Industry Overview:
Over the five years to 2018, the Staffing and Temp Agencies industry has recorded strong growth due to a stabilizing US labour market and overall economic improvements. Industry operators supply businesses with workers for predetermined periods to supplement their existing staff. Industry revenue increased rapidly in both 2014 and 2015 as the national unemployment rate declined by almost a full percentage point in each year. Domestic employment increased over the five years to 2018, in part because companies became comfortable hiring temporary employees to supplement their existing workforces. During the latter half of the period, industry growth has slowed; as the national unemployment rate fell below 5.0%, economic conditions stabilized, and many businesses once again sought permanent workers through the traditional hiring process. Additionally, despite weakening demand from the industrial segment, stronger demand for temporary staff from the professional services sector helped the industry move forward in 2015 and 2016.
Overall, industry revenue is projected to increase an annualized 5.6% to $178.0 billion over the five years to 2018, including projected growth of 2.9% in 2018. Having benefited from various macroeconomic trends over the past five years, industry revenue growth is expected to slow over the five years to 2023. Corporate profitability is expected to continue to grow an annualized 2.4% over the five years to 2023. This will give companies increased confidence in their long-term financial stability needed to hire permanent employees as opposed to temporary ones. While this is expected to temper demand for industry operators’ services, workers looking to re-join the labour force are expected to continue to present an opportunity for industry operators. Overall, industry revenue is expected to increase an annualized 1.5% to $191.3 billion over the five years to 2023. Similarly, industry profit margins are expected to remain stable over the next five years.
Technological change is quickly altering the way the industry operates
Technological Change:
The industry has experienced a High level of technological change in recent years. Online services have dramatically changed the way Americans search for jobs and how companies find suitable candidates. Online job listings have become an industry standard as operators post new vacancies with job descriptions online, which gives potential candidates access to a large pool of job openings with ease.
Over the past few years, temporary staffing companies have also relied on software and web-based programs that offer simpler and more effective tracking of potential candidates. Companies are able to use programs to create new candidate openings, schedule interviews, and meetings, analyze results and screen resumes with ease. Multiple users are able to log into software and web programs with varying levels of access and create internal notes or message candidates. This also lets companies search through a large pool of potential staff quickly and easily when looking to fill a new temporary role. Online and computer services have also facilitated other services typically provided by temp agencies. For example, agencies are able to conduct interviews online via video or web chat; conduct webinars and ask employees to demonstrate skills; provide psychometric or personality testing. Why is there a shift toward mobile technology?
Millennials and their love for Texting:
Today, the biggest change in the industry is due to the demographic that the workforce comprises of “Millennials”. It’s no secret that Millennials love texting. They view it as a less disruptive, more convenient form of communication.
Texting and mobile communication is the preferred way to reach the majority of today’s workforce, especially those who are part of the growing gig economy. And having a workforce management tool that allows you to communicate via someone’s preferred method, whether it’s text, in-app chat, email, or a combination, makes it easier to optimize worker engagement. But what of the other benefits of having a mobile solution?
Benefits of Mobile Technology for the Industry:
Beyond just increasing message engagement, apps can provide benefits for better branding, worker tracking, and analytics. Some of the features of an app are that it has a real-time communication hub that will not only empower workers through a direct channel to a recruiter, but it will help keep them organized by offering all the details they need in one place.
It would also Offer up-to-date worker information like availability and skills that have several benefits unto itself. It empowers workers, giving them flexibility and fit in their job selection, and it allows recruiters to be more targeted. Recruiters can save time in outreach by pre-filtering through key fields and set up campaigns that target specific things. You can read more about this here.
Apps are the future of the Staffing Industry because candidates expect engagement and apps can deliver.
With Uber officially entering the industry and already capturing the Chicago and Los Angeles market, Mobile technology is the only chance that smaller agencies have to stay in the game.
If you would like to learn more, here is a link to a free eBook that can give you an insider look into the future of the Staffing Industry.