Key Staffing Company Trends To Look Out For

October 7, 2015

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Original Post: 10-7-15

Post Update: 4-30-16
Post Update: 7-20-16

10-7-15

The temporary staffing industry is currently at one of the most dynamic periods in its history. Over the last few years, the staffing industry has been expanding rapidly. According to the Bureau of Labor Statistics (BLS), temporary recruitment hit an all-time high of 2.9 million jobs in mid-2014. And it is still rising.

The Staffing Industry Analysts forecast a 6% growth in 2015, followed by another 5% growth in 2016. Given that, according to American Staffing Association (ASA) statistics, 3 million temps work for US companies each week, the prospects seem bright for staffing companies.

Even then, the temporary staffing industry isn’t without its challenges. A combination of legal changes, higher standards by host companies, and a shortage of top talent means that staying competitive isn’t a breeze.

For a staffing company to thrive in these rapidly changing times, it needs to stay in tune with market trends. Tracking industry trends will enable a company to maximize the opportunities, and successfully navigate challenges coming ahead. As we move into the 4th quarter of 2015, and on to 2016, the following are the key staffing company trends to look out for.

1. Mobile Recruitment On The Rise

As mobile devices like tablets and smartphones become more commonplace, many job seekers are using them to search for opportunities. According to CareerBuilder 2015 statistics, 71% of staffing company candidates have searched for jobs on a mobile site.

Statistics by Kelton Research reveal that 65% of candidates track job applications using a mobile device. Anecdotal evidence shows that more and more recruits now prefer to submit applications from their mobile devices.

As mobile devices become more ubiquitous (and also more powerful), this trend will definitely continue. For staffing companies, it means one thing – expanding recruitment to mobile devices.

At a minimum, staffing companies will have to ensure that their website is accessible via mobile devices. This will enable them to capture talented individuals who seek out for opportunities using their mobile devices. More forward-looking ones will develop apps which can make it easier for candidates to seamlessly submit applications from their mobile devices.

2. ATS Integration – A Competitive Advantage

Applicant Tracking Software (ATS) is increasingly becoming an essential part of the recruiting process. One of the key trends predicted for 2015 is employers preferring staffing companies which employ ATS in their hiring process. As ATS becomes more popular, this demand will certainly continue.

However, as more employers discover the benefits of ATS Integration (i.e. integrating their system with that of the staffing company), many will certainly demand for it. ATS integration streamlines the screening process, reduces turnaround time, increases operational efficiency, minimizes manual errors, reduces the likelihood of bad hires, and reduces the overall cost of operations.

The number of staffing companies which offer ATS Integration is relatively small. As more employers demand for it, the number will certainly rise. In a few years, it will no doubt become commonplace. For the next one or two years, any staffing company which offers ATS Integration is likely to enjoy a competitive advantage.

3. Workplace Safety – A Legal Obligation

On July 15th, 2014, the Occupational Safety and Health Administration (OSHA) released a memo which forever changed the legal landscape for staffing companies. The agency stated that it would consider staffing companies as “joint employers” with the host companies which hire their temps. As such, they will share responsibility for the health and safety of their workers.

Since that time, the OSHA has been cracking the whip on staffing companies whose temps it deemed were working under unhealthy or unsafe conditions. It has offered citations against at least 10 staffing companies, slapping them with fines ranging from $6,000 to $64,350.

The growing specter of OSHA means that staffing companies will have to become more involved in workplace health and safety. At a minimum, they will have to participate in health and safety education among their temps. Otherwise, the biggest risk of an OSHA citation is unlikely to be the fine, it will be the negative reputation it gives a staffing company.

4. Employer Branding – A Potential Recruitment Edge?

A staffing company’s reputation is likely to become their greatest asset, or greatest liability when it comes to recruitment. Glassdoor statistics indicate that up to 69% of US workers would not take a job from a company with a bad reputation, even if they were jobless.

They also state that 90% of employees read reviews from both current and former employees before taking accepting an offer of employment. This means that a company with a bad reputation can easily lose potential hires.

Glassdoor statistics also indicate that 94% of people are more likely to apply for a job if an employer actively manages their brand. “Actively manages” in this context includes responding to reviews, updating their social media profiles, and sharing updates about their company culture and work environment.

Such statistics have turned “employer branding” into a buzzword over the past year. As the temporary staffing industry becomes more competitive, it is something which staffing companies will have to turn to. Early adopters will likely enjoy a recruitment edge over those slow to adapt.

