Staffing Industry Spotlight: Kim Henderson, Managing Director of Cobalt Compass Solutions

Staffing Industry Spotlight is an interview series that highlights influential leaders reshaping the staffing industry. This series is presented by Ascen, an all-in-one employer of record and back-office platform tailored for staffing agencies. In this edition, we spoke with Kim Henderson, MBA, PMP, Six Sigma, Managing Director of Cobalt Compass, a training solutions provider for the staffing industry. Kim shared her journey from executive leadership at a national staffing firm to co-founding a $100 million agency and eventually launching Cobalt Compass. She dives into key strategies for finding a staffing niche, the importance of specialization, and leveraging statement of work (SOW) models. Kim also offers practical insights on transforming client relationships into strategic partnerships and positioning new firms for sustainable growth in a competitive landscape.

Francis Larson:

Kim Henderson, thank you so much for being on the Staffing Industry Spotlight Series. To start, we'd love to hear about who you are and what you do.

Kim Henderson:

Thanks for inviting me in. I'm excited to be here today and talk about everything staffing with you. I am the Director of Cobalt Compass and what we do is provide training services to the staffing industry. Before that, I've spent really my entire adult working career in the industry. Worked for a large national all the way from sales and recruiting up to executive leadership and then a group of us broke off and started our own staffing company. We built that right up to just about $100 million and then we sold that to a UK-based staffing firm.

I stayed around after that for many years because I really wanted that international business experience and staffing. Then ultimately after that, formed Cobalt Compass to serve the staffing industry and bundle up everything that I had learned over the years, the good and the bad, and see if we can help people get trained up and move faster and get successful more quickly in the business by learning the right way and the right mechanics.

Francis Larson:

Learning from all your experience—in a couple of big firms and then your own firm--what kind of staffing were you doing? Was it a generalist? Did you have a particular area where you focused on?

Kim Henderson:

The vast majority of it was IT, probably about 90%, and then throughout time, throughout the years, there was finance and accounting spread in there as well. Personally, my background is probably about 90% contract staffing, contract to hire, statement of work, also working with the large MSPs. I did a little bit of Permanent placement work here and there, but specifically when you're working for a large staffing company, it's all about that forecast for revenue. Especially for us when we were building ours for sale, it's all about building that contract business. So, you actually have something to sell. So, heavy contract background in IT.

Francis Larson:

I know from some of your other written material out there, you've done a little bit of government work and that was a focus at some point.

Kim Henderson:

When the partners and I broke off to form that business, my charter was to go and build a government solutions division and then ultimately really didn't know a whole lot about government other than don't like paying taxes. So, I had to quickly learn, you can't go down rabbit holes because you can burn a lot of time and energy. I had to go and capitalize on that business and get contractors billable quickly.

Then ultimately, that team spread as I grew it and added to it other industries and grew into large national accounts in addition to government solutions. So, we did quite a bit of work with the integrators, like General Dynamics, Northrop Grumman, those type of companies. Then it just expanded by adding large enterprise-type accounts.

Francis Larson:

So not directly a prime with the US government for instance, more with the integrators, the prime vendors, and subcontracting for that.

Kim Henderson:

Absolutely. What I found pretty quickly is if you're a staffing company and a smaller one at that, you're not equipped to go direct to the government and understand all the government, FAR and DFAR, and how to navigate, nor are you probably going to even win any of those prime contracts. What I found was it was a better niche to go and let the primes go win the contract and they turn around and say, "Wow, we don't have the people. We need these Java developers and business analysts to go and support our initiative," because they're not generating revenue off the contract unless they have billable heads in the seat.

So, they'd come to us and we would fill those and it was a much better business model, not only for them but for us as well. We just weren't equipped to go and be direct like many staffing companies probably wouldn't be.

Francis Larson:

Yeah, and it seems like, you mentioned rabbit hole, trying to go direct is probably the wrong decision for most staffing firms. I'm curious. So, government integrators, do you think that is somewhat similar to working with MSPs, managed service providers?

Kim Henderson:

It was definitely, I would say, different because if you look at it, let's say you're going to go sell to an HP Federal, you really would approach them the same way that you would a lot of your other customers, although you would approach from the standpoint of, "Hey, we know this space, we're industry specialists in government, we understand the nuances, the regulation, the legislation that you guys are held to and you don't have to train us. We already know it so we can deliver and here are our results in that space." Typically, you had direct contact with all the hiring leadership, so very different than an MSP. As you and I both know working with an MSP, sometimes you've got to go through the onsite team.

