What is an IT Staffing Company? Definition and Evolution
Definition
An IT staffing company (called ESN in France - Entreprise de Services du Numérique) is a firm that provides IT services to other businesses. The company's consultants typically work at client sites, either on a time & materials basis or fixed-price projects.
The IT Staffing Market in 2025
| Indicator | Value |
|---|
| Number of IT staffing firms (France) | ~15,000 |
| Sector revenue | €62 billion |
| Total employees | 530,000 |
| Annual growth | +5 to 7% |
| Top 10 companies | Capgemini, Sopra Steria, Atos, Alten... |
The Business Model
3 Billing Models
| Model | Description | Typical Margin | Risk |
|---|
| Time & Materials | Billing per day, consultant at client site | 20-35% | Low |
| Fixed Price | Set price for defined deliverable | 25-45% | High |
| Managed Services | Dedicated team, outcome commitment | 30-40% | Medium |
Revenue Anatomy
Basic formula:
```
Revenue = Number of consultants × Utilization rate × Average daily rate × Working days
```
Example for a 50-consultant company:
| Variable | Value | Calculation |
|---|
| Consultants | 50 | - |
| Utilization rate | 90% | 45 consultants billed |
| Average daily rate | €550 | - |
| Working days/year | 218 | - |
| Annual revenue | €5.4M | 45 × 550 × 218 |
Typical Cost Structure
| Cost Item | % of Revenue | Comment |
|---|
| Consultant salaries | 55-65% | Largest item |
| Social charges | 20-25% | ~45% of gross |
| Overhead | 5-8% | Offices, admin, accounting |
| Sales & marketing | 3-5% | Client acquisition |
| Management | 3-5% | Leadership salaries |
| Net margin | 5-12% | Before taxes |
Gross Margin per Consultant
Gross margin calculation:
| Element | Monthly Amount |
|---|
| Daily rate billed | €550 |
| Days billed/month | 19 |
| Monthly revenue | €10,450 |
| Consultant gross salary | €4,200 |
| Employer charges (~45%) | €1,890 |
| Total consultant cost | €6,090 |
| Gross margin | €4,360 (42%) |
Essential KPIs for IT Staffing
Operational Performance Indicators
| KPI | Definition | Benchmark | Target |
|---|
| Utilization rate | % consultants on assignment | 85-90% | >90% |
| Bench rate | % consultants without assignment | 10-15% | <10% |
| Average daily rate | Average rate billed | €450-600 | Growing |
| Time to placement | Days between availability and assignment | 15-30 days | <15 days |
| Average assignment length | Months per assignment | 8-12 months | >12 months |
Financial Indicators
| KPI | Definition | Benchmark | Alert if |
|---|
| Revenue per consultant | Revenue / number of consultants | €90-120K/year | <€80K |
| Gross margin | (Revenue - direct cost) / Revenue | 30-40% | <25% |
| Net margin | Net income / Revenue | 5-12% | <5% |
| Working capital | Client receivables - payables | 60-90 days of revenue | >90 days |
| DSO | Average client payment time | 45-60 days | >75 days |
HR Indicators
| KPI | Definition | Benchmark | Target |
|---|
| Turnover | Departures / average headcount | 15-25% | <15% |
| Time to hire | Days to recruit | 30-45 days | <30 days |
| Cost per hire | Total cost / recruitment | €5-10K | <€5K |
| Referral rate | % hires from referrals | 20-30% | >30% |
| Consultant satisfaction | NPS or equivalent | 20-40 | >40 |
Recruiting for a Staffing Company
The Recruitment Challenge
Recruitment is the lifeblood of a staffing company. Without consultants, no revenue.
Specific difficulties:
- Technical talent shortage (60,000 missing engineers/year)
- Competition from other firms and end clients
- Sometimes negative image of the staffing model
- High turnover (18-25% on average)
Effective Recruitment Channels
| Channel | Cost | Effectiveness | Volume |
|---|
| Referrals | €1-3K bonus | ⭐⭐⭐⭐⭐ | Medium |
| LinkedIn (organic) | Time | ⭐⭐⭐⭐ | Medium |
| LinkedIn Recruiter | €8-15K/year | ⭐⭐⭐⭐ | High |
| Job boards | €200-500/posting | ⭐⭐⭐ | High |
| Recruitment agencies | 15-25% salary | ⭐⭐⭐ | Low |
| Schools / apprenticeships | €2-5K/fair | ⭐⭐⭐⭐ | Medium |
| Converted freelancers | Attractive package | ⭐⭐⭐⭐ | Low |
Retention Strategy
| Lever | Retention Impact | Cost |
|---|
| Competitive salary (+10% market) | ⭐⭐⭐⭐⭐ | High |
| Remote work (3+ days) | ⭐⭐⭐⭐⭐ | Low |
| Assignment choice | ⭐⭐⭐⭐⭐ | Low |
| Continuous training | ⭐⭐⭐⭐ | Medium |
| Events / community | ⭐⭐⭐ | Medium |
| Profit sharing | ⭐⭐⭐⭐ | Variable |
| Close management | ⭐⭐⭐⭐⭐ | Low |
The Bench: A Staffing Company Nightmare
Understanding the Bench
Bench time is when a consultant isn't on assignment, so not billed, but still paid.
