Regardless of your firm’s industry type, size, hiring needs, and budget, chances are your staffing challenges are not very different from others. Why? Because talent markets across the world are more candidate-driven today than ever before thanks to shrinking talent pools. Friction over trade and tariffs is likely to continue and competition for good candidates is intensifying by the day. The global staffing industry revenue is expected to grow by 4% in 2019, with that in India and China projected to grow more than 5%, thanks to robust economic growth. Even as the industry prepares for a busy year and beyond, here are some big challenges it needs to successfully navigate:
1. blended workforce
The average employee’s work style and preferences have evolved significantly in the last decade. Today’s workforce comprises permanent/contingent staff, remote workers, interns, freelancers, flexi-workers, consultants, and others functioning side by side. With the millennial generation wanting to live many lives at once, this trend will only continue to rise. Deloitte’s 2018 Global Human Capital Trends report revealed that only 42% of respondents said their organizations are primarily made up of salaried employees, with the rest reliant on gig workers. For recruiters, appealing to, engaging with, and driving value from this diverse workforce ecosystem is often a challenge as traditional HR policies (compensation, benefits, leave, etc.) are not designed for flexibility. Organizations need to rethink staffing to suit the blended workforce, especially in terms of how they measure performance, ensure engagement, impact of the new breed of workers on the company culture, etc.
2. fiercely competitive hiring landscape
Besides adapting to ever-evolving candidate demands, recruiters today face competition from newer sources such as start-ups who are nimbler in their ways of working. Not only do they offer unique perks (autonomy, stock options, paid time off, etc.), they are also open to alternate hiring and staffing arrangements such as temp and flexible working environments, and they provide better salaries irrespective of the staffing arrangement as they are not limited to rigid compensation structures that are typical of larger organizations. According to Deloitte’s 2017 Global Human Capital Trends Report, talent acquisition is also the third most important challenge organizations face, after ‘careers and learning’ and ‘building the organization of the future’ – both of which pertain specifically to talent acquisition and management. As the pressure to find talent increases, the flexible staffing industry is booming. In India, the IT flexible staffing industry is worth over USD 3 billion and this market is only likely to grow.
3. dearth of quality talent
According to McKinsey, 76% of hiring managers say ‘attracting top talent’ is their greatest challenge. This comes as no surprise, given the widespread dearth of talented candidates as skills-gap across industries continues to rise. But that’s not the only reason. Often, organizations are not very clear about what they are actually looking for and worse, they assume that the candidates actively seeking a change via job boards are the only ones out there. In reality, 80% of the job board talent pool does not represent top talent because star performers do not use these avenues. Their work, recommendations, and networking usually do the trick for them in landing the perfect next role, especially in the contract staffing and freelancing segments. Another key reason firms often fail to attract top talent is that they start looking for candidates only when they have a vacant position. The failure to ditch this reactive recruitment mindset and adopt a proactive talent strategy means firms lose out on time required to attract top-of-the-line candidates through meaningful relationships, networking, employer brand building, etc.
4. expectation gap between recruiters and hiring managers:
This is one of the biggest factors that leads to long lead times in filling open positions in most modern organizations.51% recruiters say hiring managers should do a better job of communicating what they are looking for in a candidate and provide relatable examples, while on the other hand, 77% of hiring managers feel recruiters’ screening of candidates is inadequate. That’s not all. While recruiters feel hiring managers expect them to fill open positions at an unrealistic pace, the latter feel recruiters should proactively work to build a talent pipeline that can fill open positions when required, without having to start from scratch each time. Detailed, long-term planning on the desired skill sets and headcount acquisitions with involvement from all stakeholders – line managers and function heads alike, will go a long way in reducing this friction.
5. rapidly evolving HR technology:
While most modern HR executives are comfortable using the new technology tools available, they fail to go the distance from data to insights that can be leveraged for action. Only 7% of HR professionals are able to use people analytics tools to optimize their people policies. Similarly, KPMG’s latest report reveals that 39% of forward-looking HR leaders are harnessing technologies such as analytics, digital labor and AI to redefine obsolete talent models. The rest need training to maximize usage of these technologies. Automated staffing – an emerging trend focuses on leveraging intelligent automation driven by AI and RPA to automate resume screening, initial interviews, candidate onboarding, exit interviews, etc.
the future of staffing will be high-tech and inclusive
As staffing managers race to match the speed of hiring with that of the business, technologies such as AI, conversational bots, video/voice and texting systems, and others will play a key role in accelerating resume screening, verification, interviews, psychographic profiling etc. Traditional staffing models are therefore giving way to digitally-fuelled Talent Acquisition Ecosystems that work as open marketplaces for attracting, engaging, and hiring the right talent. Organizations that will successfully continue to lead the hiring ecosystem will be the ones that find the right balance between addressing their own resource needs and the potential employee’s work-life objectives and growth plans.