You've got to figure out how to work with them, and then sometimes, for lack of a better word, circumvent them to be able to get directly to the hiring managers to move the needle. So, it was definitely different than working with an MSP. We were fortunate that there weren't too many MSPs in place at that time at those big integrators. There were some that had MSPs, but side-by-side, concurrent to that, the MSP didn't really control the process. You could still talk to hiring managers. They were still doing statement work outside of the MSP, so that was great. The MSP didn't have a chokehold on it.

Francis Larson:

Yeah, I suspect that, and it makes sense in some ways because the integrator is probably so used to subcontracting that they don't need the MSP to contract work out.

Kim Henderson:

Good point. Yeah, they have many subs to your point. You're right, good observation.

Francis Larson:

Definitely an interesting market to get into. So, that was your focus, that new firm, it was focused on government. Talk about finding your niche, your specialty as a staffing firm. You all found government as a big area. How does a staffing firm come to that? Is it just something where you work for a Kforce and you learn their business and that's your niche, or is it a self-discovery where it's like, "I like government. I really want to work with government"? How do you go about finding your specialty as a staffing agency?

Kim Henderson:

I'm glad you asked that question. It's a great question. I did work for Kforce at the very start of my career. That's the national that I worked for. I think that in terms of finding your niche, you have to today because the days of the staffing generalist are gone. If we're a generalist and we try to be all things to all people and spread ourselves, jack of all trades, we just get commoditized, put in that bucket, and then what happens? Then our pricing goes down and it's a race to the bottom. So, what I found really helped me and helped my teams is, to your point, picking industries.

I think it all comes back to your capability. What's your strong suit? Is your capability IT and is it finding Java developers or is it finding this specialized RF engineers type situation where you would say, "Telecommunications, they use RF engineers quite a bit. I have quite an inventory of these people. Let me go and pitch that to them because we know that that's an in demand skill"? So I think it comes down to we have to be specialists. We need to be a student of their industry. We need to understand it, but you need to understand yourself. Where can you be successful?

Also, from a geography standpoint because lot of us can't deliver in every city in the nation. Where you can build pipeline, where you can go and fill jobs quickly. As you and I both know, Francis, that contract staffing is like just in time staffing. If you have to go and recruit, you're losing, right? You need to have that inventory ready to go. So, I think it comes down to looking at your strong suits, your capabilities, where do you excel, what skill sets, what locations, what pricing model, what model do you thrive in? And then that way aiming it toward a particular industry. I know staffing companies that started out in telecommunications because they just found this niche in RF engineers and candidates like that.

So, they doubled down and got a name in telecom. Then they started to spread their wings and started to do more traditional IT type of work, which is usually what happens, but I'd say that those are the factors to look at. Evaluate yourself and your company and where you know that you've got the strengths. Don't kid yourself. If you think that you're going to chase Oracle business and you've never recruited or you're not successful finding Oracle e-business suite type individuals, don't do it because you're probably going to crash and burn. You may not get that second chance.

Francis Larson:

It's such an interesting way to think about it from a capability standpoint. Something you also said, and you mentioned this again, but you mentioned it in terms of government was like working with government, you could tell the government integrators, "Hey, we know your business. We have credibility because we understand you, because we focus on this." Is that a thing for the client? They can probably hear the words you use. They see that you're working with their competitors. It sounds like it's not just capability, there's also a credibility side as well.

Kim Henderson:

You hit the nail on the head. It's about being able to go to them and show results and impact that you've had for other similar clients within that industry with similar problems. To your point, that integrator space, one of their big challenges was finding cleared people and we had the capability. We went and had a facility clearance. So, I was able to explain how not only can we recruit those people and hold their clearance so they can use it while you have more assignments, but we can also find people from scratch and get them cleared. That was a huge differentiator. Then being able to go and depict success stories and results of other similar clients. Hey, we're working with X, Y, Z integrator. We have 32 secret clearance, top secret people held to our cage code.

So, we understand how to do this. We can find these people. We know that's a pain point for you. So, yeah, it was showing that we've already done it and also the results and impact that we've made and the fact that they didn't have to train us. They didn't have to educate us on all of it. Once you understood the nomenclature and for lack of a better word, the lingo and their challenges and what you've done to solve them for other customers, it paved the way. It got easier and easier.

