Common Issues & Challenges Faced by Staffing Agencies!
IT Resource Hunter
IT Resource Hunter founded by expert recruiters and we know and understand the recruitment needs of any company.
Staffing firms face change constantly: new technology, a limited supply of talent, economic uncertainty, the push to work from home, a high turnover rate, etc. We hear all about these issues from our staffing firm clients, so here are some of the biggest challenges that staffing professionals firms, and hiring managers face year to year.
Although slowing slightly, the skills shortage is showing no signs of stopping in certain occupational groups as we enter 2024. With the effects of Brexit and the aging population, there is still very much a clear lack of technical skills across a range of industries including healthcare, construction, and engineering. Without concerted action by employers, two-thirds of the Global workforce could lack basic digital skills by 2030, while more than ten million people could be under-skilled in leadership, communication, and decision-making.
The rapid adaption to home working as a response to multiple lockdowns during the pandemic, alongside the growing focus on employee health and wellbeing, has left candidates with a much stronger expectation of flexible working opportunities than ever before. As such, people are now much more selective of the vacancies they apply for based on the flexible working arrangements on offer.
Despite the contrasting views on the productivity effects of hybrid working, the fact of the matter is that it’s now a key factor in employee attraction and retention – with 38% of candidates stating that they wouldn’t accept a role if the business doesn’t offer hybrid working.
As such, hiring managers may want to consider flexible working arrangements, especially if they are struggling to fill vacancies. But it’s not just about being flexible in terms of the place of work. Offering flexible working hours can also have an impact on application rates, not forgetting the recent spotlight on the 4-day working week.
For organizations where flexible working is not an option, you should be as upfront as possible at the start of the hiring process and clearly state within the job description that the role is fully office-based, to set the expectation from the outset.
Right now in the US when it comes to labor, the supply and demand is simple: There are fewer quality candidates available than open jobs. We see it from high-end engineering or technology recruitment firms to those filling blue-collar jobs. There just aren’t enough folks with the right skills and experience to fill all the open positions. Additionally, candidates have more control than ever when it comes to technology that connects them with potential jobs. This includes online marketplaces, human cloud work, and the tools that facilitate communication between traditional staffing firms and their database of candidates.
Figuring out which technology can help you make more placements that are going to stick is an overwhelming challenge. But it is also one you need to spend time on this year because if you don’t, you’ll soon be left behind.
Most of our clients are small to midsize firms that grew up as traditional staffing firms and are now trying to figure out how to use online sources of candidates such as Indeed or LinkedIn. It’s like everyone has a database of 2 million candidates — but now they need the ability to query and qualify the candidate pool for the right fit.
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You may have heard this term about dating apps, but it’s a problem during the interview and hiring process too. We’re talking about employee no-shows, or “ghosting” — people starting assignments and then leaving after a day or two. Why is that? They know other jobs are waiting for them. And it is very costly for the staffing firm. Not only does it hurt your relationship with your client, but you also lose the investment you made in finding, recruiting, and training the worker.
Ghosting in the current COVID-19 staffing market has become an even bigger issue. According to a study conducted by Indeed, “it’s become clear that the disappearing act is no longer quite so one-sided: more employers are now ghosting job seekers, too.”
Unfortunately, there is not a whole lot you can do about it other than try your best to do your due diligence and match your candidate’s expectations.
Alongside the skills shortage, the labor market is also very competitive. Although vacancies may have decreased from September 2023 to November 2023, they are still higher than pre-pandemic levels, with a larger amount of open roles than there are candidates to fill them.
What’s more, is that counteroffers are on the rise. 40% of employers have made a counteroffer in the past 12 months. Two-fifths (40%) of these counteroffers were for a higher salary, and 38% matched the competitor’s salary.
To overcome this problem, it’s crucial to provide a positive and effective candidate experience throughout the entire recruitment process: from the first communication right until the employee’s start date.
Artificial intelligence (AI) has been at the forefront of many business leaders’ minds recently with its various use cases. For recruitment, however, AI can bring both positive and negative outcomes depending on how, and by whom, it’s used.
On one hand, hiring managers can harness AI to automate otherwise manual tasks such as sourcing and matching candidates to job roles or writing job descriptions. On the other hand, job seekers can use AI to script CVs and cover letters and answer applicable questions. It’s now getting increasingly harder to differentiate the candidate’s work from that of technology.
Rising interest rates, historically low unemployment, a predicted slowdown in GDP, and possible trade conflicts are all factors that are contributing to an economically uncertain future with a possible recession on the horizon.
A big part of managing financial survival in a recession is doing what you would always do, but doing it better. For example, analytics are more crucial during a recession. Which recruiters, which offices, and which vertical lines are generating the most profit? You may need to tighten your belt, and you need to know when and where to tighten it.