While the East Coast was dealing with Hurricane Sandy, I realized a different kind of storm has been taking shape within IT staffing. It was when I was attending the National Minority Supplier Development Council conference in Denver.
On the second day of the conference was a trade show of sorts where buyer organizations could rent booth space and promote their supplier diversity initiatives. Hundreds of IT staffing representatives were clamoring for these organizations’ attention.
Many of my own customers were in attendance, along with all major staffing organizations and MSPs and their customers and my extended customers’ major brands across multiple industries. That was when I realized I was in the midst of a major storm, The IT Staffing Commoditization storm.
Throughout the day, I heard from major customers things like, “If I never signed up another IT staffing supplier I would be just fine.” or “I have 250 IT staffing firms that would like to do business with that client.” If those sentiments aren’t enough, consider this: one of my clients pulled out a list of some 75 IT staffing firms that had approached it throughout the eight-hour event. That averages to more than one firm every seven minutes.
As someone who strives to differentiate my firm every day, this experience was truly indicative of the saturation in the space and the shear amount of competition that conceivably exists in it. It leaves little wonder why we have experienced margin compression that seems to have gotten to the point of ridiculous and MSPs continue to rationalize their supply in support of the customers’ less than meaningful scorecards.
Can you find differentiation and value as an IT staffing supplier? None of this, from my vantage point, is hard to answer but the answers don’t address this storm. This storm seems to be perpetual because this business has become entirely tactical and based on the transaction, devaluing what we offer. The firm that wins is the one with the best transactional process, not necessarily the best supply of talent — which is diametrically opposed to what the buyer is actually asking for.
It is incumbent on the community of suppliers to change this if we have any chance of coming through the commodity storm; if we don’t address this, margin compression will continue.
Until then, some of us have chosen to expand our subject matter capabilities and to innovate new processes in the way we deliver our supply so we can tell the next prospective customer we do IT staffing but we also do engineering, finance, marketing and have a unique specialization in non-commodity disciplines.
Then there’s the next shiny object that corporations are interested in: talent supply that is supporting the social media technologies. Maybe next year this will have spawned a new storm for me to write about.