Francis Larson:

So we have tons of staffing customers and the ones that do best, they focus. It's like cybersecurity at series B startups and they nail it or it's like ERP software for middle market or maybe it's enterprise only in certain types of roles or it's like a healthcare in a certain type of facility in healthcare. So, we definitely see that. The bad ones, they do random stuff, just whatever comes. Why do you think some agencies are afraid to focus on one specialty? What stops them from doing that?

Kim Henderson:

I think maybe first of all, lack of knowledge. Maybe they feel like if they don't know a particular industry like telecommunications, that they're going to come across like a fraud. They really don't know what they're talking about and get stuck in a trap there. I'd say turn the tables on that and learn it. There's so much information out there today. All we have to do is go to the internet and we can almost learn basically anything and they can educate themselves to be able to go and talk about it intelligently. Again, we never want to misrepresent ourselves. We always want to be honest.

Let's say if you're in the healthcare industry that you understand the traveling RN, case manager landscape based on your reading and your study and how you convey your information and how you ask your questions to get them to expose their pain points. So, I think number one, it's fear of not knowing it and feeling like they're going to get trapped, but I would say learn it. It's easy to learn. Then number two, I think sometimes staffing companies, you and I both know this, sometimes it's path of least resistance. We've done it this way. We've always done it this way. Do we really need to go and change it?

I'm not saying we need to go and blow up a business model, keep doing what you're doing, but explore and start to niche down and become a specialist in an industry, in an area where we think that as a staffing company you have capability. So, don't blow up the whole model. Continue doing what you're doing, but start to niche down and specialize a little.

Francis Larson:

Yeah, that's a really great point. Okay, so let's say you're a staffing firm. You've picked your specialty. You know exactly what industry you're going to go towards. You know your capabilities, and now it's time to get clients. What do you do there? Where do you start? I mean, is it just you pick up the phone and you're dialing? Are you going to conferences? Are you doing marketing on the internet? How does somebody starting from zero or at least a small volume, how do they start to really grow their business? Where is the first step?

Kim Henderson:

Yeah, you're right. You can't boil the ocean. You can't run to all the largest enterprise level accounts and expect to go and have business next week because those are long sales cycle. The way I approached it was, okay, I need a mixture of everything. I need these small segment one accounts where I know that I can get in reasonably quickly and start to get billable heads on assignment to keep the lights on and start pulling in revenue. Then I had a few targets that were more segment two, your midsize customer, which they've got the deep pockets. Still you don't have an MSP there. You can navigate fairly easily and again, get some hits.

Then finally, a few of those large enterprise where you knew it was going to take nine months, a year, year and a half, maybe even more to get into based on the barriers to entry and MSPs and all that. So, I think that's a key thing. Divide it up, your few small targets, a few medium-sized targets, and then maybe just a couple of the large ones and then simultaneously go after them. A lot of it is that, again, the old school things that we have to do, getting on the phone, leaving the messages, doing the email, doing LinkedIn. What I'm finding today, Francis, I don't know if you are, it's like what's old is new again. So many people are reliant on only email. It's rare anymore that people get a phone call and get a message.

When folks try to sell something to me, I may get one phone call a month and then I get deluged with emails all day long. I'm amazed at how no one calls anymore to the point where it actually piques my interest and I'm like, "Wow, I need to call this person back. Someone left me a message. I haven't gotten one of those in a long time." So there's that. Then obviously, the game changer today I think is LinkedIn. Adding it in is a tool to the toolkit. It doesn't replace phone calling and emailing and getting out in front of customers and having those client meetings and doing intake and asking questions, but it's a tool of a toolkit to show that you are similar to a thought leader or that you're somewhat of an industry expert or a specialist.

That can be done through posting, following the individuals that you're targeting, and joining groups. For instance, there are all kinds of DOD groups out there, following them, posting in those groups to show where your name is. It's getting out there and that you have credibility. So, when you pick up the phone and call someone, maybe it's not so cold after all, right? So I think years ago we just used LinkedIn almost just like a prospecting tool to find names and pick up the phone and call. Now it's being used, of course, to go and draw people to you. It's almost like additional marketing arm in addition to your sales arm. So, I'd encourage people to it. It's a tool. Why not?

