How Operational Drift is Hurting Your Margins

(And What You Can Do to Fix It)

Employees deviating from best practices in their workflows

As in any business, it’s easy for staffing industry processes to gradually shift away from their intended design. This phenomenon, known as operational drift, can have a significant impact on your margins and overall profitability.

Addressing operational drift requires a proactive and systematic approach. To help, we’re sharing everything you need to know about how operational drift is impacting your staffing firm—and steps you can take to prevent drift and create long-term efficiencies.

Understanding Operational Drift

Before you can start combating drift within your staffing firm, it’s helpful to be able to identify where drift might occur, what could cause it, and what the larger impact can be for your business.

What can operational drift look like?

Drift can show up in many ways, including:

Scope creep: Projects or tasks gradually expand beyond their original scope, leading to increased costs and delays.
Process inefficiencies: Small inefficiencies in your processes accumulate over time, adding up to significant losses.
Employee turnover: When key employees leave, their knowledge and expertise often go with them, disrupting operations and leading to mistakes.
Lack of standardization: Inconsistent processes and procedures across different departments or locations can lead to confusion, errors, and wasted resources.
Poor communication: When communication channels are not clear or effective, it can lead to misunderstandings, rework, and missed deadlines.

What causes operational drift?

Leadership, staff, company culture, and technology will all impact your risk for operational drift. This includes:

Management complacency
Leadership lacking flexibility or change mindset
Gaps in understanding of industry trends and customer needs
Absent or unclear company goals/vision
Groupthink among staff, creating resistance to change

What are the consequences of operational drift?

When drift hits your staffing firm, there are several ways it can impact your bottom line:

Reduced profitability: Increased costs and inefficiencies directly impact your margins.
Missed deadlines: Failure to meet deadlines can damage your reputation and lead to lost customers.
Employee frustration: Working in a chaotic and inefficient environment can lead to employee burnout and turnover.
Increased risk: Deviating from established processes can increase the risk of errors, accidents, and legal issues.

How to Defend Against Operational Drift In Your Staffing Firm

It’s impossible to avoid drift completely. Unless you are a company with a direct influence over the direction of your industry—such as Apple, Amazon, or Google—your business is constantly adapting to external changes and forces. The key is to prevent drift as much as possible and establish clear action steps for when drift occurs.

Here are 7 ways you can prevent and address operational drift.

#1: Identify what’s important to your business

The first step to avoiding operational drift is to identify and document the top priorities for your staffing firm.

This means understanding your business goals and objectives and determining the key metrics that you need to track to measure your progress. Once you know what’s important, you can start to develop processes and procedures that will help you achieve your goals.

What can this look like for your staffing firm?

Create simple documentation laying out the vision and/or goals your team, the WHY behind them, and what steps are needed to get there.
Once crafted, have leaders share it with their employees. Every quarter, review the action plan and discuss each team’s alignment with these goals.
Even if drift has occurred, you’re catching it every few months rather than years later when it’s more difficult to address.

#2: Invest in the right areas

Once you’ve established what’s most important to your staffing firm, it’s time to invest in the right areas that will bring you the most value. This means allocating resources to the people, processes, and technology that will help you achieve your goals.

Areas within a staffing firm where leaders need to remain in tune with are: 

Recruiting Operations
New Hire Onboarding
Payroll & Back Office
Reporting & Metrics
Internal Training
Employee Retention
Technology Utilization

#3: Take advantage of your existing technology

Your tech stack is the foundation of your business. The right one will have ample opportunities for you to automate tasks, streamline your workflows, and improve your communication.

Most staffing firms only utilize 30% of the technology they have access to—leading to a massive gap in recognized value.

Find out what you could be doing to take advantage of the functionality available to you in your existing tech stack. That might mean reaching out to your ATS/CRM provider for additional training.

#4: Control your risk

Operational drift can also be caused by risks that you don’t anticipate. To control risk, you need to put in place systems and processes that will help you identify and mitigate potential problems.

This includes having a risk management plan in place and regularly reviewing your processes to identify and address any potential risks.

#5: Stick to defined processes

One of the most important things you can do to avoid operational drift is to stick to the process. This means following the procedures that you have put in place—and not making any exceptions. When you make exceptions, it creates a precedent that can lead to further exceptions and, eventually, operational drift.

This can be easier said than done, though. How do you help change stick and ensure your teams adhere to best practices?

Involve your internal staff in decision making. This helps them feel heard and valued, and it also helps ensure your established practices reflect their actual day-to-day needs.
Standardize processes. Develop and implement standardized processes and procedures across the organization to ensure consistency and efficiency.
Set clear expectations. Ensure that employees understand their roles, responsibilities, and performance expectations, complete with KPIs.
Invest in training and development. Provide employees with the necessary training and development opportunities to stay up-to-date with the latest best practices.
Conduct audits and reviews. Regularly assess your processes to identify areas for improvement and ensure they align with your strategic goals.
Foster a culture of continuous improvement. Encourage employees to identify and suggest improvements to existing processes.

#6: Foster a culture of continuous improvement

Teams that remain open to change will be better prepared to prevent, identify, and address drift.

Train Your Managers

Culture-building starts from the top-down, which is why it’s so important to train your managers in cultivating the culture that’s right for your business.

Encourage managers to:

empower their employees to bring solutions, rather than leading with their own ideas
performing regular SWOT analysis meetings
Solicit counterpoints or “Devil’s advocate” perspectives
actively soliciting employee feedback

With this approach, you can foster a fearless culture to prevent unhealthy groupthink and promote a positive change mindset.

Conduct Employee and Customer Surveys

Employee surveys give you insight into company morale, understanding of goals, opportunities for improvement, and more—helping you to identify key factors that impact drift.

From a customer standpoint, regular surveys help you understand how you are showing up in the marketplace. They can provide valuable information on the strength of your partnership, weaknesses, competitive advantages or disadvantages, and more.

Information from these surveys can shape strategic direction and cut off any operational drift that may exist.

Promote Curiosity

Consistently bringing in revenue and feeling established is a great milestone. However, it’s easy to get complacent. If you don’t lead with curiosity, you risk falling into keeping the status quo rather than driving continuous growth.

What curiosity looks like for staffing professionals:

Asking difficult questions
Learning from your mistakes and making changes when necessary
Networking with industry peers
Understanding the competitive landscape
Leaning into what keeps your customers up at night

By staying curious, you can help to ensure that your business processes are always evolving and improving.

#7: Lean on experts

In an industry that typically holds things close to the chest, we’re seeing a big shift where more companies have eliminated the traditional fear of giving up control and leveraging expert third party companies. As a result, these firms are opting to invest their time and energy into strategies centered around their own sales and recruiting operations.

The back office is the single largest area in which a staffing firm can become more efficient. Many firms are outsourcing their payroll, tax processing, W-2 management, collections, and more—freeing up more time for their teams to focus on other areas of their business.

Some of this outsourcing can happen with integrations in your tech stack. Integrations are also helpful in offloading manual tasks for your teams (e.g., WOTC and Unemployment Claim Management).

When in doubt, hiring a consultant can be a valuable investment in eliminating operational drift. Consultants can help you define your business goals, audit your existing processes, and learn how to better utilize the existing technology available to you. Working with a consultant often accelerates incremental change, ultimately shaping the advancement of any organization—big or small.

Operational drift is a serious problem that can have a significant impact on a staffing firm’s success. By implementing these strategies, you can minimize its impact on your margins, improve overall efficiency, and position your staffing firm for sustainable growth.