If you are a successful staffing firm owner, the question on your mind should always be: what’s next? In this exceedingly competitive industry, if you aren’t growing, then someone else will be there to pick up your slack. The temporary staffing industry as a whole is growing and doing well, and confidence is high. According to a recent report by Bullhorn, 97 percent of staffing firm respondents said they anticipated some revenue growth, and some expect growth of more than 25 percent. A couple months in to the year, we want to take a moment to explore five trends that have a big impact on the industry, and could have a big impact on your growth if you play your cards right. [more]
1. Talent Shortages
A big concern of most staffing firms in 2017 (and beyond) is the shortage of qualified candidates in the labor market, particularly in hot fields like technology. 61% of firms surveyed in the Bullhorn study cited talent shortage in their top 3 concerns. We also recently conducted our own survey on our Advance Partners Advisory Board, comprised of leading temporary staffing firms, and found that 73% cited their top pain point as finding qualified candidates. The labor drought facing the staffing industry is tough on firms, but also means big opportunities for savvy firms who can find the diamonds in the rough.
2. Changes in the political landscape
The Trump administration has made several moves in the first 100 days that have far reaching consequences for staffing firms. First, there has been a tightening of immigration, particularly the H-1B program for technology workers. In staffing, IT is one of the fast growing segments, and changes to work visas affect the industry. Healthcare is also of interest to the staffing industry, with 35% of respondents in the Bullhorn study worried about healthcare policies and regulations. Political uncertainty means one thing – change is coming. If your firm is agile and adaptable, you have a great chance of coming out on top when the dust settles.
3. The customer expects more
Succeeding in the saturated temporary staffing market is becomingly increasingly difficult because expectations from your customers are higher than you might expect. According to a Bullhorn study on client expectations, there is a noticeable gap in service perception between firms and clients: Staffing firms on average rate their service at a 9 out of 10, and customers rank service at a 6. Ouch! Now more than ever, it may be time to take a hard look at your service offerings, and ask your clients how it stacks up to their expectations. Is it time to change your systems? Do you need to become a subject matter expert? These are questions you should ask yourself in 2017 and beyond.
4. Specialization is key
The days of “one size fits all” are behind us. Your customers want the best people possible to fill roles, and may look to super specialized firms, particularly in growing sectors like healthcare and IT. It’s time to be laser-focused on what the market wants, rather than what you want. Narrow your focus, hire specialists, and give customers what they want. 44% of the Advance Advisory Group indicated that they are focused on growing their current industry vertical. They indicated that if they were to expand, 31% would explore IT or healthcare, followed by 14% in the engineering or professional sectors.
5. Technology advances
The buzzword of 2017 in staffing technology is artificial intelligence (AI). It’s not new to 2017, but it has gained more prominence than ever as technology advances. Some staffing firms are already implementing AI and machine learning to automate processes that would normally be done by humans, such as placing candidates and manning the phones. With the advent of AI, the workforce landscape is poised to change dramatically. The question is, will you embrace new technology as it happens, or watch it leave you behind? It bears considering how you can best use technology to your advantage and keep up with industry.
Advance Partners can help you keep up with industry trends and grow by providing expert strategic guidance and reporting based on almost 20 years of experience in the staffing industry. Our payroll funding solutions also afford you the liberty of being agile and quick to respond to the market, knowing that you will always have the cash flow to support your business. In our own recent survey, 25% of those we contacted were experiencing cash flow problems and indicated that they needed help to grow. If that sounds like your situation as well, contact us today for a free consultation.