Francis Larson:

So one of our investors is called Y Combinator and they've invested in 2,000 companies. There's a forum for Y Combinator and everyone talks about just how good LinkedIn is for getting new business. If you commit to doing stuff on LinkedIn, it's so good if you focus. I heard another quote that on LinkedIn, if you focus enough that it's almost like having a conference 365 days a year. If you're focused, it's like having a booth. Let's say you pay to go to a conference, you have a booth, you get 300 attendees. But on LinkedIn, if you're focused enough, it's like having that every single day. So, I think you're absolutely right. It is changing. It used to be prospecting. That's a great point that now it's not just finding who people are. That is where they are. That's where the people live.

Kim Henderson:

It's effective. You're right. When I do training classes now, especially for new folks getting into the industry, I always do a LinkedIn segment that they can add into their sales. I'm amazed that how many of them, and this is even coming from a generation, we'll call them Gen Zers that are right out of college that they're in the staffing industry, but they aren't actually posting and using LinkedIn as a tool for them. I'm like, "Wow, it can help your prospecting efforts. So, embrace it. You have absolutely nothing to lose." As you and I both know, a lot of staffing companies, they're midsize. If they've got their own blog, they've got their own articles, just reusable inventory and material that folks can post and use. They don't even have to write.

But Francis, one thing I did want to hit, because I didn't want to lose sight of it, and I think it's become a lost art. Again, it's something that really helped me is joining professional associations, make sure they're targeted and getting out there and getting involved. We talked about government solutions. I belong to the NDIA and the AFCEA, and those are specific DoD integrator professional associations. Long story short, I made a commitment to go and attend their meetings, their lunch meetings once a month. It was incredible.

The number of people that I would have to cold call for six months and wait for a callback and chase them around, I was able to get in front of them pretty quickly, introduce yourself, develop a rapport, develop some form of trust, and then ultimately go into their office and then do a formal intake call, learn more about them. But so many people don't do those professional association meetings because I think they just don't want to spend the time. Let's face it, they can be awkward, they can be uncomfortable.

You've got to go out there and you've just got to embrace it and go and meet people. They have them, as you know, for virtually every industry. They have them in finance and accounting. They have all kinds of tech meetup groups. So, they exist everywhere. If it's the right ones and you get involved, it'll move the needle big time.

Francis Larson:

Yeah, that is such a great point. We were talking to a guy yesterday, his staffing firm sells into hospitality for hotels, and they're doing huge, huge volumes. I've never heard of these folks. They just hang out with these hospitality companies. They go to their association. They just are so embedded in that industry. They know exactly what the hotel operators care about. They know everything from square footage rules, and how they clean rooms, how they run their business, and that knowledge translates into them just making a really good service for that industry. They could probably go into adjacent industries over time, but that wouldn't translate to IT.

What do you think some things for people to watch out for as they're getting new business? Let's say you're a cybersecurity firm and you find a new client and then they tell you, "Hey, can you do this other thing for us?" How do you go about telling a client, "No, sorry, that's not what we do"?

Kim Henderson:

I love this question because oftentimes in staffing we do try to be all things to all people. What happens then is it ends up biting us. As we've seen, we can't deliver. So, this has happened to me a lot over the course of the years where let's say it's a current customer and they come to me and say, "Hey, we need you to fill all these procurement roles." Of course, we were IT. I think that the key is I was just downright very honest and put it in terms of what's in it for them. Hey, I could try to take on these procurement roles, but it's not something that we specialize in and we don't have pipeline built for this. So, probably what will happen is we're going to be slow to delivery and we may end up disappointing you.

We're not the right match or the right service provider for those particular roles. What I can tell you is X, Y, Z company is typically good at this. This is what they do. They have a niche. They have a recruitment arm that's a focus for them as a specialty area, and I'm going to go and try to connect you with them. While you may go, "Oh gosh, you're connecting them to a competitor," what happened was they had so much more respect for you that you were honest with them. You were direct. You were upfront saying, “I can try it, but you're not going to get the same type of result out of us that you're used to. Ultimately, we may end up disappointing you." So they appreciated the honesty and then they appreciated the referral.

Ultimately, what happens is they solidified the relationship and it made it all the stronger where there was that enhanced trust factor that these people are going to look out for my best interest and they're going to tell me the truth. I've had to do it many, many times. That was a key thing, being honest, being upfront, and then trying to help them afterward and point them in the right direction. They came back and even gave us more business because of it. Taking that back to, let's call it a prospect, you're right, that can be tough because whether it's yourself or whether it's an account manager, you spend all this time chasing business and you start to become mentally and emotionally vested in it.

