As has been said many times now, 2020 is turning out to be a wild year. Never in the last 100 years have so many people been affected on so many levels. But out of adversity comes opportunity, and now that we are five months beyond the beginning of the pandemic, new opportunities are indeed emerging for businesses across a number of industries. In the staffing and recruiting industries, change had already begun pre-COVID, and now the stakes are high as winners and losers are already being declared. Uber announced in April that they are abandoning their objective to continue the UberWorks business they started in 2019. More business will surely fail or sell to larger companies, particularly considering it is a fragmented industry with companies focused on niche sectors.
So why is there an urgency to change right now? Three primary reasons come to mind:
- Increased competitiveness caused by reduction in demand: The COVID-19 pandemic created a situation that has never been witnessed before: most businesses around the entire globe were shut down while health organizations grappled with understand how the coronavirus operates and how we can fight it. Even now most non-essential businesses continue to layoff or furlough employees. This instant shift forced even the most successful companies to move from searching everywhere for good candidates to hire to laying off massive amounts of their workforces. When companies are laying people off, they are not placing orders with recruiting or staffing companies for new workers. That means the staffing industry overnight became exponentially more competitive as the same companies are all chasing the few job orders that do exist.
- Unemployment figures: Suddenly unemployment sprung from a decades-low 3.4% to climb above 15%, marking the highest unemployment rate since the Great Depression of the 1930’s. Even now the unemployment rate is over 11%. The good news for staffing and recruiting companies is that these figures continue to decrease. The CBO forecasts that the U.S. unemployment rate will average 6.1% over the next ten years. This could result in more business for the staffing and recruiting industries, because it strikes a good balance between companies looking to hire and the base of unemployed workers including qualified candidates.
- Digital Attackers are raising the game: Even before COVID-19, the staffing and recruiting industries were becoming very competitive. At the center of the competition were digital platforms that are poised to dethrone the traditional methods of contacting a recruiter and waiting 3-14 days to find candidates for you. A number of startups are successfully taking market share from the industry leaders, and a number of the leaders have now spun off new technology companies to build their own digital platforms. With the rapid growth of artificial intelligence and machine learning, these platforms will only strengthen in their capabilities and add more value to employers that require staffing and recruiting solutions. The result improved customer experience that reduces the time to hire from days to hours, and results in more qualified candidates that are a better fit for the employer.
Based on these three reasons, it is a “call to arms” for companies in these respective industries to improve the service they provide to their customers. While relationship-based business is always an advantage for customer retention, it will not be the primary driver to retain business and it will certainly will not help find new business.
Customers are looking for same types of technological solutions that they find every day in the consumer world. These include web or mobile solutions that facilitate self-service, complete automation of tasks, instant results, and visibility to what is taking place at all times. For companies in the staffing and recruiting industries, the time to design, develop, and rollout those types of solutions is right now.