5 Staffing Trends in 2018

In any business, it’s easy to get bogged down in the day to day and lose sight of the macro trends affecting the industry. Staffing in particular is a fast-paced business, but sometimes it’s good to take a step back and observe what’s happening in the industry. Last year we saw strong hiring and low unemployment, and in general staffing firms are optimistic about revenue and billable hours increasing in 2018. The economy is humming along, but concerns about possible trade wars and the next recession cause some apprehension – which is actually good for temporary staffing, as staffing is often a tool that organizations can use to manage uncertainty. In this blog, we will discuss the top staffing trends of 2018 and what they mean for your growing staffing firm.

1) Technology Developments

In a surprise to no one, staffing technology is one of the top trends of 2018 just as it has been for many years. According to a Bullhorn study, tech spending has increased to 52% compared to 40% last year. Staffing businesses are making significant investments in AI technologies to attract and hire skilled workers. We are seeing new staffing technology crop up all the time in areas like candidate screening and sourcing, candidate rediscovery from existing databases, bias removal, and AI chatbots, just to name a few areas of development. Some staffing firms are also offering artificial intelligence and robotic work solutions to their clients, in addition to traditional staffing.

As technology changes, so does the skill profile of jobs, and staffing firms are challenged to keep finding and placing qualified candidates for shifting roles in an increasingly tight labor market. Getting the balance right between automation and the “human touch” of staffing is another challenge for staffing firms now and in the future. Whoever can figure it out best, wins.

2) Employee Experience

In this tight of a labor market, it is no longer enough to focus exclusively on making your end clients happy. You also have to keep your candidates coming back. Candidate experience is more important than ever, because competition is fierce and staffing firms have more incentive than ever to make candidates happy. Not just for their sake either, although they are important – but also for future positions via positive referrals. Candidate referrals are often the #1 source of high quality candidates. Word of mouth marketing is the most powerful there is, and you get it by delivering a good experience.

So, how do you provide a good experience? For starters, you can make your application process as clear and as quick as possible. One of the things job seekers find most frustrating is when information about job descriptions is scarce or the status of their application is unclear. This requires stronger alignment between sourcers, recruiters, and hiring managers to provide a more streamlined and personalized candidate experience. NetPromoter scores are also a tool you can use to assess how you are doing with your candidates and employees, as well as clients and internal staff.

3) Skills Gap and the Changing Nature of Jobs

Ask any staffing professional, and almost invariably their #1 challenge is finding quality candidates with the necessary skills. In other word, the skills gap. With unemployment as low as it is, it is hard enough to find candidates to fill the high demand, especially in STEM fields like IT and engineering. Staffing companies are finding themselves with more open requisitions than ever before as clients increase hiring budgets. It is a good challenge to have – better than the other way around, certainly – but a challenge none the less.

One reason that finding qualified candidates is especially tough is that technology means jobs are changing rapidly, but the required skills are lacking. Plus, jobs that once did not require technical knowledge, like accounting and finance, have also shifted to become more technology-focused. While a challenge, it also presents an opportunity to employers willing to invest in training workers with high potential and the ambition to grow.

4) Rise of Soft Skills

Robots and AI are really, really good at routine tasks based on a set of rules – for instance, searching a database for candidate matching. But until technology is sophisticated enough to replace humans altogether, people are still much better at open ended tasks that require flexibility, creativity, and judgement. In fact, new technologies only increase the importance of skills and tasks for which there is no good substitute. As workers are freed up from rote tasks, those with both strong technical and soft skills are in the highest demand.

After all, you can train someone for technical skills, but it’s harder to train for emotional intelligence. Those with good soft skills stand out more, and many employers are prioritizing soft skills and cultural fit in the hiring process with the intention of training for hard skills once employees are onboarded. New research finds that from 2000 to 2012, jobs that require “non-cognitive” skills, such as the ability to communicate and work in teams, grew much faster than jobs mainly requiring skills measurable by IQ or achievement tests.

5) Legislative Changes, Both National and Local

The staffing industry is keeping a close watch on politics in 2018. Issues like immigration, healthcare, and taxes mean that many staffing firms face uncertainty. While Congress has not yet passed sweeping healthcare legislation to overturn the Affordable Care Act, healthcare reform it is still a priority for Republicans who currently hold power. It matters to staffing because a lot of healthcare staffing is driven by the Affordable Care Act, and if it goes away, so might the volume for healthcare staffing.

Many staffing firms will see a short term boost from the Tax Cuts and Jobs Act, which went into effect this year and contains many tax cuts for businesses both large and small. Proposed immigration reform such as changes to the H1-B program could also have an effect on IT staffing, as many firms get workers through that specific skilled worker program.

Staffing firms should also keep an eye on state and local elections, as many labor unions are bringing regulatory advocacy to select cities and states instead of at the national level. The current White House is actively seeking less regulation, so labor advocates have to change their strategy, and that means going local.

Next Steps

We hope this blog was helpful in summarizing some of the key trends of this year. If you have additional questions or want to talk about how to grow your staffing firm in the 2018 landscape, contact us by filling out the form below or ask me anything at AskBarb@advancepartners.com

barb

About the Author
Barb Hammerberg, CCWP has held almost every job that exists in staffing firms, from recruiter to regional director at some of the largest staffing firms in the world. She brings decades of experience and industry knowledge to her role as the Director of Client Development at Advance Partners.