The next thing you find out, "Oh wow, this isn't the right client for us. Oh, we should have run a long time ago." So what I did with our team to prevent this is develop a target account assessment scorecard. I think it was about 15, 16 questions on it and had a weighting system. The weighting system wasn't really that important, but what I did was I wanted it to be objective, especially with salespeople. They want to go make that sale, they want to bring on that client. So, we had the questions and it was questions like, "What are the skill sets? What are the geographies? What are the bill rates? Do we have client contact? What are the onboarding processes and procedures? What are some of the contractual terms? Are they onerous? Can we live up to them?"

So the net is by the time we made it through these 15 questions and answered them, it became really clear, crystal clear if it was an account that we should be chasing and working with or if it was one that we needed to basically tell them, "Hey, we can't be a good fit." It made it objective. So, there was none of this, gosh, I'm mentally vested in it. I've been chasing it for six months. The good news for us was it saved a lot of time. We were able to figure it out pretty quickly if we should move on and tell the customer, "Hey, unfortunately, given the markups that you have, we're not going to be able to deliver contractors in this."

It was a great conversation to either try to get the markup increased or if they dug in and said, "No, hey, we're not the best fit. Let's check back with each other in X amount of time and determine if your current suppliers are getting it done. If not, maybe we can have a further discussion." So that was key on the front end, developing that target account scorecard where we can objectively ask questions to determine, "Is this going to be a good account or not?"

Francis Larson:

Yeah, so it sounds like basically the salespeople on meeting number one would be asking the client these questions.

Kim Henderson:

Exactly.

Francis Larson:

Yeah, it's so interesting what you said about you have an existing client and you're servicing IT and then they ask you for the procurement and you're like, "You know what? We're going to try to do this, but we're probably not going to be great. So, maybe we should refer you to someone else." It's interesting because if you take that to the logical conclusion, you become an MSP. You eventually are just managing the relationship and you have other vendors staffing the deal. It's interesting to me at least because the biggest staffing companies effectively do that. They have a couple areas they're good at and they're an MSP explicitly or implicitly by being the prime.

Kim Henderson:

Good point.

Francis Larson:

I think structurally, the market has listened to your advice. The best performing firms do that systematically. They're like, "You know what? We're going to use specialist vendors to recruit and take a cut and own the relationship."

Kim Henderson:

Absolutely. I hate to say it, but get something out of it, right? It's too expensive and time-consuming to go stand up a whole recruitment team that does nothing but procurement, get that to another supplier. To your point, perhaps you can go and work a deal with them and go and get a cut of that. Something's better than nothing. In the cases where you can't get a cut of it at all, I mean that's possible. At least you've planted seeds of goodwill and honesty with your client that will come back to you. It will come back around. If I lose procurement business and I'm an IT staffing company, I'm not going to be too upset about that anyway because it's business I never would've really been able to service.

Francis Larson:

This act of telling them we're not going to be the best fit for this, that seems like something that's going to improve the relationship with the client. Can you talk about that a little bit? How do you turn a staffing transactional relationship into something that's more of like a partnership, a strategic one?

Kim Henderson:

I love this. This is great. Okay, first of all, I think it comes to we don't want to be one-hit wonders, right? We as an industry, I think, do a great job of signing on new customers and chasing the shiny ball, but we do a very poor job of gaining client share and penetration and expansion within our existing account. So, it's all about client share. I think we go in sometimes with these blinders on of chasing only job orders, got to get a job, got to get a job, fill a job, and we step over... I'm going to steal a quote from a man I've worked with in staffing forever. We step over dollars to get to dimes just by chasing job orders.

Job orders are important because it's how we keep our seat, but there's more to it. I think it starts with know the size of the entire opportunity. Two questions I always, always ask from the word go is what's your total staffing agency spend for perm and contract for the year? That tells me if it's a company spending $30 million on IT services or if they're spending $100 million on IT services. So, agency spend, contract and perm, and the total number of contractors for the organization by location. What I found early on is we had 15 people billing and we compared ourselves to ourselves. We thought we were doing a great job, patting ourselves on the back, and then we found out our competitors had 150 people on assignment.

We were woefully underrepresented, but we never knew because we never asked the question. So, ask that question early on. That way, you know the entire piece of the pie, the entire size of it, and then that will help you go and gain client share better. Out of these 300 contractors that are here in the organization, where are they located? What teams do they work on? Who do they report to? That way you can go in with a more targeted approach versus just I got my job order. I'm going to run back to the office and fill it. You never get anywhere. It's just that constant one and done churn.

