Duane Roberts asked

"Which way is the staffing market going? What does your crystal ball foresee?

There are two parts to this: cyclical recovery and structural shift.

You're catching the cyclical recovery.

The pain hit in the Bay Area first and hardest. Assuming nothing else changes, expect recovery to come here first and stronger. The queue of IT work comes from pent-up pressure on internal project queues, new business starts.

Then there's structural change:

Has anything fundamental changed over the last 12-24 months in terms of how hiring/buying decisions are made? What kinds of talent to fill first? What to outsource vs. fill in-house? Are there effective substitutes for local talent? Let me fumble with these a little bit.

Consumer behavior:

DICE.com, which had 500 thousand contractor listings in its hey-dey is down to 31 thousand. In the last two years, Monster and HotJobs/Yahoo have become more contractor-friendly while thousands of niche job boards popped up, dominating the left-handed BeOS sysadmin labor pool. TMP Monster knows the recovery is at hand, and they want contract ad dollars as much as perm dollars. One of their strategies is going direct to the cost-conscious hiring manager, substituting their putatively cheap advertising for a staffing firm's services.

Are the same people doing the hiring?

I don't know: you'll know before I will. My sense is that HR and procurement are trying to get their people out of the hiring conversation, pushing the work of selection to line managers.

Who's first to be hired?

That's hard. What serious work has been put off for too long? Plumbing and infrastructure (Security? Sysadmins? Telecom? Desktop OS upgrades?). How about those customer requests that wound up in the IT in basket, and that can hurt or help pending sales? I'm betting on ordinary priorities.

Perm vs. temp vs. outsource?

Budgets are iffy. You know the drill: until you are confident in your headcount, you fill IT projects with contractors or outsource the work. Look for foreign outsourcing when cost tops urgency or novelty.

Substitutes?

What tools or methods improve productivity so much, you don't need as many people to do the job? Not many jumped out in the last two years. Many web projects that were 2-3 person years a few years' ago are now turn-key. You can get a content management system for a thousand bucks from UserLand; it competes against systems costing 50-100 times as much including staff, and have it up and running in one day. How about a smart portal for your intranet or for each of your customers? Fast, cheap, and good from iCommunity.com. Complex apps like these are becoming commodities as they mature.

You can develop sales strategies for non-cyclical trends too.

The retirement of the baby boom (over the next ten years) can lead to contracting retirees back to their employers and new knowledge management efforts. California's budget shortfall (the next three years) will result in some stupid headcount cuts without removing the work; see some of this outsourced. The resurgence of defense and intelligence spending (the next ten years) will bid up demand for IT and other engineering supporting those efforts.

How will staffing firms respond to the upswing?

One wild guess.

Headhunters and staffing companies will behave more like talent agents.

• Drivers:
  • Bigger share of business from high payrate workers
  • Cost of recruiting high payrate workers driven down if you can place them more than once
• Notes:
  • At the biggest and best staffing companies, a temp works for 10 weeks, about 1 percent of their career. Wouldn't it be nice if you could represent them for 10 percent? Other strategies try to boost the average bill rate, cut operational costs, or reach new markets. This strategy says: serve the worker better and create returns on relationship.

How have job seekers changed? The burnt and shellshocked are still tender. Watch them pick security over ambition in their next job. It will be different for others...  

Many workers will reclaim power they thought lost in the 2001-2003 recession.

Watch who reads "Get a Raise in 7 Days" instead of "The Perfect Interview." We don't have one labor market, we have thousands. Some have structural shortages. We are short of nurses, policemen, soldiers, molecular engineers, and others in industries where long term demand is growing while (maybe because) baby boomers are retiring. These folks will assert power in the hiring relationship, sometimes alone, sometimes in groups.  

I am so completely and totally full of it, your vicious critique is both welcome and anticipated.

[aka staffing]