Staffing Industry
October 17, 2023

Topic Tuesday: New Healthcare MSPs, Corporate Expansions, Ratings and Referrals Platforms, Freelancer Growth

A brief glimpse at this week’s trending staffing topics and news items reveals a few themes that could illustrate how the economic and business landscape of the industry will play out during the close of 2023 and beginning of the new year. Among the key takeaways are the evolving nature of healthcare MSPs, acquisitions and expansions, leveraging ratings and referral platforms to increase performance, and the continuing boom of freelancers in the market, along with the factors influencing that growth. Let’s take a look at what’s going on. 

Healthcare MSPs: Master Vendor vs. Vendor Neutral

Fusion Medical Staffing, a top 15 healthcare staffing agency based in Omaha, Nebraska, announced its rebranding to Fusion, “an all-encompassing parent or corporate brand,” according to the article published in the Omaha World Herald. “Fusion will serve as an umbrella or corporate brand to connect and unify its two business units, Fusion Medical Staffing and Fusion Workforce Solutions, for its many audiences.”

As Chief Marketing Officer Tara Sprakel explained in the story, “This new corporate brand development and business brand alignment reflects our growth and clearly connects the diverse solutions that help healthcare travelers and facilities in our pursuit of positively impacting the lives of everyone we touch.”

In this two-tiered approach, Fusion is essentially offering a master vendor model aimed at travelers. Fusion Medical Staffing connects healthcare travelers to open positions in facilities across the country, while Fusion Workforce Solutions acts as the intermediary that manages the traveler workforce, and perhaps other vendors, for clients. 

Fusion’s rebrand demonstrates the theme of consolidation we’re seeing more often. Companies are acquiring others to expand their candidate pools, coverage capabilities, and footprints. Large enterprises are trying to find ways of combining their offerings to exert greater control over their competition, branding, and presence at scale. According to a 2022 survey by Staffing Industry Analysts (SIA), 56% of MSPs said that they were moving more toward master vendor models. This is up from 45% in 2020. Many analysts expect that trend to continue, due in part to a few factors.

  • Cost savings: Master vendor arrangements may offer cost savings for clients, as they can negotiate lower rates with a single supplier.
  • Reduced administrative burden: Master vendor arrangements can reduce the administrative burden for clients, as they only need to manage a single relationship with their MSP.
  • Improved efficiency: Master vendor arrangements can lead to improved efficiency, as the MSP has a better understanding of the client's business and needs.
  • Greater control: Master vendor arrangements can give clients greater control over their contingent workforce program, as they have a single point of contact for all of their staffing needs.

However, there are potential drawbacks to master vendor arrangements.

  • Reduced competition: Master vendor arrangements can reduce competition among staffing suppliers, which could lead to higher prices and lower quality services.
  • Lack of flexibility: Master vendor arrangements can be less flexible than vendor neutral arrangements, as the client is locked into a contract with a single supplier.
  • Reduced innovation: Master vendor arrangements can stifle innovation, as the MSP is less likely to invest in new technology and services if it has a monopoly on the client's business.

It’s an interesting shift given that the much-touted boon of early MSPs was their stance on vendor neutrality. And while the same SIA survey claimed that 75% of clients expressed satisfaction with their master vendor programs, it does beg the question, “Are they happier because master vendor engagements have increased their cost savings and productivity, or do they not know what they could be missing out on?” As we wrote in our article about the importance of introducing new suppliers into Life Sciences MSP programs, a group of small and tenured suppliers could contribute to sacrifices in performance and innovation.

While experienced suppliers or static supply bases bring stability and familiarity to the program, there are setbacks to relying on them exclusively. 

  • Stagnation and complacency: These suppliers may become complacent due to their long-standing relationships with the company. They may not feel the need to innovate, improve their services, or stay competitive in terms of pricing and quality.
  • Limited perspectives: Long-term suppliers might become entrenched in their ways of doing things, which can limit the introduction of fresh ideas and innovative solutions. Newer suppliers often bring different perspectives and approaches that can lead to process improvements and cost savings.
  • Decreased cost competitiveness: Over time, static supply chains may become less price-competitive because they are confident in their position within the program. This can lead to higher costs for the staffing company, which could be mitigated by exploring new suppliers with more competitive pricing structures.
  • Risk of dependency: Relying solely on tenured or dedicated suppliers can create a dependency that poses risks if one of these suppliers faces financial instability or other issues. Diversifying the supplier base by considering newer suppliers can reduce this dependency and associated risks.
  • Limited access to emerging technologies: The staffing industry is constantly evolving with new technologies and tools that can enhance efficiency and effectiveness. Entrenched suppliers may not be as quick to adopt these technologies, potentially putting the staffing company at a disadvantage in terms of innovation and competitiveness.