Another thing, once you gain that client share, to your point, Francis, you start to become significant and relevant to them to the point where you are not expendable. So, what happens when they look at their vendor's list every year and they cull up down if they need to, the first thing they look at is headcount. If your staffing company doesn't have a lot of billable headcount or they haven't placed a lot of permanent direct hire roles there in the past year, you're going to be the first to go. Conversely, if you've got a lot of contractors on assignment, you've placed a lot of people in different locations, you're also augmenting that with direct hire business, you're too important. You're too pivotal and crucial to their business for them to go and show you the door.

They need you to run their business model. So, it solidifies your space. So, I would challenge anyone to go and ask the questions about client share. I think beyond asking those two questions, it's asking deeper things like what are your top business initiatives that are happening in 2025? What are some major strategic changes that you're going to have? What are some of your biggest struggles right now, your biggest business challenges? What are your challenges in finding talent? Do you have any at-risk projects? What solutions or services would be useful to your business right now that you're just not getting?

So again, asking some of those deeper questions versus just, "Hey, do you got a job order for me?" That's going to elevate you again to that point that you mentioned, to that advisor status versus just that I'll call it commoditized vendor status. I start asking questions about value add too, which that's a big one.

Francis Larson:

So I guess I definitely want to tie that back to something you said before, which is you said that let's say you're trying to pick your specialty as a staffing company and you don't know the market. You can learn about the market and become a specialist. It's so interesting to go here with the client. The way to do best with a client is to learn about the client, their business, their spend, who's hiring whom, how do they do things, what do they have success or not, how you can be a value add, all that stuff. There seems to be a thread where if you're going to be a high-performing, strategic, important firm, it's all about learning. It's about learning your industry and learning a client. Would you say that's a fair... If you're good at learning, you're going to do well, even if it takes a little bit of time.

Kim Henderson:

100%. You've got to ask and you've got to listen. You can't go in there with these preconceived notions that you know what their issues and their problems and challenges are. No, not at all. You have to listen and ask and lead them down the path of self-discovery, right? Because sometimes they think what they're doing might be okay. Then when you start asking the questions, they mentally start to go, "Whoa, wait. Maybe what we're doing here isn't working. Maybe what we're doing working with this MSP isn't yielding the right results. Maybe I should work with this particular staffing firm and entertain doing statement work type of services."

It's all about asking and listening. To your point, you start to uncover commonalities or threads or patterns of what an industry is struggling with. They all seem to have the same challenges, and you'll start to uncover those threads and patterns that are common to all of them, and then it gives you the opportunity as a staffing company to try to craft some type of a meaningful solution to it versus just shooting from the hip. You have to be in student mode, lifelong learning mode every single day, I think, in staffing or you won't thrive.

Francis Larson:

Student mode, I like that. I like that phrase. So, two more questions for you. So, you mentioned SOW. I know that's a big area that you advise companies on. Is that an expert only strategy to try to go in SOW or is that something that a newer firm should maybe try that angle out? There's some nuances there. Do you want to talk about that a little bit? SOW, what is that and is that something that newer firms can try?

Kim Henderson:

Okay. It really is a flavor of contract staffing. So what I'd say is if a firm is already doing contract staffing, you have a great entry point into SOW. Oftentimes if there's an MSP in place as we talked about, or an internal recruiting arm or internal talent acquisition, that's usually a huge pain point for managers because as much as we tend not to like those, they don't either. They're probably not getting the right people, asking them, "Are you getting the right skill sets? How long does it take? Where is internal talent acquisition or the MSP struggling? Once contractors get here and get on the assignment, are they staying? What does post-sale support look like? How long are you willing to wait to get these people?"

You start to uncover that pain, which actually can lead you into statement of work, which is really just a carve out to say, "I'm going to go and give company X this tier two help desk because I'm tired of waiting on the MSP to give me people. Then I've got to interview 15 people to go and get two hires. I want to basically outsource that and give it to a staffing company and let them do all those pieces." So what's in it for the client is speed. They can ramp up quickly. They save a lot of time. SOW typically comes out of a different budget than staffing and 100% accountability on one staffing vendor. So, it's either one hand to hold or one throat to choke. They don't have to work with 15 different vendors and go through all these resumes and all these interviews.

