Recently, I attended SIA’s Executive Forum North America, which brought together senior leaders from staffing firms of various types and sizes.
The conference theme perfectly reflects the state of our industry: Leadership in a Time of Turbulence. From my perspective, the primary factor behind the turbulence in our industry remains the state of the workforce, which looks vastly different today from what it was prior to March 2020.
For example, according to the US Bureau of Labor Statistics (BLS), the unemployment rate in March 2024 stood at 3.8%, a slight change from the rate of 3.9% in February. At the same time, the labor force participation rate that month was 62.5%, down from 63.3% in February 2020, according to an analysis by the US Chamber of Commerce of BLS data. Put another way, the data indicated that there were 9.5 million job openings in the US, but only 6.5 million unemployed workers in February.
Another area of concern voiced by staffing industry leaders was economic conditions. Along those lines, it was noted at the conference that CEOs are concerned about political unpredictability, an issue that likely will persist until after the election.
Due to these factors and others, SIA predicts that US staffing industry revenue will be down by 3% this year. That’s on top of an estimated decline of 15% in 2023. SIA forecasts that US staffing industry revenue will grow 3% in 2025.
Not surprisingly, practically everyone at Executive Forum North America seemed to agree that staffing firms in 2024 continue to face unprecedented changes and challenges. Fortunately, corresponding growth opportunities exist for companies that adapt to current conditions and put strategies in place to adopt new technology-driven approaches for the future.
That begins with embracing, not fearing, new tools and technologies, with an eye toward realizing how they can enhance our business and operational performance. Especially as it relates to the growing use of artificial intelligence (AI) and automation technology, today’s situation mirrors what happened when major online job boards were launched more than 20 years ago. At the time, many staffing firms thought these sites would hurt our recruiting business. As it turns out, those websites help us by providing another platform for promoting jobs and finding talent.
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As a case in point about the role of technology in today’s staffing environment, we recently added an AI-powered virtual recruiter service. This software helps us to significantly expedite speed to market, from the time we receive a requisition to when we fill the position. The program first searches our database of candidates to identify those who might be a good fit. Self-identified “virtual recruiters” then place calls to those potential candidates. If the person is interested and passes the initial screening, they are forwarded to a TalentBridge recruiter who follows up with an email and phone call.
The time that we save by not having to manually identify, contact and vet candidates is significant. Equally important, eliminating the monotonous tasks associated with the early stages of the recruiting process enable recruiters to focus on the most meaningful and enjoyable part of their jobs — talking to pre-screened qualified candidates and placing them in positions.
While the essential role that technology plays in helping staffing companies streamline workflows and increase efficiencies will only continue to grow, it’s important to acknowledge potential areas of concern. First and foremost, employees will likely worry that automation will replace their jobs. To address this issue, be prepared to proactively point out to team members that automating tasks will enable them to focus on providing higher value services. In addition, incorporating new technology requires planning for substantial costs upfront and setting realistic expectations about the timeframe for seeing a notable return on investment.
The conversations about the growing use of technology and the changing nature of the workforce made it clear that many of the processes and approaches that staffing companies have followed previously simply won’t work going forward. At the same time, the conference confirmed that building and maintaining strong partnerships with clients, colleagues and candidates still matters more than anything else for creating a successful business in our industry.
The biggest takeaway for me is that leadership in a time of turbulence, stability or something in between really comes down to these two principles: prioritizing people and embracing change.
