Staffing Strategies for Mid-size Companies

Sarah Steimer
Marketing News
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Key Takeaways

​What? Middle market companies don’t often get the workforce support they need.

So what? Middle market companies struggle with awareness among prospective talent.

Now what? Middle market companies should consider both private- and public-sector solutions, including banding together with similar middle market companies to spur the appropriate training and talent.

​Sept. 26, 2017

Middle market companies can proactively address their workforce challenges with internal and external solutions

Mid-size companies are something of the middle child in the business family. The youngest children, entrepreneurs and startups, are doted on. The oldest, large, established companies, are first in line for resources or acknowledgement.

As many middle children would likely attest, the mid-size market role can feel a bit invisible.

The National Center for the Middle Market identified this out-of-sight, out-of-mind quality as a key reason the sector has struggled with workforce challenges. NCMM Managing Director Doug Farren says talent is consistently one of the top challenges identified by the 1,000 C-suite executives polled in the center’s quarterly middle market indicator survey.

The report, “Help Wanted: How Middle Market Companies Can Address Workforce Challenges to Find and Develop the Talent They Need to Grow,” notes that middle market companies create more new jobs than any other sector of the economy, but it’s this exact appetite for employees that makes the lack of access to candidates rather painful.

“Middle market companies in general struggle with an identity crisis,” Farren says. “[Job] candidates simply don’t know of them and certainly don’t know to look to them as a first choice when thinking about a place to work.”

About 85% of middle market companies are privately held, and many operate in B-to-B formats, hidden from the view of many job seekers. While the average consumer or general public may recognize big brands or businesses, middle market companies often don’t have much brand recognition. Many well-known companies tend to be more active in the recruiting space on college campuses, offer internships and run other recruitment programs.

The second issue the National Center for the Middle Market identified—and noted in previous research as well—is the lack of available personnel at mid-size companies to run workforce search, support and development efforts.

“Their structure, particularly at the leadership and management level, tends to be pretty thin,” Farren says. “They don’t have large staffs or deep leadership teams, and that would certainly apply to the HR function. It limits their resources and their ability to get deeply involved in a lot of what we would consider more traditional workforce recruiting and development activities.”

It’s not uncommon, he says, to see an HR department at a middle market company that consists of one or two people, and sometimes the head of HR also leads other departments. The report also found 46% of survey respondents say their HR department is primarily operational, rather than strategic.

Working with the Metropolitan Policy Program under the Brookings Institution, the center presented two approaches for the solution: what middle market companies can do themselves and what the institutional environment can do.

Company-controlled and Private Sector Solutions

Farren says middle market companies should think less operationally and more strategically in their talent-planning activities.

“That could mean putting certain strategies and programs in place, like an internship program,” Farren says. “I can’t tell you how many middle market companies we’ve talked to on a regular basis that just don’t have those types of things.”

An internship program is relatively simple to implement, Farren says, but does require an investment of time: determining where an intern would make the most sense or how to effectively structure the program so both sides benefit, for example. A particular upside for the company is the opportunity to expose younger talent to middle market culture and what it’s like to be part of this economic sector.

The “Help Wanted” report also found only 41% of survey respondents say they have set, ongoing outreach efforts in place, compared with 59% who say they wait until a specific position needs filling. In addition, 35% of middle market vacancies are filled from within because middle market companies tend to seek fully qualified candidates from outside instead of looking for someone within the company to advance. Companies also have the opportunity to work among themselves to problem-solve. Firms can develop stronger relationships with professional organizations, trade groups or other such associations to encourage talent planning. The goal would be to solve a talent issue shared by members of the group.

“If I’m a middle market company, and I want to hire three or four really skilled welders, I can’t necessarily go to a community college and have them customize a program for that,” Farren says. “But if I could collaborate with five, six or 10 other companies that also need three or four welders, now you’ve created a need for 30 or 40 welders and that becomes a more appealing proposition for a trade school or a community college to then develop a custom program that trains 40 welders to be placed at those companies.”

Public Policy and Intermediary Solutions

Farren says many public policy programs have a tendency to ignore the middle market and focus on startups or where the largest resource needs are, which often overlooks the middle market.

The training organizations within the public sector need to develop programs specifically for middle market companies, Farren says, or consider how they can make adjustments to provide resources that are a better fit for mid-sized companies. Martha Ross, a fellow at the Metropolitan Policy Program, says educational, training and job placement organizations offer great resources, including public or publicly funded entities (for example, the network of American Jobs Centers), two- and four-year colleges, high school career and technical education programs and nonprofit training organizations. The problem, she says, is that it’s a system characterized by decentralization and multiple actors, which can be tricky for companies to navigate.

“One environmental-focused solution is to develop intermediaries that serve as a bridge between employers, educators and workers,” Ross says. “This could take the form of a workforce development board, a nonprofit, a chamber of commerce, a loose collaborative, etc., but the goal is to identify the skill needs of area employers and help align education and training programs accordingly.”

Ross says effective intermediaries allow educators and employers to avoid the inefficiencies of individual engagements by aggregating employer needs across a given sector. These intermediaries also set up forums for small and medium-sized firms to join forces with larger employers for economies of scale in training investments. Ross points to one example, Kentucky FAME, or the Federation of Advanced Manufacturing Education consortium. An executive from a middle market firm participating in Kentucky FAME reported in “Help Wanted” that the program was especially beneficial to companies of his size, as he doesn’t have the staff to do outreach to educators and potential students.

Another solution, Ross says, is for public entities to better tailor their services to meet labor market demands in their area. One example highlighted in the paper is Skill Up in Cuyahoga County, Ohio, which exists within the Department of Economic Development. The program helps employers address their skill needs by providing resources and expertise. More specifically, Skill Up offers assistance with defining and documenting job duties and skill requirements, custom roadmaps for training employees to industry standards and evaluating their skills and a list of providers for technical instruction and credentials.

“Small companies may not even be at the point where they need to access these resources and big companies have probably been using these resources for years, and in some ways that may have influenced the design and delivery of some of these public sector programs,” Farren says.

Middle market companies would need to better define their specific needs, such as a more qualified sales force or skilled trades in a specific area to support growth. There’s a burden that would be placed on the middle market to gain a clear understanding of where there may be gaps in processes, and then to articulate those needs.

The solution to middle market talent gaps—whether internal or in the public or private sectors—may rest on companies’ ability to collaborate; however, many don’t define themselves by their size.

“When you talk to a company, they’re more likely to identify by their industry, by their location or by their ownership type, rather than to say they’re a mid-size firm,” Farren says. “They need to recognize that they’re not a start-up, they’ve outgrown that phase; but they also know that they’re not General Electric or Procter & Gamble or Nationwide. Intuitively, they may realize that, but the term middle market is something that we see get used without the companies themselves identifying into that segment.”

Farren says the challenge is in getting middle market companies that are used to working within their industry to instead collaborate with like-sized companies to solve talent needs. Whom this task falls to is unclear.

“It’s easy for us to sit here and say that’s a good solution, but I don’t see a lot of those firms initiate that and do it on their own,” Farren says. “There has to be some type of ignitor or convener. It could be a chamber of commerce or another natural convener like a trade group or organization, but somebody that can bring these companies together and say, ‘Look, you all have a common need, and here’s how we can solve that.’ It’s by working together and coming up with solutions that can benefit everyone.”

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Author Bio:
Sarah Steimer
Sarah Steimer is a staff writer for the AMA's magazines and e-newsletters. She may be reached at or on Twitter at @sarah_steimer.
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