5. Big Data & Analytics – A New Buzzword

Predictions about Big Data are becoming almost cliché. Each year is touted as the year when Big Data will finally “arrive”. 2015 was touted as the year when Big Data would go mainstream. So far, it hasn’t happened.

Even then, serious strides have been made especially in its usage in human resource. Sophisticated analytics is also providing a faster way to make sense out of tons of data. According to International Data Corporation Forecast for 2015, companies which use analytics will make decisions 5 times faster than those which don’t.

Such claims are only going to increase in the future. They will also make companies more open to big data. Already, according to IDG Research Services, 85% of people already believe that big data can enable them to make better business decisions.

As staffing companies seek an edge in an increasingly competitive industry, more and more will turn to big data and analytics. This will put pressure on those not using it to join the bandwagon. The fact that HR analytics software is becoming more powerful (and cheaper) will only increase this trend.

In a nutshell, as we move into the last quarter of 2015 and beyond, those are the 5 key staffing company trends to look out for. Paying attention to these trends, and making decisions basing them will position a company to maximize the opportunities, and minimize the risks coming ahead.

4-30-16

Q2 of 2016 And Beyond – The 3 Key Staffing Trends To Look Out For

The Second Quarter of 2016 is likely to present both opportunities and challenges for the staffing industry. Any staffing agency which intends to remain competitive needs to position itself to exploit the opportunities and overcome the challenges.

The CareerBuilder U.S Job Forecast for Q2 of 2016 contains a number of facts which are critical for understanding the jobs market. The facts which are most relevant for the staffing industry include the following:

37 percent of US employers intend to hire temporary staff during Q2 of 2016
33 percent of employers intend to transition contract or temporary employees into permanent staff during Q2 of 2016
69 percent of employers intend to increase compensation during Q2 of 2016.

These figures are from a CareerBuilder survey of more than 2,000 hiring managers and other HR professionals from a cross-section of US industries. They present the latest insights into the state of the jobs market during the second quarter of 2016.

For any staffing agency to remain competitive during Q2, they need to keep in tune with the prevailing trends. The three main staffing trends for Q2 of 2016 include the following:

1. Compensation As A Competitive Tool

The fact that 69% of employers intend to increase compensation has serious implications for staffing agencies. It means that many staffing agencies may be forced to increase their compensation plans as well.

Such an increase will be necessary to maintain competitiveness for top talent. For instance, imagine a temp is embedded in an IT department, working alongside permanent employees. If the compensation of the permanent employees is increased, the staffing agency may have to consider increasing compensation for the temp.

Otherwise, the temp may become discouraged and unmotivated. They may not only be unwilling to work for the staffing agency in future, they can also review it negatively. Given that branding is now a key competitive strategy for staffing agencies, temps sharing negative experiences can hurt an agency’s ability to attract top talent.

Therefore, during Q2 of 2016, staffing agencies need to be prepared to increase compensation. This will make them fully prepared to handle situations in which their temps are working with any of the 69% of employers who plan compensation increases.

2. Rehiring

In Q2 of 2016, staffing agencies may find themselves running short of talented individuals. This is due to a combination of two factors: the 37 percent of employers who intend to hire temps and the 33 percent who intend to transition temps into permanent staff.

To cope with the shortage of talent, staffing agencies will need a quick way to attract them. One underutilized strategy which staffing agencies will be forced to consider out of necessity is rehiring.

Rehiring is basically offering a temp who has completed one contract another assignment. According to the 2015 CareerBuilder “Opportunities in Staffing” survey, only 25% of staffing agencies rehire temps. This means that three-quarters of temps are hired only once.

In the Q2 of 2016, more staffing agencies will likely be forced to adopt rehiring. This is because a large number of employers will be looking for temps. In order to meet the rising demand, staffing agencies have to rehire the temps whom they had previously contracted.

3. Workplace Safety Focusing on the Zika Virus

According to the OSHA, the Zika virus is likely to be the greatest threat to workplace health during the next few months. As such, OSH has teamed up with the CDC to issue guidelines for Zika virus protection.

Any staffing agencies which deploys people to work in Zika at-risk areas will have to focus on Zika safety. This is because the “joint employer” guidelines issued by the DOL makes both staffing agencies and their clients jointly responsible for the health and safety of temporary workers.

The starting point for any staffing agency committed to protecting its workers from Zika is to read the OSHA/CDC Zika Guidance which was released on April 22, 2016. A copy of the guidance can be found here.

In a nutshell, those are the key staffing trends for Q2 of 2016. Understanding these trends is critical for any staffing agency which is committed to remaining relevant and competitive. Therefore, any staffing agency which desires to thrive, expand or remain competitive during this quarter needs to stay abreast with the trends. Those who ignore the trends do so at their own peril.