Meanwhile, another new healthcare MSP is rolling out — and WorkVi is all about vendor neutrality. The company's mission is to “revolutionize healthcare workforce solutions with smart programs that can flex and grow as needs change. We solve today’s healthcare staffing and recruitment challenges for internal and external workers while creating scalable solutions for the future.” 

WorkVi offers pure-play, vendor-neutral workforce solutions for all categories of healthcare talent; the MSP does not recruit to fill orders itself. Instead, it curates local, specialized vendor panels to ensure a successful experience for everyone. WorkVi is also technology-agnostic and brings automation to support its programs. “That includes worker scheduling—enabling people to easily manage their schedule—while also providing visibility into worker locations, gaps in shifts, time and expense reporting, and so much more.”

In many ways, WorkVi’s philosophy marks a return to the glory days of MSPs, when solutions were modular and designed for scalability. The company believes this retooled approach, bolstered by modern technologies and best practices, will lead to new efficiencies, cost savings, and solutions to obtain the best healthcare talent, across all worker categories.

Eliassen Group Expands Midwest Presence with Acquisition of Talent Plus

Earlier this month, Eliassen Group announced its acquisition of SafeNet Consulting to “provide Eliassen Group clients with a wider range of services and access to an even greater professional network of proven candidate talent and experience. Furthermore, the acquisition of SafeNet aligns with Eliassen Group's ongoing focus on transformational growth and enhancing the client and consultant experience with an expansion of its Midwest presence.”

Overall, the staffing industry is undergoing a period of significant change. Mergers and acquisitions (M&A) are becoming more common and reflect a response to fluctuations in the industry. M&A is likely to continue playing a role in the industry moving forward. The strategic partnership between Eliassen and SafeNet — both well respected and seasoned organizations that specialize in technology, financial, risk & compliance, and advisory solutions — indicates that more staffing enterprises may embrace higher levels of M&A activity in the coming year. Some of the key drivers include the following.

  • Consolidation of the industry: The staffing industry is highly fragmented, with a large number of small and medium-sized businesses. M&A can help larger firms consolidate their position and gain a competitive advantage by offering a wider range of services and reaching a larger customer base.
  • Access to new markets and industries: M&A can also help staffing companies expand into new markets and industries. For example, a staffing firm that specializes in IT staffing may acquire a firm that specializes in healthcare staffing to gain access to the healthcare market.
  • Acquisition of new technologies and capabilities: M&A can also be used to acquire new technologies and capabilities. For example, a staffing firm may acquire a firm that has developed a new recruiting platform.
  • Attracting and retaining top talent: M&A can also help staffing companies attract and retain top talent. By offering employees the opportunity to work for a larger and more established firm, staffing companies can make themselves more attractive to potential employees.

In addition to these general drivers, there are a number of specific factors that are contributing to the increase in M&A activity in the staffing industry. 

  • The rise of the gig economy: The gig economy is creating a growing demand for staffing services. As more and more businesses are hiring workers on a temporary or contract basis, staffing companies are playing an increasingly important role.
  • The aging workforce: The aging workforce is also creating a demand for staffing services. As baby boomers retire, businesses are having to find new ways to fill their open positions. Staffing companies can help businesses find the qualified workers they need to operate and grow.
  • The increasing globalization of the economy: The increasing globalization of the economy is also driving M&A activity in the staffing industry. Staffing companies are expanding into new countries to meet the needs of their global clients.

Ratings and Referral Platforms

New Recruiter Rating System from ClearlyRated

ClearlyRated has launched Amplify Recruiters, a new tool that “gives recruiters a stage that helps them get the recognition they deserve and provides support to make their job faster, easier, and more connected. Amplify Recruiters also enables a business to own and manage recruitment profiles for the entire company, a feature that doesn’t exist in the market.”

Amplify Recruiters relies on a customizable profile page that lives on ClearlyRated’s staffing and recruiting services directory. Recruiters receive verified, individual ratings they can leverage to highlight their careers, specializations, job openings, accolades, and awards. 

