If 2023 was the “OMG” of recruitment years because of its unrelenting ups and downs, we hope a touch of “FOMO” next year will push many recruitment firms to switch on to tech.
As you begin to finalize 2024 plans for your staffing firm, what you choose to do next year really matters for the world of work and the people profession. Staffing firms cannot afford complacency now that the post-pandemic boom has eased. While your business experience will shift and things might be harder, there are huge opportunities out there for firms who get it right.
So, what can drive growth and improve margins? Great business development, strong and advisory client experience and top-notch candidate care are three key areas of action — the REC has been supporting firms in the UK on all three this autumn. But your people can be more effective in all these areas by adopting and utilizing tech that helps to transform client and candidate experience.
The first stage is simple to say, but hard to do. Commit to use existing technology better in 2024 — both the things that you already have and things in use in other businesses. You don’t have to jump on the hype train to artificial intelligence (AI) this New Year’s Eve, but making progress will help you get on the right train when you are ready. In a couple of years’ time, you will be grateful that you did the work on your data strategy and platforms because that is what will enable you to automate better — and to harness AI. A great principle is to automate the process stuff wherever possible and humanize the stuff that really matters in client and candidate relations. That’s a recipe for staffing to be seen as the professional services sector it is.
As we counsel in our Tech Enabled Humanity report, don’t be overwhelmed. With common sense moves — such as properly researching what you have on your to-buy list, making sure anything new can be effectively integrated with existing systems and that employees are trained to use any new tech — the move is not as daunting as you might think.
As I recently told an audience at the Recruitment Agency Expo in Birmingham, UK, the future is all about staffing firms showing adaptability and a determination to deliver for their clients. Our recent JobsOutlook showed employers feeling more confident about investing in recent months, which suggests client demand will recover at the end of the fourth quarter. So, it is vital to be ready with an attractive, tech-enabled offer for the next 12 months.
All of this requires real leadership — it’s not one for your IT team alone. From adoption by consultants to risk and affordability concerns, there is a lot to think about. The era of low interest rates is over, so cash for investment comes at a much higher price if you need to borrow. And client risk is ever more important in a slower economy and with payment terms risking clients using the industry as a bank more and more. Any investment strategy must be balanced by a clear understanding of the short-term trading risks as well as the longer-term risk of being left behind.
All this has profound implications for the level of risk you want to take on in your business and what risks you want to price in and how. But there is good news: Generic products often deliver 80% of the benefit at 50% of the cost, while there are opportunities to look beyond the specialist recruitment technology sector for solutions in use elsewhere, as we set out in out report. Be a magpie — go and find what works for you!
We should welcome disruption caused by tech because it will help us compete and raise our game, embedding staffing as a professional service sector. Staffing firms who want to offer transformative services to clients and candidates, not marginal improvements — especially in a labor market with more than 2.5 million job postings like the UK — will be the ones who win.
