The big story in staffing this year is the lack of qualified talent.
“We are in a full employment economy, which means there are too many orders and not enough candidates,” said Barry Asin, president of Staffing Industry Analysts headquartered in Mountain View, California. Even industrial and low-skilled positions are tough to fill in the current economy, he said. “It’s a good problem for a staffing agency to have, but it’s still a problem.”
And the current immigration environment will only make things worse, said Vinda Souza, vice president of marketing for Bullhorn, a staffing industry technology firm. Challenges in getting visas and the hostile environment for foreigners is making it hard to source talent she said. It’s also causing many staff firms to delay expansion plans. “For decades these firms have had evergreen plans to expand, but not anymore.”
In this candidate-driven market, staffing vendors serve two masters. They have to meet expectations from frustrated clients who expect great talent with tough deadlines, and they have to appeal to passive candidates by offering more user-friendly platforms, engagement strategies, and perks that will tempt them to make a move.
One trend to emerge from these dual pressures is an investment in training programs to upskill candidates for hard-to-fill roles.
“There is a huge opportunity for clients and staffing firms to close the last miles of the education system through training programs,” Asin said.
Several staffing agencies are now venturing into this “build-your-own-talent” space. For example, Revature, a Virginia-based tech outsourcing firm, now offers free 12-week full-time boot camps on college campuses to teach students Java, data management, and other hard-to-source skills. In exchange for the free training, students have to commit to work for the company for at least two years earning $50,000 to $65,000 annually.
And earlier this year, global staffing firm Adecco acquired the New York-based coding boot camp General Assembly for $412.5 million. General Assembly specializes in rapidly retraining workers for high-demand coding-specific career paths, which should give Adecco an advantage in filling these positions.
This increased focus on providing training addresses the talent shortage while helping staffing firms set themselves apart, Asin said. “If you can’t find the talent, you have to create it.”
The Future Will Be Automated
Training alone isn’t going to solve all of the staffing world’s woes. Automation has also taken center stage as a trend that promises to generate efficiencies and change the way many firms operate.
“People in staffing are inundated with predictions about automation, but they still aren’t sure if it’s a threat or a benefit,” Souza said.
Souza believes it will be the latter. “Automation provides an opportunity to increase profits and speed placement of candidates,” she said. For low-wage, high-volume hiring, automation tools can quickly scan applications, set interviews and complete online forms. “It is a more efficient way to fill these positions.”
For higher-end recruiting, automation also adds value by taking over low-level data entry and process management tasks, which frees talented recruiters to focus on what they do best — building relationships with potential candidates.
“That human interaction will never be automated,” Souza said. “You can’t replicate human trust in a machine.”
Gig workers also continue to be an issue that staffing vendors must come to terms with in the coming years. The rise in digital freelance staffing platforms like Shiftgig, Upwork and Taskrabbit are forcing staffing vendors to figure out how they can tap into these talent pools and provide a value-added services to their clients. In some ways it’s not much different from temp agencies, Souza said. “When you eliminate the agency you lose control of the process.”
For the near term, Souza believes staffing firms will focus on providing concierge-like services to help clients access higher-end contractors and project consultants, leaving the low-end gig roles to the digital platforms. The challenge they face now is proving to clients that they have the technology and the access to talent to serve as a provider in the gig economy.
“They can’t rely on outbound marketing techniques anymore,” she said. “They need to become masters of getting talent to come to them.”
Asin agreed. He sees the integration of gig workers as the natural evolution toward a “total talent solution.” Clients need vendors to help them address all of their talent needs, so they can find the best people at the best price, he said. “Whether they are full-time, part-time, outsourced or contract, staffing agencies have to deliver solutions for the total talent mix.”