Staffing Industry Trends and Challenges

Advances in technology have been disrupting industries at breakneck speed over the past 20 years, and the staffing industry is no different. First, it was online job boards like Monster and Craigslist. Then it was job aggregators like Indeed, collecting job postings from other sites across the web.

Next, LinkedIn created a place where potential candidates could be found, even if they hadn’t actively applied for a job. And sites like Glassdoor provided a venue for user-generated content, bringing the Yelp model to the job search.

And on top of those often never-ending changes, we also now have the pandemic, turning every industry on its head trying to figure out remote work, technology, and more.

Staffing professionals and agencies alike would agree that there have been both ongoing and new challenges that have arisen due to shifts each year with new advancements in technology, new behaviors of job seekers, and now, new pandemic necessitated remote recruiting.

We’ve pinpointed the top 10 challenges that we’ve identified within staffing firms due to one or all of the above circumstances. Along with these challenges, we’ve also identified the trends that have emerged from them and how the use of technology is supporting the resolution of these challenges in an efficient and effective manner.

The Top 10 Challenges Staffing Agencies are Facing

1. Skill Shortages

In a competitive market, it can be tough to find a candidate with the exact blend of experience and qualifications that you’re looking for.

Between a lack of specific skills needed for a job combined with high competition, finding candidates with the right skills can feel more difficult than finding a needle in a haystack.

As we look towards trends in finding top talent in job seekers, what we see is the need to reskill or upskill candidates that may not have the specific certifications or qualifications, but fit in all the other ways with the company. Candidates who are ready to learn and share a company’s values can fill a position with great success, once they receive the proper training.

The right person can learn what they need to know. If your existing clients (or new ones) are willing to train, consider finding the best candidate who is willing to learn, that checks the most boxes, and provide them the training to become that perfect fit.

2. High Competition

Technology has certainly allowed for more competition, and at a much faster pace. Many businesses are not only challenged with a skills shortage, but are also facing difficulties snagging great candidates quickly.

In an already highly competitive industry with a lack of skills and people, it’s imperative to differentiate to stand out against the competition. Great branding and incredible candidate engagement is an integral ingredient to successful recruitment. Combined with technology that can be watched 24/7, staffing professionals can quickly and efficiently find and communicate with highly-sought candidates before the competition.

 3. Lack of Speed

In the hiring process, speed matters. In fact, top talent is usually hired within 10 days of being on the market.

If you’re still recruiting the old-fashioned way, you won’t be recruiting for long. The name of the game is speed and efficiency. Both need to work together to find the best candidates quickly to fill open jobs and demonstrate your business performance to your clients.

Using automation has become more than a trend, but really a necessity for many staffing firms.

4. Increased Transparency 

Between clients and candidates, a challenge has always been transparency in the process.

According to a G2 survey, 52% of candidates don’t receive any communication in the two to three (or more) months after applying.

In our opinion, that’s just bad business. Regardless of whether a candidate has applied, been rejected, or is in consideration, consistent communication is essential to driving business forward for the long haul.

The most successful way to counteract this challenge is through marketing automation to set up specific sequences that are triggered based on actions taken.

From the client perspective, collaboration and all-access can build trust and allow for more streamlined hiring processes for easier remote recruiting. From video interviewing and custom reports through cloud-based software, clients can be in the know right now.

5. Outdated Strategies

Thinking that the processes you have established or in place now will always work is a dangerous game to play. People, technology, values, etc. are always changing. And so is the way we take information in and process information. Strategies need to be relevant and flexible. Tech is used to support the strategy.

The only thing that is constant is change.”

Embracing new and emerging strategies is a trend that will usually always give back ten fold.

Social media provides the opportunity to position your company as an authority in your specific field, and to develop the personal brands of your recruiters, which is a powerful way to drive more revenue.

It’s also a great way to reach not only potential customers but candidates as well. In fact, 92% of recruiters report using social media to find candidates.

Unsurprisingly, the majority of hirers (96%) are on at least one of the “big three” social media sites. 77% of recruiters are on LinkedIn, and 63% are using Facebook. But there are other platforms out there that can be helpful in your recruiting efforts.

And it’s not just the big players either.

Niche platforms can provide you with quality candidates already in the fields and industries your placing for. Sites like Github and Stack Overflow can be great resources. Looking for healthcare professionals? Try AllNurses or the Mayo Clinic Social Media Network.

By sharing quality content and key points, such as diversity and inclusion, on these sites and participating in discussions, prospects will see that you have your finger on the pulse of the industry.

