Consolidation

Yesterday, The Wall Street Journal featured an intriguing article about FedEx’s integration of its express and ground services. As someone who isn’t a logistics expert, I had never considered the complexities involved in merging these two operations. It’s a massive and fascinating endeavor, and I’m curious to see if it proves beneficial.

So, why is a ‘staffing guy’ discussing FedEx? The article made me think about the parallels and differences between FedEx’s merger and the integration of temporary (locums) and permanent physician staffing.? With 30 years in staffing across various industries—mainly healthcare—I’ve seen both models up close and appreciate their unique challenges and opportunities. Here’s my take on whether physician staffing will follow FedEx’s approach. I’ll start by highlighting the commonalities shared and differences between Temp and perm physician staffing:? ?

Similarities:?

• Candidate Relationships:? Both work with physicians.? Synergies in candidate sourcing and brand recognition are impossible to deny.?
• Common Clients:? Both work with hospitals and physician groups.? Cross-selling multiple services to the same clients is intoxicatingly appealing.?
• Difficulty level:? Provider shortages, continued healthcare industry consolidation, VMS/MSP, tight labor markets for internal talent, remote work preferences and other challenges make both tough businesses.? Both require significant talent, skill, and hard work. Despite the myth that locums is easier, both are highly competitive and challenging in their own right.? ?
• Similar Internal Talent Pools:? Both require skilled hiring for roles in sales, recruiting, and account management, and a robust training program to quickly bring new hires up to speed.

Differences to Consider:? ?

• Sales audience: those who sell permanent staffing tend to call on hospital administration or in-house physician recruiters, executives at physician groups, etc. without respect to provider specialty. In locums, most successful sales reps call on physicians in their target specialties, leaders in the service lines like medical directors as well as medical staff offices. Locums salespeople who only call on a central contact at a client will likely be challenged to uncover needs in the fast-paced locums world*.
• Speed: Speed is universally valued in sales and staffing, but the relative scale is quite different in the two businesses.? Placing doctors on a permanent basis could take weeks or months whereas locums success is more likely measured in hours or days.? This is the single, biggest difference between the two businesses.?
• Skills: ?To be successful in permanently placing doctors in new locations, frequently moving them across country, perm recruiters must be adept at working through deeply emotional challenges like uprooting children, the stress of finding housing and working through complex offers and employment contracts. They must also be good at getting the attention of and encouraging candidates to consider locations and roles they might not have otherwise considered absent the recruiter’s involvement. On the other hand, locums demands the recruiter’s ability to develop a longer term relationship of trust with providers, the organizational skills to keep track of their stable of doctors and to handle the coordination of assignments, travel, logistical and pay snafus. Neither is harder than the other; they are just different.? Related to the sales (business development) function, the skills also differ and both are demanding. I’ve seen hundreds of transitions from one business to the other with only a handful succeeding at both, though many excel in one but not the other.? All necessary skills are teachable but take time to master. When I was at The Medicus Firm, we felt like we had compressed the learning curve to having producers functioning at our desired pace and achieving impressive results in five months, though mastery takes time. Layering on the skills required to be an effective locums sales person or recruiter may not double that, but it also won't happen overnight.

Temporary and perm staffing go together like peanut butter and jelly.? I know of a few companies in our space attempting to have their teams provide both services, including one of the largest in our space.? Can smaller companies effectively scale with merged sales and/or recruiting efforts?? Can an already large player retain market share and effectiveness while merging teams and responsibilities into one delivery group?? Are we all going to follow FEDEX’s lead and have it pay off??

Intense focus is crucial to success; as the old Chinese proverb says, ‘If you chase two rabbits, you’ll catch neither.’ While merging staffing functions might offer cost savings, specialized teams may still be more effective.? If I were starting a company tomorrow, I would likely structure it with temp and perm staffing delivered by specialized teams, hired and trained to be experts at what they do.? But, I’ve learned to never say never.? I was also anti-iPhone for a while before having about 10 in a row!?

I’d be interested to get your thoughts (on the staffing angle, not iPhones) in the comments.?

Jim

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* To my ‘in-house’ recruiting friends:? I understand that this point might be frustrating as you attempt to manage all the staffing needs of your employers. I’m just calling balls and strikes on what I’ve seen work and what hasn’t, and I mean no disrespect to the important role you play in staffing your hospitals.