In the spirit of full transparency, I am personally disappointed that we didn’t land more staff augmentation engagements in the first two months of 2024. As I alluded to in my January update, and will explain below, we have put forward over three dozen consultant profiles in the first 75 days of 2024. And while I remain engaged with all of our current and prospective clients, we have only engaged one new consultant year-to-date.
The good news is that we have received extensions for 50% of our consultants already in 2024. Extensions never surprise me. Once our clients see the talent and experience of the people on the Augment platform, they won’t let you go. That’s why many staff augmentation engagements last for more than a year, in many cases multiple years.
And we signed up a new consulting partner that is landing engagements with bank clients almost monthly. They see us as a gold mine for talent as they continue to grow. Through our partnership, they can remain focused on winning projects with the knowledge that they can staff those projects with great people. I have already shared profiles for a new project with our partner and facilitated our first job fit conversations!
What I’m Seeing in the Market
Now, regarding my doom and gloom about the state of new engagements, I want to provide some color for what I am seeing in the market:
Banks are putting the brakes on hiring. While we have not received any news from our clients, I have heard of one Top 30 bank that recently revised its services agreement with vendors related to change of control. I know a thing or two about Mergers & Acquisitions and that sounds ominous. Without a doubt, there will be a lot of consolidation in the bank space in the next decade. And while banks merge, à la Capital One–Discover, attrition could reasonably be backfilled by short-term staff augmentation resources.
Several fintechs have been told by their existing private equity investors to plan for several years without access to new cash investments. Similar to banks, fintechs are putting hiring on hold and being very careful where they allocate cash.
Consumer delinquencies are rising. Banks are beginning to shift focus to collections, recoveries, and risk management, primarily by reallocating existing resources.
Mortgage lenders lost $2,109 for every loan they originated in the fourth quarter of 2023. That marks 7 straight quarters of lenders losing money for every loan originated. If you are asking why someone would stay in such an industry, join the club.
Mortgage lenders are beginning to get introduced to true third party risk management and cyber risk assessments. I believe mortgage lenders will be investing a lot in these areas in the next 12 months as counterparties begin mandating them. Did you know that during the final two weeks of 2023, almost the entire mortgage industry was held hostage when First American Financial was hacked?
So Where Do We Go From Here?
I remain convinced that high quality staff augmentation will continue to grow even in down markets — in fact, especially in down markets. Half of our consultants on projects are fractional resources, supporting clients 10, 20, 30 hours a week. Our model saves the client money and they get people who are probably better than anyone they could even hire if they tried.
But we need to get through the temporary freeze as companies begin to transition from “stop the presses” to “invest smartly, and only where we need to invest.” As year-end bonuses land in employees’ bank accounts, they’ll depart for a new job. I expect that annual migration to help begin the thaw. With our focus on analytics, data science, risk management and compliance, they’ll be talking about Augment Analytics!
Behind the Scenes: Meet Auggie
Behind the scenes at Augment Analytics, I am happy to announce that we rolled out our beta version of Auggie, a chatbot that helps me quickly source our entire database of available consultants based on client resource requests. Auggie rank orders candidates by match and automatically summarizes each consultant’s background and explains why they might be a fit for the client request.
For now, I am limiting use of Auggie to my responses to client requests, but even this one use-case enables scalability of our 50+ and growing platform. I envision future releases that will allow consultants to improve their own resumes as they learn how they score on various requests where they believe they have a strong background. And in the long run, we’ll put Auggie in the hands of our clients so they can source the perfect resource without the hassle of talking to me. That’s right, AI is going to take away my job! Thanks a lot, Alek!
Update: Auggie has since grown into “Ask Auggie,” the search tool in our new consultant platform. Read the story →
