\/p>\n\n\n\n
Weiss noted that many forces impacting an industry are cyclical \u2014 a temporary blip on the way to a return to business as usual. Other disruptions represent permanent structural industry changes.<\/p>\n\n\n\n
\u201cWe\u2019re seeing anemic demand driven in large part by uncertainty,\u201d Roberts said, \u201cbut there\u2019s also structural changes beginning to happen with technologies like AI. It\u2019s likely a combination, and we need to respond to both.\u201d<\/p>\n\n\n\n
Every industry faces periods where growth slows and there appear to be disruptive forces on the horizon. This isn\u2019t the first time, and it won\u2019t be the last. But that\u2019s no reason to sit on your hands. In the face of uncertainty, successful firms remain proactive. They move fast, embrace innovation, and sometimes break things and put them back together differently. While investing in the future, they also focus on efficiency and productivity in the near term \u2014 two mainstays of successful businesses.<\/p>\n\n\n\n
\u201cYou got to play,\u201d Weiss said. \u201cSitting on the sidelines is not the route forward. The more we try, the more we stay in the game, the better our chances are of riding this on through\u201d and being one of the winners on the other side.<\/p>\n\n\n\n
View the full webinar here<\/a>.<\/p>\n\n\n\n