Specialized staffing agencies help employers find the skilled workers they need. Here are the pros and cons of niche agencies and tips for how to choose them.
A chronic complaint from employers is how hard it is to find the skilled workers they need to fill jobs. Add in the current labor shortage — an offshoot of the Great Resignation — and the scramble to find talent with skills and knowledge suited to specific jobs or industries becomes even tougher.
As if recruiting and hiring weren’t hard enough, should employers drill down into the labor force to find uniquely skilled talent in today’s employment climate? When employers consider the cost of a mis-hire and the time required to find a replacement, the answer is likely “yes.” And niche staffing is a possible solution.
Employers, especially HR professionals, know that the best talent — whether permanent or temporary workers — have experience in or knowledge of a particular field or industry. Businesses that can’t risk hiring mediocre talent or someone unfamiliar with their industry should see what specialized staffing agencies offer and find 1 that’s focused on the kind of workers they need.
What is the definition of niche hiring?
Dictionary.com has six definitions of “niche.” But this definition best explains what niche staffing fulfills: “A place or position suitable or appropriate for a person or thing: to find one’s niche in the business world.”
Niche hiring is a search for talent that’s specific and tailored to a job description. While general hiring may produce the same results, the chances of getting a candidate who can “hit the ground running” in the least amount of time, with the least amount of training is a preferable choice.
Niche hiring is a search for talent that’s specific and tailored to a job description.
Although staffing agencies may offer a range of services, most reportedly function within a target niche and connect candidates with hiring companies in a particular industry.
Pros and cons of niche staffing versus general staffing
Whenever you have choices, there are pros and cons to consider. The choice between working with either a niche or a general staffing agency is no different. Both have advantages and drawbacks, according to TemPay LLC, a Cleveland-based payroll and staffing services firm.
Niche staffing agency pros and cons
You may want specialized hiring to fill an opening, but the position may not warrant the expertise of a niche staffing agency. This list of the pros and cons of niche hiring may help you decide what hiring strategy to take.
The niche agency or recruiter…
- Has a more thorough knowledge and understanding of a certain industry or industries.
- Has more time to invest in and stay up-to-date on current needs and trends.
- Knows what traits to look for in highly qualified candidates and how to build a talent pool that client companies can depend on.
- Can complete the hiring process — from candidate search to job offer — in as little as a few days.
- Can free up the client company’s HR manager or recruiter, who may have multiple responsibilities and little time to conduct a specialized talent search.
- Gets to know the candidates through interviews. provides client companies with feedback, and rules out disinterested candidates.
- May conduct background checks at the company’s request.
- May offer and/or administer payroll, training, certification, and employee benefits, including health care coverage, paid time off, and 401k retirement plans.
The niche agency or recruiter may fail if…
- The niche is so specific that there won’t be enough clients to support the recruiting and hiring efforts and costs.
- The competition for niche talent is fierce.
- The prospective and repeat customer base is too small, which may stifle the agency’s growth and profitability.
General staffing agency pros and cons
A sizable number of staffing agencies provide general recruiting and placement services, while others specialize in 1 or more job categories or industries. Knowing when general staffing is enough to fill a vacancy requires an understanding of the pros and cons.
The general staffing agency or recruiter can…
- Get access to and build relationships with more hiring companies, which improves the agency’s potential for growth and profitability.
- Gain experience in a broad range of industries and therefore serve more client companies.
- Experience greater networking opportunities, with access to clients in more geographic areas.
- Speed up the hiring process, from search to time-to-fill, for “standard” positions or common skills (i.e., administrative/clerical, business professional, light industrial, and finance/accounting).
- Offer client companies comparatively affordable billing rates.
General staffing agencies or recruiters fail by…
- Stretching themselves too thin across staffing sectors and not having enough workers to serve their clients’ needs.
- Entering an industry that’s unfamiliar to them, which can result in sending companies the wrong candidates and, in turn, failing to meet their expectations.
- Watching their business grow too large and too fast without the resources to sustain it.
What is the cost of a bad hire for employers?
Recruiting and hiring always comes with risks. But a bad hire can cost employers as much as 30% of a candidate’s first-year earnings, U.S. Bureau of Labor Statistics research shows. As an example, paying a starting salary of $40,000 for a new hire who turns out to be a bad choice is a $12,000 loss for a company.
Recruiting and hiring losses can amount to an astronomical $240,000. This number includes losses in wages and retention perks, as well as recruiting expenses.
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The labor shortage and the niche staffing boom
Precision Global Consulting (PGC) reports that the U.S. staffing industry, which it projects will reach $157.4 billion this year, is set to make niche staffing a priority in 2022.
PGC credits the labor shortage with the industry’s focus on niche staffing. According to the firm, the scarcity of talent has shown hiring managers that they need candidates with specific skills sets and a recruitment process that’s completed quickly.
List of niche specialists that companies need
Employers can expect the list of niche positions to grow and evolve as new occupations emerge. Among the specialists that companies are looking for niche staffing agencies to provide are:
- Internet of Things (IoT) staffing
- Golf caddies
- FinTech experts
- Charter school teachers
- Certified project managers
- HR industry-based data scientists
- Transportation providers for the education industry
- Cybersecurity experts
- Electronic medical record (EMR) or electronic health record (EHR) consultants
How can employers find a niche staffing agency?
You can choose to work with a niche agency or recruiter to fill 1 position or enter into a long-term contractual relationship. However, the first step is finding the right agency.
Ben Walker, CEO and founder of Transcription Outsourcing, LLC, recommended in a Workest email interview that you find a niche agency by starting the search in your own industry. This involves asking for referrals from your industry contacts or other businesspeople who may know a niche staffing agent who specializes in the kind of talent you want to hire.
How do you know a niche agency can meet your needs once you find one? Walker said you must trust and verify what an agency says about itself in conversations, ads, and on its website.
What questions do you ask an agency? Walker advises that you call agencies directly and ask questions with verifiable answers, such as:
- How long have you been recruiting?
- For what length of time have you been doing niche recruiting?
- How many people like the ones I need have you placed in the last 12 months?
- Do you have a team or do you work alone?
Walker also recommends that you:
- Get at least 3 agency references from companies that have hired the same type of employee you need in the last 6 months.
- Find out if these companies hired and still employ the kind of talent you want to hire, while ensuring them that you’re not trying to compete with them or are out to steal their employees. This strategy can be a testament to the staffing agency’s successes or failures.
You also should find out how many, if any, candidates the niche agency has matched with local companies.
What do agencies need from you to get you the right talent? “Anything and everything you can possibly think of that will help them place the right person with you,” noted Walker. “Think of your recruiter as you would your doctor; don’t leave anything out and don’t lie…so they can see [things] from your perspective.”