7-20-16

The staffing industry is renowned for its dynamism. The industry is in a constant state of flux. So, as we enter into the Q3 of 2016, what trends should the staffing industry watch out for? Well, the commencement of Q3 has coincided with the release of two critical reports. These are the 2016 Emerging Workforce Study (EWS) and the CareerBuilder Midyear 2016 US Job Forecast.

These two reports are mandatory reading for anyone who wants to keep tabs on the state of the US workforce. Gleaning from the two reports, as well as the general forces operating in the staffing industry, these are the staffing industry trends for Q3 of 2016.

A Wage War Is Brewing Among Employers

In Q2, compensation emerged as a competitive tool. Employers started using ever higher compensation packages in order to outdo each other in the quest for top talent. In Q3, this competition will likely turn into all-out war.

The 2016 EWS predicts a looming “wage war” among employers. In this war, the ammunition is ever costly wage packages. According to the EWS, this war arises from a combination of two factors. First of all, top talent is relatively scarce on the market.

Secondly, both current and prospective employees believe that they are entitled to a pay raise. In fact, 51% of employees believe that the state of the economy offers them leverage to demand higher wages. Also, 63% believe that once an employer increases wages for one employee category, it should do the same.

Already, according to the EWS 74% of employers claim that they have offered wages in order to remain competitive. Even then, the CareerBuilder Forecast says that 70% of employers intend to increase wages over Q3.

The implication of the wage war is that staffing agencies will have to bump up their paychecks in order to remain competitive for top talent. Those who don’t could find themselves lagging behind in the race to recruit the best individuals.

The On-Demand Economy Invades Staffing

Over the last few years, the on-demand economy has been slowly gaining prominence. More and more workers have been getting side-gigs, freelancing or contingent work. It is estimated that almost 34% of American workers are now engaged in the on-demand economy.

For long, the staffing industry has observed the on-demand economy as parallel, and there for a non-threat. As such, many staffing agencies have been happy to focus on their core business of providing temporary workers, and letting the freelancers operate on their own.

That was before the start-up HourlyNerd started offering “on-demand staffing”. Backed by industry giants Pfizer and GE, HourlyNerd is fusing the on-demand economy with the staffing industry. As a result, it is beginning to eat up some of the short-term opportunities normally snapped up by the staffing industry.

In Q3, HourlyNerd seems set to expand its operations. On July 7th, 2016 the startup won a Series C funding of $22 million from financiers including Pfizer and GE. HourlyNerd is also pushing aggressively especially among Fortune 500 companies. It currently boasts a clientele consisting of almost 10% of Fortune 500 companies.

The rise of on-demand staffing means that staffing agencies may have to rethink their strategies. The flexibility of the idea is what makes it attractive to both companies and employees. Therefore, staffing agencies may have to introduce new packages to avoid losing their shorter-term contracts to the likes of HourlyNerd.

Pokémon GO Invades The Workplace

Every few months so, some totally unexpected social phenomenon impacts the workplace in ways even the most ardent expert could never have predicted. In Q3, this phenomenon takes the form of Pokémon GO – an augmented reality mobile game recently released by Nintendo.

Normally, a video game is the last thing staffing industry experts would have to worry about. However, Pokémon GO is now more than a video game. It has become a social phenomenon. And it is invading the workplace.

A poll carried out by Forbes magazine from July 15th to July 19th, 2016 found that 69% of workers play Pokémon GO at work. Over 33% of the 66,159 workers polled reported playing the game for over an hour at work. Only 4.5% reported that their boss told them to stop playing the game. 3% said that they actually bonded with their boss during the game.

The Pokémon GO phenomenon is something staffing agencies will have to address over Q3 of 2016. If one-third of employees are spending over an hour playing the game, then their productivity levels will certainly be affected. This will not bode well for the staffing agencies which hired them.

Granted, Pokémon GO will not last forever. And in fact, it isn’t entirely negative. The game offers a great way for teams to bond, connect and cultivate camaraderie. Also, it offers health benefits since people have to move around to play it. Therefore, staffing agencies will have to figure out how to harness Pokémon GO’s benefits, while minimizing its potential detrimental impact on productivity.

Conclusion

In summary, over Q3 of 2016, there are three trends which the staffing industry will have to contend with. These are: the emerging wage war as employers offer higher compensations to attract top talent; the rise of on-demand staffing, and the video game Pokémon GO which is threatening to take over the US workplace.