6. Poor Workplace Engagement

From having to pull away from the office and needing to operate remotely to business closures for periods of time and more, the pandemic sure taught us a lesson on how to (and not to) engage with one another.

Whether within your own staffing firms or with clients and candidates, engagement has always been a challenge, now shown on a global spotlight with the pandemic.

Trust, accountability, and growth all result from positive engagement.

Technology has proven to be a tried and true trend to enhancing engagement, especially in a remote working world. For internal workplace engagement, using technology, such as our TrackerChat, means accessible and fast communication between team members, regardless of where or when.

For candidate engagement, it’s all about automating the communication process – from hiring to onboarding and beyond.

7. The Cost of Keeping Up

The most expensive cost with low ROI for many staffing agencies is manual processes. Not only does manual data entry account for lost time (up to 8 hours per week from some studies), it also doesn’t eliminate human error.

If you’re still doing many day-to-day tasks manually, your cost to keep up is rising.

Using tech to streamline your manual processes can significantly reduce your full- time employees time to focus on building and nurturing relationships while also eliminating human error.

Using tech also allows for custom reporting at your fingertips to know where focus should be, if you’re hitting your KPIs, and for full transparency. Lastly, it can support diversity initiatives, meaning your not missing the mark on important aspects for candidate sourcing and providing a fair and unbiased hiring process.

8. The Continued Growth of the Freelance Economy and Remote Recruiting

One thing that the pandemic has shed light on from a global spotlight perspective is that remote work is here to stay for the long haul where applicable.

While this can be a significant challenge for many businesses, it’s also a trend that’s been on the rise for many years and felt throughout the staffing world. As the nature of work shifts to one of more independence, a remote workforce has become more appealing to both employers and employees.

The challenge lies with those companies who need in-person workers as well as with retention of current full time employees. HR professionals need great experiences and communication to support retention, especially for passive job seekers.

Employers face a much larger candidate pool when they’re not limited to the company’s immediate location. Companies can rent less office space for fewer onsite employees and pay lower salaries by hiring staff from more affordable markets, providing significant cost savings. It may also reduce turnover with 76% of workers saying that flexible hours would make them more likely to stay with their current employer.

While this can be a significant challenge for many businesses, it’s also a trend that’s been on the rise for many years and felt throughout the staffing world. As the nature of work shifts to one of more independence, a remote workforce has become more appealing to both employers and employees.

The challenge lies with those companies who need in-person workers as well as with retention of current full time employees. HR professionals need great experiences and communication to support retention, especially for passive job seekers.

Employers face a much larger candidate pool when they’re not limited to the company’s immediate location. Companies can rent less office space for fewer onsite employees and pay lower salaries by hiring staff from more affordable markets, providing significant cost savings. It may also reduce turnover with 76% of workers saying that flexible hours would make them more likely to stay with their current employer.

Remote workers report that they can work with more focus and fewer interruptions when they work from home. 86% say remote work reduces stress, and 50% report taking fewer sick days.

Great workflow and communication tools make it easier than ever to work with people halfway around the world. And with our Video Interviewing feature, everything from hiring and onboarding to successful placements can be done virtually. So expect to widen the net of possible candidates to cities, states, and even countries you may not have thought of before.

9. Unrealistic Employer Expectations

The hiring process is a challenge in and of itself, but add in unrealistic expectations and it can turn bad quickly. It’s not only about hiring for the position, but rather about hiring the right person for the position.

According to an HRexchangenetwork article, on average, companies lost $14,900 on every bad hire.

When assessing your hiring processes, whether you’re an HR professional, recruiter, or staffing agency as a whole, expectations need to be realistic and communicated. Tech can support in keeping these expectations in check while also ensuring you’re not missing out on opportunities for top talent for your open jobs.

10. Unstable Market

You can do your best to project the market, but you’re never going to be able to control it. You’re only able to control your processes and how your recruiters go about sourcing candidates, engaging them, and nurturing them.

In an unstable market, the best you can do is always be ready and flexible. Technology allows for quick and easy shifting of these processes and finding relevant and important data fast.

Staffing Challenges Can be Overcome with the Right Technology and Solutions

All of the above challenges can easily be resolved with the right tech. At Tracker, we understand that not all tech is created equal. And not all tech looks at the full recruitment process from job creation and posting all the way through re-engagement of placed candidates.

Our industry-leading ATS software was developed alongside those in the industry, doing the work, to ensure we’re providing the most supportive resources and tools to streamline and recruit faster and more efficiently.

Our all-in-one platform was built for you, the staffing professional, to save you time, money, and allow you to do the things you need and the things you want.

Contact us today for a free demo of our industry-leading ATS software.

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