What is the future of staffing?
At a recent staffing show, I was talking to an old acquaintance and he mentioned to me that his top recruiter for that month was a robot. Really? Yes, he said, his company was testing out new AI technology, and that a computer program was in certain cases beating out human salespeople in terms of placements.
Wow. The future is really here, huh?
This is just one example of how the staffing industry and the workforce is changing and developing at a rapid rate. Across all industries we are seeing the skills gap widen, labor market dynamics shifting, and the population aging.
So, what do all these changes mean for staffing firms big and small? It’s a big question, and I’ve put together some thoughts on the subject based on what I’m seeing in the industry.
1. The gig economy doesn’t just mean Uber, and you shouldn’t ignore it.
When most people hear gig economy, they think Uber or Fiverr. However the wider definition of gig economy includes independent contractors and temp agencies along with online staff on a digital platform. And like it or not, the gig economy is rising. I recently read a report from SIA, the 2017 Contingent Workforce and Workforce Solutions Buyer Survey, and saw some stats about how those companies expect the makeup of their labor force to grow. According to the survey, temporary workers currently account for 10% of the labor force in large companies, and that is expected to increase 18% over the next ten years. Freelancers, who currently only make up 1%, are expected to grow by 35%.
We know that workers are finding less stability in traditional “9-5” work. Where in the past they might have to rely only on a traditional staffing firm, technology is now giving more options and flexibility. Modern workers – especially Millennials - want and expect flexibility.
As a staffing firm, you have two basic options: dig your head in the sand and be left behind, or adapt.
2. Staffing technology is here…almost.
As more solutions become available, I’m seeing more and more staffing firms testing out new technology. According to the SIA report I mentioned above, there’s not wide use of online staffing platforms at the moment, but 21% consider using them over the next two years. Some companies view online digital platforms as a new channel that may bring business that they would otherwise lose.
As with all technology, some will stick, and some will fail. It seems like Europe and Asia is ahead of the US in terms of adoption, but it’s gaining traction here too. Here are a few initiatives that I find intriguing:
- Adecco launching Adia digital platform in Switzerland, the UK and Germany
- Ranstad Japan partners with GigWalk to use Ranstand employees to fill online requests
- True Blue launched JobStack
- Integrity launched Integrity On Demand
- Several temp agencies in the UK are offering robots for hire, including Robo4Hire for entertainment and Pepper Robot Hire, an AI that can do jobs like receptionist, data collector, hotel concierge, etc.
- Hirebotics is a US-based company where you can request robots as factory temp workers
I recently read an interview with Linda Galipeau, the head of Randstad, North America, and when asked her thoughts on staffing technology as a disruptor she said that you could either view it as a risk or an opportunity. While technology is almost there with making online staffing a disruption, she says the positive side is that it could expand the percent of hires that are made with the assistance of a third party.
She also mentioned in the interview that she doesn’t think that end-to-end tech is necessarily the answer, but instead advocated for a “tech and touch” approach where “technology and human interaction are just positioned a little differently than they are today.”
3. Amazon affects staffing, too.
When I think about the future of staffing, I look at Amazon and see how they have changed the online retail landscape into a “sharing” economy where a network of companies, individuals and customers that interact to create mutual value on a shared platform. In the same way, talent acquisition ecosystems may be the way of the future.
You could almost say Amazon is the perfect “gig” platform, because it’s made up of sharing and collaboration. If Amazon was for people, the whole world would see the jobs, rather than be at the mercy of job boards.
While a transition like that would be good for the candidate, it’s not necessarily “good” for staffing firms – at least the ones that don’t adapt.
While the industry is changing rapidly, at the end of the day in staffing it’s still all about people. You still need good recruiters to bridge the gap between people and technology, and you still need great candidates to fill the gaps. AI and technology might be a big part of the future, but at the moment there are things that still need be sorted out like technology limitations, legal risks, and the risk of perpetuating unconscious bias.
It could be the case in the future where staffing is a fully automated process, but in the near term, getting the balance right between tech and touch will be the winning formula. It’s also important to understand how the gig economy and the sharing economy play a role in the future of staffing.
Whatever the future brings, one thing remains true: it’s the staffing firms that can adapt and innovate that will emerge victorious.