Selling Projects and Selling Staffing Miles Apart

I’ve had personal experiences and discussions numerous times with people from both camps. Even though the resources can come from the same talent pools, and even though the clients can be the same people, the methods and sales cycles aren’t anything alike.

Sales Cycles: Selling projects is like running a marathon. Cycles can last 6-12 months before a final decision is made. You have initial stages like introductions and investigations into company environments and business problems. You need to build an organization chart of the client influencers and decision makers. You must build credibility that YOU and your company are experts in the technology or applications.

Selling staffing, (after getting on the vendor lists) is more execution focused. The cycle can last only 1-2 days and decisions are made not on the “best candidate” but on the “fastest” recruiter. You are usually dealing directly with lower level gate keeper types that just do some initial screening of resumes and move paperwork through the client’s internal mazes.

Sales Methods: Projects require more of a team sell. You need to have a team with different roles and responsibilities. The sales person is usually your investigator, relationship builder and client cheerleader. There’s usually a project leader on the team that is responsible for the proposal production and methods for execution of the project. It is best in my experience, to have that person continue on with the client and become the actual project manager with the client because of their involvement early in the decisions. I usually also rely on the project manager to come up with cost estimates for people, software and equipment. In software development especially, a very senior technical person gets into the nuts and bolts and uncovers any potential issues that could kill project before kickoff. This person also develops most of the time frame estimates.

Usually, the sales person in staffing really isn’t selling but maintaining the flow of requirements from VMS systems or emails into their internal recruiting teams.

Dollar Negotiations: I have been in situations that we were bickering over $250,000 on project estimates that have swung decisions and then later that year discussing why I needed $2-3 dollars more per hour for staffing, ON THE SAME RESOURCES.

Utilization Rates: It’s amusing to see staffing companies that move into projects, still expecting utilization rates over 90% on their billable staff. Staffing has more a gradual growth rates with no bench time.

By winning a project, your recruiters sometimes need to hire 50+ people in 90 days. BUT, then you may have times in between projects that the bench time will eat into profits pretty fast. Utilization rates of 70-75% aren’t uncommon.

The key for companies that want to work both sides of the business, is to have a seamless method for moving people between projects and staffing.

Margins: This is the pie in the sky for staffing companies. They see their normal VMS accounts producing gross margins of 18-20% and think the 80-120% gross margins of projects as easy money. They don’t understand the long sales cycles, proposal production costs and bench time are all part of the expenses by the end of the year.

Recruiting and Building Development Teams: On projects, YOU DECIDE who is on the team and the vendor takes responsibility for their success. Recruiters love this situation because the decision time is cut down drastically. Personality isn’t as important in the team members as long as they do their jobs.

In staffing, many times, how well someone interviews or their image is a prominent deciding factor. How well a formatted resume highlights the specific skills not the person’s actual skills can kill a deal. Also, clients will go through elaborate interviews to decide which candidates to put on their teams and lose the best candidates that can’t wait and take another contract/job.

There are pluses and minus for every company looking to change their business models but the key is just understanding what the real challenges are and honestly deciding if it’s best usage of your company’s talents and resources.