Cost of bench time:
| Bench Duration | Cost to Company (€4K gross consultant) |
|---|
| 1 week | ~€1,500 |
| 1 month | ~€6,000 |
| 3 months | ~€18,000 |
Acceptable Bench Rate
| Rate | Situation | Action |
|---|
| <5% | Excellent | Recruit more |
| 5-10% | Good | Maintain |
| 10-15% | Acceptable | Optimize staffing |
| 15-20% | Concerning | Review sales |
| >20% | Critical | Emergency plan |
Strategies to Reduce Bench Time
1. Anticipate assignment endings
- Automatic alerts 2-3 months before end
- Pre-positioning on new opportunities
2. Diversify client portfolio
- Don't depend on a single client (20% max rule)
- Mix T&M / fixed-price / managed services
3. Make bench time productive
- Training and certifications
- Pre-sales and proposal writing
- Internal projects and R&D
- Contributing to recruitment (referrals)
Essential Tools for IT Staffing
Recommended Tech Stack
| Need | Tools | Monthly Budget |
|---|
| CRM | Salesforce, HubSpot, Pipedrive | €50-300/user |
| ATS (recruiting) | Cobalt, Bullhorn, Recruitee | €100-500/user |
| Time tracking | Harvest, Clockify | €5-15/user |
| Invoicing | QuickBooks, Xero, FreshBooks | €30-100/month |
| Project management | Monday, Notion, Jira | €10-30/user |
| Communication | Slack, Teams | €7-15/user |
| HR | BambooHR, Gusto | €5-20/user |
The Centralization Challenge
The staffing company problem: too many tools that don't communicate.
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Consequences:
- Duplicated and inconsistent data
- Time wasted on re-entry
- Fragmented view of activity
- Time-consuming manual reporting
Solution: Unified platforms like Cobalt that centralize CRM, ATS, staffing, and analytics.
Process Automation
| Process | Possible Automation | Time Saved |
|---|
| CV sourcing | AI + enrichment | 5h/week |
| Consultant/assignment matching | Algorithms | 3h/week |
| Candidate follow-ups | Email sequences | 4h/week |
| Skills profile generation | Templates + AI | 2h/profile |
| Weekly reporting | Automatic dashboards | 3h/week |
| End-of-assignment alerts | Auto notifications | 1h/week |
Starting a Staffing Company: Key Steps
Prerequisites
| Element | Recommendation |
|---|
| Industry experience | 3-5 years minimum in staffing/consulting |
| Client network | 2-3 potential clients identified |
| Candidate network | Ability to recruit 5-10 profiles |
| Starting capital | €50-100K (significant working capital) |
| Partners | Sales + technical ideally |
10 Steps to Launch
- Market study: positioning, target, differentiation
- Business plan: 3-year forecast, working capital, break-even
- Legal setup: incorporation, bylaws
- Financing: investment, bank loan
- Tools: CRM, ATS, accounting, HR
- First clients: network, prospecting
- First hires: founding consultants
- Processes: recruiting, staffing, assignment tracking
- Sales development: team structuring
- Scale: mass recruiting, new markets
Typical Break-Even
| Size | Minimum Revenue | Net Margin |
|---|
| 5 consultants | €500K | 3-5% |
| 10 consultants | €1M | 5-8% |
| 20 consultants | €2M | 7-10% |
| 50 consultants | €5M | 8-12% |
Mistakes to Avoid
10 Classic Mistakes
| Mistake | Consequence | Solution |
|---|
| Depending on one client | Fatal risk if lost | Max 20% revenue per client |
| Hiring without orders | Costly bench time | Hire on confirmed needs |
| Neglecting assignment follow-up | Unhappy client and consultant | Structured regular check-ins |
| Under-pricing to win | Race to the bottom | Position on value |
| Ignoring turnover | Talent hemorrhage | Active retention strategy |
| Fragmented tools | Operational inefficiency | Centralize tools |
| No sales process | Dependence on founder network | Structure prospecting |
| Growing too fast | Working capital explodes, quality drops | Controlled growth |
| Neglecting employer brand | Recruiting difficulties | Invest in image |
| No specialization | Head-on competition with everyone | Niche or expertise |
2025 Trends for IT Staffing
What's Changing the Market
| Trend | Impact | Opportunity |
|---|
| Generative AI | Task automation | New services, efficiency |
| Talent shortage | Recruiting war | HR differentiation |
| Nearshore/Offshore | Price pressure | Hybrid models |
| Freelancing | Individual competition | Conversion or complementarity |
| CSR / Impact | Employee expectations | Responsible positioning |
| Cybersecurity | Explosive needs | Diversification |
| Cloud / Data | High-demand skills | Team upskilling |
Winning IT Staffing Companies
Top-performing companies in 2025 are those that:
- ✅ Invest in employee experience
- ✅ Automate internal processes
- ✅ Specialize (tech, sector, role)
- ✅ Develop a real employer brand
- ✅ Use AI to increase efficiency
- ✅ Offer meaning and impact to consultants
Conclusion: Succeeding in IT Staffing in 2025
The staffing model remains robust and attractive despite challenges. The market is buoyant (€62B, +5-7%/year) and digital skill needs are exploding.
But the companies that will succeed are those that:
- Put people at the center (consultants AND clients)
- Master their KPIs and manage by data
- Invest in tools for efficiency
- Build a brand that attracts talent
- Adapt to new expectations (remote work, meaning, flexibility)
The staffing business is evolving. The best will evolve with it.
