What’s it Gonna Take to Start a PERM Division?

Sep 1, 2007

It is a great time to be in this industry! The future is both exciting and distinctly different from recent years. There is room for all kinds of services offered by professionals who find, evaluate, and place people. In my opinion there has never been a better time to engage in both full-time direct placement and supplemental temporary staffing, simultaneously.

Everything from CEO briefings to The Wall Street Journal to CNN suggests that a top strategic initiative of many companies is to hire not only new talent, but also the right talent. Even with the diminishing available talent pool in this country, and the tempting message about the lower costs of skilled and unskilled offshore labor providers, I anticipate that employers will put their money toward hiring solid people and creating positions that leverage opportunities to innovate, compete, and achieve corporate objectives. In my 22 years of running a staffing and placement desk/company, my observation of this talent “shortage” is that clients are demanding more, not less, and are unwavering in their expectations to attract and hire “difference makers” and “key contributors.”

This not only adds opportunity for temporary-service firms to cash in on supplementing those vacancies while their clients hold out for the right hire, but it also affords a magnitude of opportunity for the human resources service provider that masters the fit and executes in a manner that continually provides that fit to their customers. It provides even more opportunity to companies that can effectively do both.

Consider that unemployment is as low as most of us have seen it. Our candidates are fully aware that the opportunity to work, and work full-time, is there if they so choose. They are becoming choosier. If at all hirable, most candidates who want a full-time job are interviewing for perm positions, even while temping for you. So, offering perm placement to your temporary talent pool is just good common, as well as business, sense. It tells your temporary employees that you have their best interest at heart and are always on the hunt for a full-time job for them, and it gives you unique leverage as the current employer who will serve as the reference. Temp employees whose intention is to have you give them a good recommendation make the very best type of temporary workers.

While temp and perm are very different, they share many commonalities. Companies do business with people they like. Even when a company has a temporary service agreement with Manpower, or Spherion, they will almost always take quality, “difference making” candidates from other placement firms that understand their culture, needs, and fit. Just as a great service coordinator on the temp side masters the art of duplicating “right” and builds a strong pipeline of available talent, the astute perm recruiter is well aware of the replication processes and their clients’ hiring cycles, ready to deliver when their clients have a need.

Additionally, before a temp staffing company enters the perm placement business, there are other things that must be considered. In addition to the obvious, such as who will do the work, a major consideration is whether people will run a blended desk, where both temp and perm placement are provided, or if a separate team of folks will be developed who are dedicated to identifying perm candidates and marketing those candidates to existing or new customers. If the decision is to open a perm service and maintain two separate divisions, a policy will have to be set forth for candidate and client ownership because there is sure to be a squabble over who did what, and what that contribution was worth.

Likewise, the temp staffer and the perm recruiter share many of the same behaviors. Both typically have a strong sense of urgency, have varying degrees of competitiveness, and enjoy variety and customer interaction. And top performers on both sides are aware of and eager to hit their production goals. The most glaring difference I can see is the time in which the employee is expected to produce a result, and that cannot be underestimated. I was once told that working a temp desk is like running the 50-yard dash, while running a perm desk is like the mile-and-a-quarter race: fast at first, then slow and steady, then come in with a strong stride. The other big difference is that most of the work on the perm side is done before the placement happens, while most of the work on the temp side is done after the placement starts. Temp takes a strong service and a light sales mentality, while perm takes a strong sales and a discerning service mentality.

Temp companies should also recognize the difference in the sales process. Temporary sales are typically an industrial selling solution and a client-centric order-fulfillment philosophy, whereas the most popular form of perm selling is running with an MPC, and the emphasis is on getting great people great jobs. From what I have seen, heard, and experienced, the spin selling system works well in both sales scenarios. What works the same in both types of staffing is that you are perceived as ONLY as good as the last person you placed. Everything you do can and will be held for or against working with you again in the court of more business.

There is also the infrastructure: the systems, operating practices, and day-to-day functionality of the office. What works on temp may work on perm, but you will need to modify your screening and selection process as well as add a few steps to manage your teams’ effectiveness. And then there is candidate control, preparation, counteroffers, navigating multiple offers, and negotiation.

Working out billing issues in advance is smart. Will your company offer temp to perm with no fee? Or will you stand on the ground that you will offer perm placement and ANYTIME someone takes someone out of their assignment parameters, a fee will be due? Or is your policy determined on a case-by-case basis (not recommended).

Another item to consider is the caliber of people being placed. Are they the same people you are placing on temp? Or are they higher-caliber, harder-to-find people? Can you interview them both in the same office? Or do they need separate entrances? It seems trite; however, birds of a feather flock together, and often when high-caliber perm candidates come in for an interview and see five industrial-labor applicants in the lobby, those perm candidates will unconsciously select themselves out before they even know what your company is offering. First impressions are lasting.

Compensation is another item to consider, as perm recruiters typically get paid very differently than temp. Answers to most of the questions above will determine the answer to the compensation question.

Finally, how you will differentiate your company from your competitors? Are you in a niche market? Is your service offering totally unique? Is it your recruiting maneuvers that set you apart, or your selection process? What can you leverage to make your company special?

The first thing to do before offering perm placement is to investigate the other services that your clients are already using: what is working, what is not working. Second, take pen to paper and answer the questions listed in this article. Third, evaluate your team and determine whether they have what it takes to offer perm placement at the level that your planning efforts lead you to choose. The only mistake in launching is in not planning and heading face first into the water. As the old saying goes, an ounce of prevention is worth a pound of cure.

Margaret Graziano, CPC, CTS, and mother of three, has been a top producer in the staffing and recruiting industry for the past 20 years and has owned her own firm since 1991. She prides herself on client retention and making the right hires. She has earned over $5 million in personal “desk production” income and has placed over 2,000 candidates in direct-hire positions. With the competitive business world and the war for talent in full force, Margaret’s company, Alliance HR Network, has ventured into new realms of talent acquisition, organizational development, and human capital consulting services, thus diversifying Alliance’s revenue streams and gaining new and exciting talent acquisition and assessment consulting opportunities. Margaret’s email is, and her phone number is (847) 690-0077. The strategic planning forms are listed under a Strategic Planning Downloads section at