We recently sat down with IBS Account Executive Paul Ferri to discuss the state of the IT staffing industry. With over 7 years’ experience in the field, we talk about his approach to the current market, where the industry is going, and how he builds relationships with current and new clients.
As an AE, what are some of the recent changes you have seen in the IT staffing field?
Paul Ferri: I think the biggest change I’ve seen in recent years is the fact that clients are becoming more restrictive about using vendor lists, and therefore limiting their contact directly with hiring managers. We used to have a lot more access than we do now. Basically we’re seeing a lot more VMS accounts. Or at the very least, we are seeing clients attempting to move to VMS.
What are some of the challenges in working with some of the VMS accounts?
PF: One of challenges that arise when everything is being funneled through a VMS, is that it limits your ability to work directly with hiring managers – it just creates an added layer. And the reality is a lot of the managers we work with, don’t particularly like the VMS’, but are forced to use them in order to fill their reqs.
Does this dynamic complicate things as far as placing candidates? Do end-clients sometimes end up with somebody who’s not quite right for the job?
PF: I think it does. Whenever you work with a VMS, you’re basically limiting the scope of what you can do. Sometimes, for example, you are limited in the number of candidates you can submit within a particular VMS system. You might only get 2 or 3 submittals per position, for instance. The other thing is that it limits the direct feedback from the hiring managers, making it difficult to follow up to see how a consultant is working out.
Are there any other recent changes you’ve noticed in the market outside of VMS?
PF: The biggest change I’ve noticed within the past two years or so, is the rollout of new products on the market related to AI in recruiting. There’s all kinds of new companies out there trying to pitch AI recruiting services. But, quite frankly, I think you cannot remove the human element out of recruiting.
When you have things like resume reading software, or systems that create percentage matches of candidates…when you’re eliminating humans reviewing resumes, discussing background, discussing fit, I think it only creates more problems in the long run.
I’ll give you an example: I have a client who works with a supposedly cutting edge AI recruiting software. To illustrate my point, I asked the manager to apply for his own job through their system. And the AI software came back and said that this particular manager was only a 22% match for his own position! So it illustrated my point that you cannot rely on technology to vet and place people—there has to be a human element. Practically anybody can match skillsets, it’s the easiest thing we do. But matching cultural fits, matching environments—that’s our value add.
What are your clients looking for these days? Any type of specific business solution, employee skillset or job role?
PF: I think in the last year or two we’ve definitely seen more activity in the security space, as data breaches and things of that nature are becoming more common. No company wants to be in the news for a massive data breach, so we’re certainly seeing more investment of the security side.
How do you go about managing client expectations? Is that talent crunch real? And if so, how does that impact how you work with your clients?
The talent shortage is absolutely real, especially in a market like Cincinnati. If you were to look at generic job postings in this area—there are nearly 3000 open IT positions—ranging from CIO to a Help Desk person, and everything else in between.
A couple different things are impacted by that: For one, the leverage shifts to the candidate, in terms of salary requirements etc. In terms of how we manage client expectations: we have to make sure they understand the market and the fact that it’s a highly competitive landscape. Sometimes we have to have a tough conversation with our clients that, quite frankly, they might not be offering a competitive rate for a particular market or position. Basically, we have to do a lot of client educating on the account side of things.
Do you have any predictions for the industry as whole going into 2020?
PF: I think the market is only going to grow. We’re pretty late in 2019 right now, and we’ve gotten a look at some organizations’ upcoming budgets. A lot of our clients have already done their strategic planning for 2020, and we’re seeing increased investments in the IT space.
It’s a huge shift in mentality. 15 or 20 years ago, companies viewed their IT departments as an expense: They have these IT guys, they cost a lot of money, but we have to have them etc. Nowadays, companies are beginning to see the value of a strong IT team strategically, and how it can help them grow the business long-term. So essentially when you shift that mentality and stop viewing IT as an expense, and start looking at IT as asset, it only benefits your business.
That makes sense. I actually saw some statistic recently that said the software industry indirectly supports roughly 14 Million jobs…
PF: Exactly. And what we are starting to see, especially when it comes to the larger organizations, is that a lot of the people at the C-suite level are coming from an IT background; not your traditional finance, accounting or business backgrounds. That’s because IT touches nearly every aspect of your business. Your IT team understands your sales, your marketing, and your process. They understand every single part of your company, regardless of what that company actually is. You could be a hospital system, you could be bank, and it doesn’t matter: IT directly impacts every aspect of your business.
In your view, how does IBS differ from other IT staffing companies?
PF: The biggest differentiator I see is IBS’ long, demonstrated history of success. The unique thing about the IT staffing industry is that there is no barrier to entry. Anybody with a phone, a computer and 100 dollars to file an LLC, can start their own staffing company tomorrow.
So what we’re seeing as a result is the emergence of multiple new staffing companies, even right here in Cincinnati, which leads to increased competition. But I look at this as a positive: Because it gives us a chance to set ourselves apart. If I meet a new client or a potential customer who isn’t entirely familiar with us, then I have an opportunity to tell the story of IBS, and the fact that we have been around for nearly 4 decades. And within the local market, we’ve been working with some our clients for 15 to 20 years. Our clients understand that we’re not just one of these “fly by night” companies being run out of a basement. Our clients understand the value and longevity of what we do.
And on a personal level, as an AE, I benefit from these long term relationships IBS has built. For example, one of the IT directors we work with on a weekly basis, was placed as an IBS contractor 9 years ago in a relatively low level positon. But they’ve managed to climb the ladder of their company to run IT, and they remember that IBS were the people that got them hired. We get to benefit from these long-term relationships, and that’s something you can’t just do if you’ve only been around a year or two.
Another differentiator is how we handle our internal hiring. A lot of these staffing firms are “churn and burn” shops. It’s people working their first job out of college trying out recruiting to see if they like it or not and perhaps move on to something else. IBS’ recruiters, though, are true professionals—this is what they do for a living. As a result, they understand the market and the technologies, throughout the years cultivating deep pipelines of local talent. That’s what sets us apart.