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Why Hiring a Staffing Agency to Find Your Next Project Manager Won't Work

Here's the low down on the flaws of using recruiting agencies to find a project manager

I’ve been there. You’ve got a project manager role you need to fill fast because your business needs to deliver something yesterday, or your current PM just gave you two weeks’ notice! And in comes the flood of staffing agency offers.

I know, using a staffing agency is tempting. After all, people use staffing agencies all the time. And you are currently juggling your job responsibilities while feeling compelled to start this business-critical project in the absence of a PM, or trying to keep a project afloat that has just been vacated with only two weeks’ notice. So, why wouldn’t it be a good idea to use a staffing agency to find a project manager?

Good question!

If you’re considering a staffing agency to fill a project manager role, stop and think about it. There are business-crippling reasons smart leaders look elsewhere to fill this crucial position, including time and money lost on interviews and training, impact on customer satisfaction, and more.

Losing Time and Money on Interviews

One time, I had a call with a client who was ready to pull her hair out. She needed a project manager—now. She hired a staffing agency to fill the position, and the agency didn’t filter out unqualified applicants. This isn’t a criticism. Staffing agency recruiters aren’t specialists; they’re generalists by design. She was left sorting through hundreds of applications that weren’t even close. It was a huge waste of time, resources, and money. The agency didn’t decrease my client’s workload; it increased the workload.

What she didn’t know was that recruiting agencies play resume roulette. For them, it’s a numbers game. As an employer, when you get 30-40 resumes at a time, that extra work lands on you. Staffing agencies rely on the client to review resumes and qualify the candidates.

The bad news? My client’s pain isn’t unique. The average hiring process in the U.S. is more than 20 days. That hiring black hole sucks money and time out of a company.

More bad news? If you’re not perfect in the hiring process, you could end up having to find a replacement within six months.

Hiring and Training Costs

Let’s pretend my client had somehow found a resume she liked. She still would have had to onboard, train, and oversee the daily care and feeding of the new project manager.

With staffing agencies, the client is responsible for training, management, and quality assurance of the new hire’s work. And, often, these positions are only temporary. It takes a ton of time to enable a new hire, especially a knowledge worker such as a project manager, to be productive in a new environment.

That’s expensive. According to Employee Benefit News, it costs 33 percent of a worker's annual salary to hire a replacement if that worker leaves. A large percentage of project management jobs are temporary due to the nature of projects. Using a staffing agency doesn’t insulate you from that cost when it comes to temporary positions.

The new hire isn’t a good fit? Tough. Staffing agencies can’t provide support if the candidate doesn’t work out. You either have to suck it up and make it work or recruit for a replacement and deal with the impact on costs, schedules, and customer satisfaction that comes from handing a project over from one person to another.

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Achieving Consistency Is Impossible

Every project manager you get from a staffing agency will plan and manage their projects differently. You’re always going to be reaching into a mixed bag. It just isn’t possible to transition from one project manager to another this way without impacting the time and budget of a project.

A lack of consistency also makes it impossible to measure the quality of the job being done before it turns into a problem. And it makes program and portfolio reporting useless because each project manager is reporting against their own specialized criteria.

The Triple Threat, Culture, and Turnover

Due to the highly specialized nature of project management, staffing agencies aren’t optimized to solve the challenges associated with hiring, training, retaining, and enabling project managers to succeed. Agencies are made to fill a hole. They focus on positions, not people.

And let’s not forget that project managers are leaders who enable transformational change, and that is about people culture.

Here’s the triple threat:

  1. A staffing agency’s inability to focus on people and recruit for your culture
  2. Your urgency to hire someone and get the project started
  3. The amount of work you have to do to scrub resumes, conduct interviews, and provide the agency with feedback.

It’s a recipe for compromise.

The truth: Hiring someone who is not a solid cultural fit to drive cultural change will erode your company’s culture. And once the culture sours, it leads to turnover. According to a TINYpulse report, employees who don’t like their company’s culture are 24 percent more likely to leave.

I doubt I have to tell you this: Once key employees leave, turnover can snowball out of control fast. For advice on building a high-performing leadership culture, you can find It’s Never Just Business: It’s About People on Amazon.

Is There a Better Alternative?

In today’s agile economy, it’s critical that companies leverage the talent and flexibility available with a contingent workforce—including consultants, independent contractors, and temp-to-hire staff.

You can use a staffing agency to find contingent team members, or you can work with a highly specialized managed service provider (MSP). Now, there are MSPs and contingent workforce management providers that are generalists. And though there is some benefit to having all of your contingent workforce run through a single company dedicated to your needs, the generalists don’t solve any of the problems you will encounter with a staffing agency.

Eliminate Resume Roulette

Project and product MSPs are experts at managing large enterprise-wide project and product teams. They can provide you with a bench of qualified candidates who are ready to go to work when you need them. They eliminate resume roulette and put fully vetted, 100 percent-qualified candidates in front of you for a meet and greet to ensure cultural fit before they start working on your projects.

Onboarding, Training, and Oversight so You Can Stay Focused

In addition, MSPs learn your business and build orientation, onboarding, and training templates into their learning management systems, which allow them to complete those activities for you. And they will manage their team members’ daily care and feeding so you can focus on what you need to do to create value for your business. In the end, whether you have two of their team members or 100, you have only a single additional direct report in the form of an account manager or practice leader.

Extended FTE Bench

Also, single-sourcing your contingent needs to a specialized MSP allows the company to achieve the scale necessary to serve as your FTE bench. That means that the next time a project manager gives you two weeks’ notice, you already have their replacement on the team. All you have to do is finalize the offer and start the transition. With this approach, an MSP can completely eliminate the time and cost associated with recruiting, training, and retaining FTE project managers. On average, that’s about $26,000 per hire.

They Focus on People

The right project and product MSP partners with you to anticipate upcoming needs and ensure candidates are ready when you need them. Because they are focused on a single area of expertise, and live in your culture, they can work from the inside out rather than bringing in a temporary outsider or a body to fill an immediate need.

They don’t believe in playing the numbers game. In fact, they don’t send you resumes; they send you fully vetted candidates whom they would hire on the spot—people they’re willing to put their name on and would be proud to have work with any of their clients.

And they never send more than three qualified candidates because they’re experts when it comes to hiring project and product leaders, and they are you. They live in your culture and understand your needs intimately.

They Come with a Standard

A good project and product MSP comes with a proven practice standard that each of its team members is trained in and that is used to QA their work.

You can’t call something a service unless there is a center of excellence or a standard by which all team members are trained and quality-assured against. A good project and product MSP isn’t just providing smart people and allowing each of them to plan and manage projects differently.

Doing so would enable chaos and eliminate the ability to quality-assure their work, swap projects between project leaders, and efficiently transition projects when people give notice, and it would make program- and portfolio-level reporting useless.

The Right Way to Fill a Project Management Role

The right MSP doesn’t just fill a project manager role. It strengthens the whole team. Learn more about the difference between recruiting agencies and 120VC. Grab a 30-minute slot here to talk.

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