A booming economy and historically low unemployment rates are all good news for economists. But these factors have an immediate and profound impact on talent acquisition, management, and development. Low unemployment indicates a level of saturation that keeps new talent from entering the workforce. As a result, bringing new candidates to the talent pool becomes more difficult, more expensive, and a bigger challenge. Good candidates are now in demand which has driven up expected salaries. Besides, KPIs have become benchmarks against which staffing companies are now measured. Clients, virtual managers, and hiring managers are looking at data from newer perspectives. Terms such as fill rates, CV to vacancy, CV to interview rate, compliance audits, and supplier rate cards are commonplace in the staffing parlance. The industry is fast approaching a tipping point where traditional staffing methods will no longer be effective. There’s a pertinent need to start thinking out of the box on how to stay relevant and continue growing.
How will the staffing industry shape up in the coming years? Will it be different from what it is today? What will be the trends? What are the challenges and hurdles the industry is going to face? These are some of the common questions that dog today’s recruiters and staffing companies.
Industry experts believe that while the staffing industry will continue to grow in 2019-20 notwithstanding the tipping point, there would be a rise in demand for a flexible workforce comprising temporary employees, independent contractors, part-time workers, and freelancers.
Today, approximately 10 per cent of an organization’s workforce is contingent. According to conservative estimates, the US staffing industry will have 3.4 million employees by 2020, generating $185 billion worth of temp revenue. By 2020, 15-25% of the workforce is likely to be contingent as more companies realize the benefits of contingent staffing. Staffing in the US would grow and catch up with Europe where the industry is much larger now. The contingent level will start to mirror that in the Europe and Asia, experts believe, as more companies turn to contract labor to fuel their human resource (HR) supply line.
Five major factors have contributed to the growth of contingent staffing post the recession era:
(a) Organizations have acknowledged the benefits of leveraging the human cloud to reduce costs and increase efficiency
(b) Technology is continuing to reduce the number of full-time onsite roles
(c) Social networking has enabled teams across boundaries to work more collaboratively and expeditiously
(d) Outsourcing is still alive and kicking
(e) The cost of real estate
Most experts acknowledge the changing work pattern across industries. Companies want more control over its workforce, which has opened up a big opportunity for staffing firms to work as true workforce partners, enabling organizations to hire creative, on-demand talent.