Well hello there recruiter. Has your new year got off to a good start? We’re getting reports of too many job requirements and not enough candidates. Business isn’t looking too bad for the staffing industry this year.
Our friends at Bullhorn found that 75 percent of staffing and recruiting firms anticipated an increase in 2018 revenue versus 2017 revenue, according to its 2018 North American Staffing & Recruiting Trends Report. Overall, the report showed that staffing and recruiting professionals remained optimistic for a successful 2018, as they did for 2017, despite increasing concerns and emerging challenges related to automation, digital staffing platforms, macroeconomics, and politics.
Staffing firms identified their top three priorities for 2018 as:
- Increasing profitability (45%)
- Driving top-line revenue growth (43%)
- Improving candidate sourcing (42%).
Their next five priorities represented operational strategies. These included:
- Improving the management of client relationships (27%)
- Expanding into new markets (26%)
- Automating and accelerating recruiting and placement processes (23%)
- Engaging candidates and improving the candidate experience (23%)
- Increasing employment brand development and marketing (21%)
The survey also found that firms anticipated revenue growth with limited margin expansion for 2018. A majority of staffing firms expected increases in hiring needs (70 percent), billable hours (62 percent), and temporary placements (59 percent) in 2018. On the other hand, a majority of firms (about 55 percent) predicted that both bill rates and margins would stay flat or decrease in 2018, and about half of respondents (49 percent) ranked pricing pressures and margin compressions as a top three challenge. Key findings include:
1. The impact of automation on recruiting
North American staffing firms identified automation as both a top priority and a top challenge—23 percent of firms ranked automation as a top priority and 36 percent marked it as a top challenge, signaling more opportunities for improved adoption and utilization. Additionally, 40 percent of respondents attributed automation’s greatest value to increased efficiencies and the same percentage to increased engagement. When asked if automation would create more jobs or eliminate them in the staffing industry, respondents were split down the middle—38 percent on each side and another 24 percent undecided.
2. The rise of digital staffing platforms
Sixty-three percent of respondents said they were unsure about how digital staffing platforms such as Upwork, Shiftgig, Catalant, and others would impact their business. However, 21 percent of respondents said those platforms could help their business, compared to 16 percent who thought they could hurt their operations. Sales teams were more enthusiastic as 29 percent of respondents expressed positive opinions about digital staffing platforms, seeing them as a potential source of low-cost talent.
3. Industry confidence levels slip
Examining broader macroeconomic and political factors, 68 percent of respondents said they were very or somewhat concerned about the rate of economic growth, and large portions worried about healthcare policies and regulations (66 percent), inflation (59 percent), restrictive labor policies (57 percent), and the current administration (57 percent). Overall confidence levels for industry performance have slipped, with one-third of respondents (33 percent) feeling more confident about the future heading into 2018, compared to 38 percent last year.
3. More tech for recruitment firms
Staffing firms said they were planning to considerably boost their technology investments, with 52 percent of firms anticipating an increase, compared to 40 percent last year. About half of firms (49 percent) also said their operating budgets would increase in 2018, an increase over last year’s 43 percent. However, firms weren’t planning to focus as much on market expansion. With 26 percent of firms ranking new market growth as a top priority—and far fewer interested in acquisitions—only 28 percent expected to increase their number of offices.
4. Millennials want you to text, not call
Staffing firms listed SMS (text) messaging as the fastest-growing communication channel in 2018, with 69 percent of firms expecting their usage to increase—especially communicating with Millennial and Generation Z candidates.
5. Referrals are your best talent source
Referrals from existing candidates jumped to the top of the list of single best talent sources this year—nearly 30 percent of respondents said referrals were the absolute best source of high-quality talent. Twenty-six percent of staffing firms said they placed less than 10 percent of candidates on their next assignment, and half of respondents said they redeployed less than 25 percent of candidates, indicating missed opportunities and missed revenue.