Can IT Staffing Firms Make More Money in 2016?
Given all the small IT staffing firms struggling to break through the $10 or $20 million annual revenue threshold, you would think there’s not much opportunity out there for businesses in this industry. Nothing could be farther from the truth.
If your firm is finding it difficult to close new business, expand your accounts, and have your entire sales team meet quota, it’s not because there’s no business to be had. It’s because there’s something wrong with how you hire, train, compensate, and enable your team to sell.
If you want to skip ahead to what you’re doing wrong, take a look at my new ebook for business owners and sales managers in the IT staffing industry, “The Top 4 Sales Mistakes Limiting the Revenue Growth of IT Staffing Firms.”
This blog answers the question, can IT staffing firms make more money in 2016? For now, let’s take a look at the numbers.
The Opportunity for IT Staffing Sales in 2016
One of the best assessments I’ve seen recently of the IT staffing industry is a December 2015 report by Staffing Industry Analysts.
“Staffing Industry Analysts estimates growth in the US market at 6% this year , and project a similar rate of growth in 2016, which would bring its scale to an all-time high of $28.9 billion,” the report says.
In fact, according to Staffing Industry Analysts, the problem in the IT staffing industry isn’t lack of growth. The problem is that there’s so much work to be had, there’s not enough talent to do it all.
“With a seventh straight year of healthy growth forecast for 2016, it’s no surprise that talent has become increasingly scarce.”
Recruiting is certainly a problem in IT staffing — and the staffing industry in general — but I’m here to talk about sales.
Too Many Firms Rely on Too Few Accounts
In a preview of its annual North American Staffing & Recruiting Trends Report, Bullhorn writes:
“The majority of respondents reported that their 2015 revenue was largely dependent on repeat business, so client retention is clearly still crucial in the staffing industry. Expanding the client base, on the other hand, has consistently been lower priority – up until now, at least. Reliance on repeat customers is becoming a resounding wake-up call for staffing firms. They need new clients and need to reach more candidates.”
Are you hearing the wake-up call?
After working with more than 300 IT staffing firms, my findings are similar to Bullhorn’s. This year represents a major opportunity for IT staffing firms, but only if they are able to expand beyond one or two key accounts and one or two top salespeople.
How can you make that happen? Get your free copy of my ebook to find out why so many IT staffing firms are forced to rely on one or two accounts and one or two top-performing salespeople for most of their revenue.
I would also be very interested to hear your thoughts on the opportunity for IT staffing firms to make money in 2016. Share your ideas in the comments section below.
About Dan Fisher
Dan Fisher is founder and owner of Menemsha Group, a provider of sales enablement solutions dedicated to helping IT staffing firms improve win rates, shorten their sales cycle, and increase revenue per sales rep. Since launching Menemsha Group in 2008, Dan has consulted with over 200 IT staffing firms and has invested over 5000 hours coaching IT staffing sales reps. He’s authored is his own proprietary sales methodology and has previously spoken at Staffing World, TechServe Alliance and Bullhorn Live 2012. Prior to launching Menemsha Group, Dan spent 16 years in the IT industry running local, regional and national sales teams. Dan worked for Kelly Services, Oracle Corporation and Alliance Consulting. Dan currently resides in Boston, Ma.