North American Staffing Sector Optimistic on 2018 Revenue, Concerned by Skills Shortages

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North American staffing and recruiting professionals are overall optimistic on revenue, according to Bullhorn’s 2018 North American Staffing & Recruiting Trends Report, although challenges such as skills shortages remain salient.

In a survey of 1,442 staffing and recruiting professionals, three-quarters anticipated an increase in 2018 revenue as compared to 2017 revenue. Twenty percent of the respondents predicted revenue to increase by more than 25%. Small firms were more optimistic than their larger counterparts.

Source: Bullhorn

The report noted that while 70% of the staffing firms expected increased hiring needs this year, with 62% expecting an increase in billable hours and 59% expecting an increase in temporary placements, challenges still abound.

For 64% of respondents, skills shortages ranked as one of their top three challenges. Other common challenges included pricing pressure (49%), technology and automation (36%), economic uncertainty (35%), and the expansion of VMS business models (24%).

Larger firms are more likely to cite skills shortages as their biggest challenge, as are firms serving the manufacturing, IT and accounting and finance industries. When pressed for specific in-demand skills, respondents named IT skills and engineering.

In this year’s report, referrals from successful placements ranked first in best sources of candidates, while finding candidates via applicant tracking systems and social media also ranked highly.

Respondents were split on how automation will affect the staffing industry, with 38% believing that it will create more jobs, 24% undecided and another 38% believing that it will eliminate jobs. Interestingly, C-suite respondents were more likely to say that automation will take away jobs.

Automation will not affect all industries equally, a point that the respondents largely agreed with. The technology industry is seen as the biggest potential winner in terms of jobs created due to automation. In contrast, many respondents believed that automation will lead to job loss in the manufacturing and accounting/finance/insurance industries.

Like last year, the top three priorities for staffing firms are increasing profitability, driving top-line revenue growth and candidate sourcing. The 2018 outlook report noted that the second tier of priorities “represent tactical initiatives on this year’s roadmap.”

This second tier includes improving the management of client relationships, expanding into new markets, automating and accelerating the recruiting and placement processes, improving the candidate experience and employment brand development and marketing.

Source: Bullhorn

As the graphic above succinctly suggests, there has been a shift in how professionals prefer to be contacted. Younger generations — particularly Generation Z, which is just entering the workforce — are moving toward texting as their preferred channel of contact. Sixty-nine percent of the respondents expected texting to grow as a recruiting communication channel in 2018.

LinkedIn, unsurprisingly, is growing in importance as a recruiting channel, but the same effect does not apply across all social media platforms. Facebook and Twitter remain “on the fringe” for recruiting purposes.

The outlook report also solicited a number of interesting and creative techniques that staffing firms employ to reach the best candidates. In conclusion, here are some of the most interesting:

  • “Contacting every candidate so they never feel that applying to our firm is a black hole.”
  • “Personalized messages on LinkedIn.”
  • “Bringing each candidate in to personally meet with them.”
  • “Quarterly newsletters spotlighting our candidates.”

Check out the full outlook report here.

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