According to the press release, “Amplify Recruiters integrates with a business’s satisfaction survey response data and gives recruiters and their firms an unmatched ability to manage their candidate, client, and employee experience, as well as their brand's online reputation, all on one platform.”

Staffing Referrals Launches Industry-First Client Referral Feature to Help Agencies Drive New Business.

Yahoo Finance featured a piece on Staffing Referrals, which is “launching a new Client Referral feature to help agencies increase their job orders. With this feature, Staffing Referrals becomes the only complete end-to-end referral automation platform designed for agencies to get more customers as well as more candidates.”

Staffing Referrals’ value proposition is that the platform can help transform talent pools into a competitive advantage “by turning the contractors they work with into brand ambassadors who refer their family, friends, and colleagues for jobs. The new Client Referrals feature allows these agencies to leverage their unique ambassador networks even further to grow their book of business.” The company claims that the new service can provide increased benefits to staffing agencies through sales growth, productivity, and user experiences.

  • Grow sales: Get access to job orders that only your network knows about
  • Increase productivity: Automate the ask for new client referrals
  • Improve ambassador experience: Provide transparency with real-time referral tracking

The interesting correlation between ClearlyRated’s Amplify Recruiters and Staffing Referrals’ Client Referral platforms is that both seem grounded in cultivating more visible and more compelling brand recognition for staffing agencies and their recruiters. This is perhaps in response to the rising adoption of AI large language models like ChatGPT, which pose complex situations for recruiting professionals: on one hand, automation can increase their performance and allow them to focus on core skills; on the other hand, these systems also risk making recruiters anonymous or obsolete, depending on how organizations choose to utilize them. 

In its product announcement, ClearlyRated basically called this out: “In a world where AI-generated profiles proliferate social media, the need for a source that is validated and delivers a reliable professional reputation rating is greater than ever. ClearlyRated has been a trusted provider of satisfaction surveys to B2B service firms for over two decades and with this new tool expands its services to recruiters.”

Freelancers Surge as Marketers Face Layoffs, Reject Office Return

The gig economy and freelance workforce continue to grow rapidly, with more and more people choosing to work on a freelance or contract basis. This trend is being driven by a number of factors, including the rise of the digital economy, the desire for more flexibility and control over work-life balance, and the growing demand for specialized skills and expertise. New research from Fiverr Pro seems to back up that assertion. 

Marketing Leaders Have Slashed Their Full-time Workforce

“The research shows that a staggering 85% of marketing leaders surveyed conducted layoffs this year or last year, resulting in a loss of various skills, with the top three being Marketing Manager (37%), Digital Marketing (31%), and Market Research (30%),” Fiverr pointed out. “Of the marketing leaders who conducted layoffs, 83% turned to freelancers for specific expertise that was lost.”

When it comes to why freelancers were brought in, the top reasons were to support full-time employees (63%), support specific projects (57%), and benefit from new skills (56%). As a result, 74% of full-time and part-time employees say they felt supported by the freelancers their companies brought in the last year, demonstrating that freelance talent is a solution that benefits both marketing leaders and employees.

But instability in the economy and persistent inflation, which contribute to layoffs, weren’t the only contributing factors. Huge conflicts between managers and workers over return to the office (RTO) mandates could be a more pressing issue. 

Conflict between Managers and Employees Over RTO

“When it comes to RTO, 95% of surveyed marketing leaders have RTO policies in place, and 85% of them believe in the RTO policy they are enforcing,” Fiverr reported. “In fact, 62% of marketing leaders say that employee response to the RTO policy has been positive. However, 61% of full-time or part-time marketing professionals have looked at freelance opportunities because of their current employer’s RTO policy. The difference in these responses reveals a disconnect between the marketing leaders and their employees.”

RTO isn’t just hampering retention, it’s also impeding recruitment efforts. “The survey revealed the majority of marketing professionals (53%) would not consider applying for a job if it required them to be in the office full-time or even part-time, citing flexibility (53%) and commuting time (43%) as the top reasons,” according to Fiverr. 

Tying It All Up

As 2024 nears, these topics could evolve into trends that define the new year. No real surprises, but it seems reasonable to expect more movement in the areas of MSPs trying to reassert and reinvent themselves in life sciences and healthcare, M&A activity among larger staffing enterprises, preserving human brands and advantages as AI grows in popularity, and a rise in gig work as economic instability continues.

Photo by Markus Winkler on Unsplash

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