The phrase ‘the staffing landscape is changing’ has become all too commonly featured in news sites, journals, and articles across the web when automation technology is mentioned or referenced. While it might sound cliché, this statement accurately captures the constant transformation driven by these technological advancements and how they change how organizations view their internal and external processes.
But it’s not all roses and rainbows in the realm of automated staffing. Introducing this technology has exposed many challenges that today’s staffing firms face concerning the hiring process and pipeline. These challenges range from time-consuming paperwork to complex contract management and compliance issues. Legal professionals spend an average of 2.5 hours daily reviewing contracts and administrative documents. This excessive time could be drastically reduced with the right tools in place.
The good news is that the staffing industry is no stranger to technological adoption; candidate sourcing tools and Applicant Tracking Systems (ATS) have already eased recruiters’ day-to-day lives. Contract Lifecycle Management (CLM) is paving the way for another significant improvement in these processes. Unlike previous tools that primarily impacted particular areas of the process, CLM has the potential to reshape many different departments, effectively changing how staffing organizations view and manage their legal agreements while simultaneously reducing the cost per hire of each candidate.
This article is a deep dive into how this is possible and how staffing agencies can prepare and adapt to these platforms.
What a Lack of CLM Tools Looks Like in Staffing
The current staffing process demands a disproportionate amount of time for recruiters and legal professionals, especially in tasks related to contract creation, negotiation, signing, administration, and storage. These inefficiencies accumulate from the hours spent creating a standard contract for a new position to the time wasted locating a forgotten document. Ultimately, this raises the cost per hire of each prospect, negatively impacts the candidate’s experience, and lowers the organization’s ROI overall. This is the stark reality of the staffing industry without the aid of CLM tools.
But the list is far from over. Here are 3 of the most impactful consequences of inefficient contract management for staffing companies:
- Manual data entry and error-prone processes
These are the true “meat and potatoes” of contract management challenges. Tasks such as manually drafting contracts, conducting individual document reviews, and searching for data without a centralized repository could easily take top honors in the “Olympics” of repetitive tasks.
While each task might seem manageable on its own, their cumulative impact on the candidate pipeline is significant. These time-consuming activities steal hours every day that could otherwise be spent on onboarding more candidates or focusing on other critical functions. To put this into perspective, 80 percent of companies’ project time is consumed by repetitive tasks, compared to the actual value they bring.
- Difficulty in tracking contracts
Many organizations without clear contract practices leave document storage practices to the discretion of the individual workers. Beyond contributing to the previously addressed time inefficiencies and leaving the door open to human errors, these practices are one of the reasons why cybersecurity and IT professionals wake up in a cold sweat, plagued by fears of potential breaches.
Contracts contain some of the most sensitive information of individuals and organizations, and ensuring safe and efficient storage improves efficiency and avoids costly mistakes that could heavily impact the organization’s reputation.
- Challenges in ensuring compliance with regulations
Staffing companies must constantly keep pace with the evolving nature of laws, data protection regulations, and industry standards. Financial penalties for non-compliance can be substantial, often severely affecting a business’s bottom line and economic stability. These regulatory fines are not just a slap on the wrist; they can potentially cripple an organization’s operations and growth prospects, especially for smaller companies.
Ensuring compliance when contracts don’t have a central repository is complicated. Manual revision of deadlines and statuses becomes time-consuming and prone to human error.
Finally, the effects of non-compliance extend beyond immediate financial penalties. Loss of client trust, damage to brand reputation, and potential legal battles can have long-lasting impacts on a staffing firm’s success and sustainability. These are not just theoretical risks; they are real.
CLM and Automation – Transforming the Hiring Process
Needing a CLM is a good thing. Increasingly larger contract volumes are a sign of business growth. This could be represented in cases with more candidate pools or new partnerships with other organizations. However, preparing to tackle this growth before it tackles you is vital.
CLM addresses the pain points of manual data entry, contract tracking difficulties, and compliance challenges by providing a unified platform for all contract-related activities. But the bigger picture comes in the way of automation as platforms like Zeal streamline workflow between departments, significantly reducing time spent on administrative tasks and mitigating the risk of bottlenecks as contract volumes increase.
One of these platforms’ most powerful features is its use of clause libraries and customizable templates. These can be auto-populated with the information provided from intake forms and other tools like JobDiva and Salesforce, transforming hours of recruiting and legal work into minutes. This efficiency allows contracts to move swiftly between different departments and the candidate.
How CLM Reduces the Cost per Hire of Candidates
With the operational efficiencies of CLM established and the advantages of the platform explained, here’s how it directly and positively impacts a staffing organization’s bottom line. These benefits ultimately boil down to a crucial metric in staffing: the correlation between time-to-fill and revenue generation.
A shorter time-to-fill leads to quicker placements, accelerating revenue generation. More extended periods can delay revenue and potentially result in lost opportunities. Here’s how CLM implementation in the staffing industry optimizes this process:
- Cost Implications: By reducing time-to-fill, CLM decreases expenses related to job advertising, recruiter hours, and administrative tasks. These savings positively impact overall profitability.
- Client Satisfaction: Faster placements enhance client satisfaction, fostering repeat business and referrals crucial for revenue growth.
- Employee Productivity: Quickly filling positions ensures teams are fully staffed and operating at optimal productivity levels, directly contributing to revenue generation.
- Competitive Advantage: Companies that fill positions faster are more likely to secure top talent, driving innovation and business growth.
By streamlining the hiring process, CLM reduces direct costs, enhancing the staffing firm’s competitive edge, improving client relationships, and contributing to long-term success.
In an increasingly competitive and fast-paced staffing industry, adopting new technology is not just a matter of operational efficiency—it’s a strategic need. Organizations that embrace this technology position themselves to thrive in a landscape where speed, accuracy, and compliance provide the competitive edge.
If you recognize these pain points in your organization or want to explore CLM implementation further, we’ve got you covered. We’ve prepared a free, comprehensive guide that will walk you through:
- Immediate actions you can take internally to improve your contract processes
- How to assess and select the right CLM tools for your specific needs
- Step-by-step instructions for implementing CLM in your organization
To download our in-depth guide, please click here.
If you want to explore how Zeal can directly provide these benefits to your staffing organization, create your own free account here.
