How Your Staffing Firm Can Benefit from Economies of Scale

Many benefits come with a merger or an acquisition, with economies of scale being one of the most lucrative. Oxford defines economies of scale as proportionate savings in costs gained by an increased level of production. Most types of businesses can reap the benefits of cost advantages brought about by a merger, and staffing firms are no different. Apart from acquired clients, a larger market share, and less competition, there are many other ways that staffing firms gain economies of scale. If you are looking into making an acquisition in the staffing and recruiting industry, here are a few ways to leverage economies of scale to improve business performance after the deal closes.

Save on Enterprise Plan Job Boards, ATS, and CRM subscriptions

Every staffing firm needs customer relationship management software and applicant tracking systems, as well as access to premium job boards. Whether you are subscribed to an existing platform or have proprietary technology, combining these systems with another firm is considerably beneficial. When staffing businesses merge, it is a logical recourse to combine ATS and CRM platforms. The merger would also allow shared usage and subscriptions to job boards with enterprise plans. Single-company subscriptions and consolidated tech maintenance fees between two or more companies reap a significant amount of savings.

Make use of a single tech stack

Apart from job boards and ATS and CRM software, economies of scale can be applied to your staffing firm’s entire tech stack. Combining digital workspaces, communication programs, VOIP, scheduling systems, outreach platforms, and sourcing tools between merged companies not only saves on costs but also provides a streamlined single tech system for all staffing firms involved.

Consolidate candidate talent pool

The success of a staffing firm relies on its ability to procure the most qualified talent in the fastest amount of time. A database of credentialed and dependable candidates is crucial to filling vacancies. While there are many ways to purchase a list of potential talent, nothing beats a database that has been built through the firm’s own efforts. An in-house database usually includes talent that the staffing firm has personally credentialed and touched base with. These candidates usually equate to a higher success rate due to more meticulous credentialing and personal relationships with recruiters. When two merging firms consolidate their talent pool, it gives both companies an edge to provide a wider pool of talent to a wider set of clients. Apart from saving on sourcing costs, both businesses can enjoy more efficient candidate placement and lower cost-per-hire.

Streamlined responsibilities for internal teams

When companies merge, a significant amount can be saved on internal salaries when teams and roles combine. Certain departments of both companies such as marketing, finance, and HR can be merged. This opens the opportunity for team members in duplicate roles to pivot to other positions and further expand the business. Not only is it less costly to pay one team instead of two, but you also gain talent that has already been vetted by your new partner company. 

Spark new opportunities with savings

Staffing firms can save a significant amount from economies of scale due to a merger or acquisition. These savings can be spent on growing the business through developing new service offerings, providing further training for teams, purchasing top-of-line resources, and more. In addition to reducing costs, merging companies can leverage a shared network that may create more opportunities for success.

Growth through M&A can be immensely lucrative if done right. When exploring this avenue of expansion, make sure to work with a third-party advisor with niche expertise in your industry. This ensures guidance that takes into account the nuances that come with M&A transactions in your particular field of business.