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.
- Short-term - rebuilding what was broken
- Longer-term - adjusting to rapid advances in automation, job replacement, and e-commerce.
Pre-Covid labor shortages will persist, but with a new wrinkle
- Force migration/training between industries
- Rapid adoption of automation across services, manufacturing, transportation and logistics
- Near constant instability for low wage workers
- Greater demand volatility and shorter response time for staffing
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.
- Recruiters will work harder to find fewer new candidates
- Best practice recruiters will cultivate an ongoing community of talent
- Your talent community will become far more diverse than it is today
- Prepare for wage inflation, and prepare your clients too
- Speed will be everything
- Hourly / daily staffing opportunities
- Time sensitive windows
- People trained and ready before they are needed
- Automated mobile scheduling
Out of your comfort zone.
The best opportunities in staffing will include:
- Training and retention
- Diversity and inclusion
- Merger and acquisition
- Multi-year technology strategies
- Politics and legislation
- Preparing the next generation to lead
A critical strategy - Dominate your niche end-to-end
- By industry job role talent source, geography, and relationships
- M&A activity to achieve scale and market share
- Strategic use of technology to link talent to client employers on-demand
- Strategic planning with clients to map out skill needs over a period of years
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.