One staffing company's handling all that, and they either do a bang up, great job of it, or if they don't, that partner will be our last SOW with that particular individual. But there's so many benefits to the client, and those are just a couple. The benefits to us goes back to client share. If we can go and put 38 people out on assignment. We're gaining client share and significance so much more quickly than we're working through the MSP and painfully making four placements a month. So, huge wins on both sides. Huge advantages to both sides.

But to answer your question, I think as long as you're doing contract staffing, you have a great entry point to go in and pitch SOW. It would be much harder to pitch if you're not doing contracts, you still could in theory. I've seen SOWs for direct hire where it gets outsourced almost like an RPO outside of internal talent acquisition. It's more rare. But I'd say if you're doing contract, start asking the SOW questions because I will tell you SOW work exists side by side in organizations that have an MSP. I've encountered that in working with Disney. They had both. HP had both. Google had both. Spectrum Charter had both. Many companies have both side-by-side, so don't assume that there's an MSP in place that SOW isn't happening. It's probably happening.

Francis Larson:

Really great points. I think SOW deserves an episode on itself and is definitely a big area that staffing firm should look into. So, thank you for that. The last thing is new firms. We work with a ton of new firms. What are some key things like a newer firm should think about if they have to remember some key wisdom points from you?

Kim Henderson:

I think a lot of it maybe is encapsulated in some of the items that we covered today. Niche down, know what your specialty is. I spoke to someone yesterday. I said, "Okay, so you've just started your staffing company. What area are you going to focus on?" They couldn't tell me that. I said, "Okay, well, you're not going to be able to go and do everything at once. Niche down into a functional area." Pick one. Pick IT. Pick finance and accounting where you think you're going to have the capability. That's number one. Number two, niche down on locations. We can't go and start searching the entire US.

Make sure you narrow down your location and then start to narrow in or zero in on a couple of different industries to give yourself some diversification, whether it's telecom or like you said, hospitality or government solutions or financial services. Niche down into a few of those and become that student and become that expert. Your example was perfect. That one staffing company that did only hospitality, it sounds like they knew it backwards and forwards and they were the authority, the staffing authority in that particular space. So, I'd say that's key as well. Also, to narrow your skill set. IT is pretty broad. Database, system administration, network and infrastructure development. Try to keep it narrow so you can build pipeline.

Maybe you just say, "We're going to do application development and that's it," or "We're just going to do network and infrastructure and that's it." That's okay. Build that pipeline. Be able to go and get those candidates for that just-in-time inventory if you're going to be doing contract. I think those are key. Then from a sales standpoint, realizing that we can't expect it to come to us. It's hard. It's a hard industry. It's going to take the calls, the emails, the LinkedIn, the text, the marketing, sending out the newsletter. It's going to take all of that, right? Join the professional associations, getting involved. We're going to have to do all of it consistently.

Then finally, what we probably didn't talk about is after you meet a prospect, value add, make sure you're providing value add before they become a client and then even after they are a client, because today they're expecting more than just a placement from us. They want us to educate them, inform them, help them through their business issues and solve their business problems. So, we do that through value add and whether that's giving them a webinar on AI or leadership or onboarding or sending them articles or connecting them to people, peers in the industry. So, they can talk in a forum about their issues and problems and bounce things off of one another, whatever that is.

I always ask the question, how can we add value to you beyond the placement? What would you deem to be useful and helpful to your business outside of us giving you a candidate? Francis, the crazy thing is they'll tell you. They usually know and they'll tell you, and that's awesome. It gives us a chance to say, "Hey, they need marketing information. They need salary information." Whatever it is, it's value add, and it's a differentiator because a lot of staff and companies aren't doing it. They meet them once and they pick up the phone, "Hey, how are you doing?" for the next six months. There's no value in, "Hey, how are you doing?" Do something. Even if it's just candidate marketing. Bring them value.

Francis Larson:

That's such a great point. Just calling up and asking, how are you doing? You have to give something to really get something. Wise words: focus, learning about the market, joining the professional orgs, helping to be a value add to the clients. I think personally it sounds like if you can really learn a client's business, their industry, learn about them, then you have the ability, and you can excel.

Kim Henderson:

Exactly.

Francis Larson:

Really, there's a thread there, but Kim Henderson, thank you so much for being on the series. This was amazing stuff. Thank you so much.

Kim Henderson:

Thank you, Francis, for having me, and I appreciate it. Thanks.