For the past 10 years, the temporary staffing industry has been growing nearly 2x faster than the economy. In fact, U.S. temp agencies will increase revenue by another 3% in 2019, making temporary staffing a $152 billion industry.
With temp agencies in such high demand, the staffing industry has grown both in sophistication and in the number of firms entering the market. Not all staffing firms, however, are steering their clients toward success. How do you find the right fit? Look for the following key drivers.
Technology adoption balanced with a human touch
More than 70% of temporary staffing firms increased their technology investment over the past year. The top investments are going toward AI and machine learning to better source and match candidates. Automation is speeding up the staffing process as well. Seven in 10 temp agencies conduct background checks within 48 hours, for instance. With temporary staffing, that timing is critical.
These AI investments include recruiting tools like LinkedIn with its advanced filters and other talent solutions that are particularly useful to recruiters who know how to use them. But then there’s also more proprietary tools for candidate sourcing, candidate rediscovery, hiring remote workers, employee referral administration, diversity hiring, and even facial expression analysis during interviews that are really taking off. Companies using AI in recruiting have seen remarkable improvements in cost per hire, time to hire, recruiter efficiency, and even unconscious bias.
Ask your staffing partner how they’re investing in technology and balancing it with traditional methods to improve your hires. Also, look at their track record in these areas. If your employment agency isn’t balancing technology adoption for improved performance with personalized service, it’s time to find a new one.
“It’s important to keep exploring resources that will make us work smarter and faster but I can’t stress enough the importance of direct one-on-one communication with a job seeker,” says Claire Reese, The HT Group Director of Staffing Services. “The information we get from meeting with our candidates in-person is invaluable and simply can’t be replaced. AI is incredible but it will never replace being human and all that offers.”
Thanks to technology advancements, sourcing qualified temporary staffing candidates is not the challenge it once was.
“What is an issue is effectively engaging candidates who have the skill sets you’re looking for in meaningful conversations about your client’s value propositions for their employees and their customers,” says Jeff Weidner, VP of Product Innovation at Monster. “You can throw a stick and find exactly who you’re looking for, but that doesn’t mean they’re interested in the opportunity, the company, or the salary. It’s more about engagement than it is about sourcing.”
With such a tight labor market these days, temp agencies that can attract top talent are invaluable. How do you know you’ve found the right one? Look at their reputation, because that’s what candidates are doing. Nearly three in four job candidates say a staffing firm’s negative reviews impact their likelihood to work for that firm, so poking around online isn’t a bad idea.
“So many resources are easily available. It’s important to do your research and use Glassdoor, LinkedIn, Google and other sites to find out who the ‘A’ players are in your area,” advises Reese.
Poor retention is another sign that an employment agency’s candidate experience is turning top talent away. Turnover rates for temporary and contract employees are normally quite high: about 387%, resulting in an average job term of 10.7 weeks. Find a temporary staffing firm with a record of beating those odds because talented and loyal temp employees do exist.
A third sign is the number of candidate referrals the firm receives: Nearly 30% of temporary staffing firms told recruitment software firm Bullhorn that candidate referrals are the absolute best source of high-quality talent.
More than 40% of U.S. workers are now employed in “alternative work arrangements,” such as contingent, part-time, or gig work. The number is steadily rising (it increased by 36 percent in just the past five years) and includes workers of all ages and skill levels.
Why, then, do 73% of staffing firms consider a talent shortage their top concern this year?
The contingency workforce isn’t what it used to be. Deloitte’s latest Global Human Capital Trends Report offers some insights:
- Retirees are reentering the workforce, people are spending time caring for children and aging parents, and individuals are going back to school. These trends create more depth and scale across the range of alternative talent pools.
- More than half of the employers Deloitte polled said they either managed alternative workers inconsistently or had few or no processes for managing them at all. These organizations are using alternative work tactically as a way to “fill slots,” not strategically as a long-term solution for the future.
- Many people are alternative workers part-time: Deloitte’s latest millennial study found that 64 percent of full-time workers want to do “side hustles” to make extra money.
An increasing number of workers today choose temporary staffing because it offers flexibility and supports their lifestyles, not because they can’t find permanent jobs. This is a shift that requires employers to change their traditional tactics when it comes to hiring contingency workers. Alternative arrangements when it comes to scheduling may be necessary, for instance.
“Employers need to get creative and be open to new ways of thinking about staffing and labor needs. Offering remote and alternative schedules can tap into a new pool of candidates and expand the workforce that one might not normally have access to,” Reese says. “We have seen this be true with so many Austin employers. Many more are offering remote and work-from-home options as well as alternative shifts to find a way to fulfill a need that might otherwise go vacant.”
The temporary staffing landscape also depends on industry and location. A manufacturing temp in San Marcos and a tech contractor in Austin need to be sourced and recruited in vastly different in ways. Look for an employment agency that understands the changing needs and motivations of your local workforce.
“When providing temp staffing for more entry-level positions especially, it’s extremely important to use a firm that has a local presence and meets with candidates in person,” Reese explains. “Local resources are more connected to the community and care about being a positive influence. It’s their backyard, too.”
Here’s a secret your competitor may already be banking on: Hiring temp workers is a great way to find full-time, permanent employees.
According to the latest ASA Staffing Employee Survey, one of the top reasons motivating workers to become staffing employees is to find a permanent job. Almost all staffing employees surveyed say gaining permanent employment is vital to them, and nearly half (49%) say this is a reason for choosing temporary or contract work. Clerical and administrative, industrial, engineering, IT, and other STEM fields, and professional–managerial workers are most likely to choose temporary or contract work to find a permanent job.
It’s important, then, to work with an employment agency that offers a complete staffing solution including temp-to-hire and even direct hire. No two job openings are the same. Your staffing partner should be able to consult on, adapt to, and scale to each specific staffing need, not the other way around. Many employers find success when they reimagine their temp and contract positions as temp-to-hire positions because it widens their candidate pool and can attract top talent that wouldn’t have considered the job otherwise.
“This is especially important in markets like Austin and other Texas metros with low unemployment rates and rapid growth and expansion,” Reese adds. “Even when the pendulum is more balanced, being flexible and open to a direct hire or contract solution (depending on the situation) may be what you need to find the best candidate for the job.”
Want more information on changing temporary staffing trends? Contact us.