The Next Decade is Likely to Change the Entire Face of the Staffing Industry

Christopher Ryan, Chief Strategy & Marketing Officer with Avionte recently presented a webinar regarding how he sees the future of the staffing industry playing out in light of the pandemic. A summary of his webinar is provided below.

 

Although there appears to be light at the end of the COVID tunnel, if you are assuming that things will be returning to normal, you will be sadly disappointed. Mr. Ryan believes that there will be significant and permanent changes to the staffing industry in the years ahead. In fact, these changes are already happening.

 

In early 2020, face-to-face non-essential work halted overnight with 28 million layoffs in 2 months. As a result of the pandemic, 60% of U.S. workers became remote, along with a surge in gig workers. At the same time, there were massive supply-change shifts that are still reverberating through the U.S. economy. Just look at the cost of lumber, and the associated shortages as a prime example.

 

One of the most influential effects of the pandemic, which continues today, is that 8.7 million people left the workforce in early 2020, and have, to date, decided not to come back. The civilian workforce participation rate has been decreasing over the last decade, and the pandemic has accelerated this trend. Another factor is the gradual aging of the U.S. workforce. Additionally, as a result of the pandemic, many within the boomer generation, seeing their potential mortality upclose, have decided to forgo their remaining working days in order to enjoy the time they have remaining.

 

Other trends from 2019 are not only hanging around, but becoming more acute as we come out of the pandemic, as seen in the following chart.

All of this is creating pressure in the economy that doesn't allow for an easy fix. There is now a pent-up demand for anything with a motor, as well as the need for redesign of commercial space, school infrastructure, travel and entertainment, as well as retirement and long term care. The supply chain disruptions caused by the pandemic include a short supply of semi-conductor chips for cars, timber for construction, office furniture, fuel for transportation, rare earth metals, and even ketchup.

 

There are early indicators of wage inflation as well. For January-March 2021, U.S. workers' total compensation rose 0.9%, the largest quarterly gain in 13 years. Wage pressure will continue with anecdotal information across broad swaths of the U.S. economy suggesting that businesses continue to struggle to find employees for housing and construction, manufacturing, and restaurants.

 

A "McKinsey Future of Work Study: Fundamental Changes to the Workplace" emphases that impacts to staffing will include difficulty in filling positions requiring physical proximity and human interactions. At the same time, jobs will be lost due to automation, including AI and robotics. Of course, the upstream needs to fill these high tech position will be a problem for staffing agencies, as well as finding suitable candidates to place in digitization jobs such as e-commerce.

 

So what's in store for the staffing industry?

 

The best growth opportunities will be a moving target for the next 10 years.

Pre-Covid labor shortages will persist, but with a new wrinkle

 

Essentially, staffing agencies, over the next ten years, will be looking to fill many jobs that they know will become obsolete in that time-frame. This will require the agencies to identify candidates who have the flexibility to transition from one job to a very different one. This means finding a way to accurately identify recruit flexibility and find a way to keep them in their stables until they can be deployed. Of course, this will necessitate in-house or contract training for the flexible employees, which not only increases their value, but makes them more susceptible to being lured away just as they are ready to transition for you. Again, maintaining a stable of high-value employees ready to meet rapid demand will be one of the biggest challenges facing the staffing industry.

 

Other changes the staffing industry needs to embrace.

 

 

Out of your comfort zone.

 

The best opportunities in staffing will include:

 

A critical strategy - Dominate your niche end-to-end

 

 

If it all sounds a bit daunting, that's because it will be. You'll need a staffing agency partner that understands the challenges ahead and is planning on your behalf to be ready to meet them head-on. That's what you'll get from our professionals at ASN. If you would like to know more about how we will be there to help you succeed in the difficult and challenging time ahead, we would love to talk with you. Give us a call.