Recruitment Trends

Challenges faced by Staffing Agencies

Challenges faced by Recruiting Agencies
Written by fatraven


Staffing agencies are constantly made to experience change; it could be new technology, economic conditions, supply of talent, advanced skills and the list could go on. Some of the pain points we can point out are what determine how staffing agencies craft a strategy to stay in the race and beat the rest in the race.

Combatting talent shortages, embracing digital transformation, and getting employers to accelerate pay increases are three of the biggest challenges facing staffing firms in 2020. Staffing firms provide a valuable service because they have employees that can be hired out to businesses for anywhere from a few months to a few years, depending on the business’s needs. 

A lot has changed and evolved across the globe as far as the working trend is concerned and staffing agencies are expected to stay abreast with the changes as they help serve their clients, in turn, to serve their needs and hence has a chain response to the entire economic scenario. 

Smart staffing agencies arm themselves with data about the realities of the skills gap that can exist even when unemployment is high. It’s important to have a heart-to-heart about those requirements upfront with a focus on what the client wants to achieve rather than just what’s on their wish list. Of course, sometimes employers have to experience the disappointment of letting “good enough” candidates getaway a couple of times before they acknowledge that they need to revisit their expectations. Staffing agencies may want to situate themselves as strategic partners with employers. Staffing agencies would step in to assist by helping employers review their training programs. It might be possible to find areas where employers can add development to close the skills gap after hiring.

With the changing trends, the gig-economy is the upcoming movement as a lot of working individuals are abandoning the conventional 9-5 work hours and are embracing the independent work mode. Approximately 150 million workers in North America and Western Europe have left the relatively stable confines of organizational life — sometimes by choice, sometimes not — to work as independent contractors. Some of this growth reflects the emergence of ride-hailing and task-oriented service platforms, but a recent report by McKinsey found that knowledge-intensive industries and creative occupations are the largest and fastest-growing segments of the freelance economy. Working in silos on a project-to-project basis for one or many employers is the new work scene now. Depending on who you are listening to, the gig economy is either the best or the worst thing to happen to the world of work.

Many of the gig economists have acknowledged that they felt a host of personal, social, and economic anxieties without the cover and support of a traditional employer — but they also claimed that their independence was a choice and that they would not give up the benefits that came with it. Although they worried about unpredictable schedules and finances, they also felt they had mustered more courage and were leading richer lives than their corporate counterparts. The gig economy offers some advantages to recruiters like platforms that could be an alternative way to find new candidates, a resource to enhance their service offerings to employers, and will allow recruitment experts to stand out in the market.

They cultivate four types of connections — to place, routines, purpose,  and people — that help them endure the emotional ups and downs of their work and gain energy and inspiration from their freedom. As the gig economy grows worldwide, these strategies are increasingly relevant. Indeed, we believe they may also be helpful to any corporate employees who are working more autonomously, from home or a remote office, or who feel they might one day want — or need — to jump into a freelance career.

Such independent consultants and artists feel that the stakes of independent work are enormously high — not just financially but also existentially. Unshackled from managers and corporate norms, people can choose assignments that make the most of their talents and reflect their true interests. They feel ownership over what they produce and over their entire professional lives.

However, the price of such freedom is a precariousness that seems not to subside over time. Even the most successful, well-established people still worry about money and reputation and sometimes feel that their identity is at stake. You can’t keep calling yourself a consultant, for example, if clients stop asking for your services. For this reason, productivity is an intense preoccupation for everyone. It provides self-expression and an antidote to precariousness.

They care about both being at work — having the discipline to regularly generate products or services that find a market — and being into their work: having the courage to stay fully invested in the process and output of that labor.

Sustaining productivity is a constant struggle. Distress and distractions can erode it, and both impediments abound in people’s working lives.

The gig economy is somewhat in an infant state and there is no telling what the future holds. However, as long as staffing firms stay on top of it, they may find that it will work to their advantage. Ultimately, gig work exists because companies, workers, and customers all benefit from it. For many such gig workers, employment as no longer an anchor she missed but a shackle she’d been fortunate enough to break.

Some see it as a much-needed antidote to a humdrum nine-to-five existence, empowering them to work with freedom and flexibility. Others focus on the precarious nature of gig work and its potential for exploitation. So, which one is it?

To find answers, let’s take a closer look at what the gig economy is, what it offers, and what it means for the future of work.

What is essential to take on the gig economy is the flexibility and autonomous work style. It is offering flexibility in very many ways of linking employers and clients using new applications, softwares, and AI-based tools.

How does this act as a springboard to success for staffing agencies? Here are some of the few reasons we have noticed is affecting the staffing agencies over the past years:

  1. Specialization – The market is full of generalists; specialization is what gets you faster to the right candidates with specific skills. Your specialized niche gives you an edge in sourcing candidates with speed and gives you so much leeway as a staffing agency. Connecting the right gigs with the right jobs is crucial to stand out in your business.
  2. Updating your Management Systems Handling seamless workflow across the organization is a challenge especially when you have so many apps and softwares that empowers the worker. Setting up and utilizing the right softwares to warrant a seamless workflow is essential to track data and manage overall systems. 
  3. Transparent Work Environment – Gigs enjoy free workspace and don’t enjoy ‘corporate walls’ that dictate strict regulations and red tapes that control their outcomes. Gigs are straight forward and enjoy a non-bureaucratic work style. If systems impede productivity, simplifying processes is essential to increase productivity at the workplace.
  4. Finding the match – The Gig economy had the workplace so flexible that people are specializing in skills they are good at. So, finding the right match to meet your clients’ needs monetarily and deliverables is imperative. 
  5. Advanced Technology – Determining what technologies will help scale up the performance of the recruitment business is always a challenge in this globally dynamic world. Finding the right tools to leverage process efficiency is an ongoing ever-evolving task. When there is dime a dozen technologies and softwares to pick and choose from, it’s easy to make you go around in spirals. That’s where understanding the scalability of your business and having good knowledge about your clientele is essential; this will help you zero in on the right tools to bring in value for money and enhance efficacy in processes. 
  6. Ghosting – It’s a common term in the dating world, did you say? Not really! Ghosting happens in the recruitment industry as well. ‘No call no show’, ‘Fly by night’ staff…many a terminology. People who start assignments and don’t turn up after a day or two are quite common a feature across the globe. Reasons could be many. It points out to all staffing agencies to have more robust processes when placing a candidate as it not only attributes to a loss of business but also ruins your relationship with your client. At the end of the day, your Customer Retention would take a beating.
  7. Economic Fluctuations – Staffing agencies have a list of issues that they are challenged with through the year – economic slowdown, fluctuating GDP, uncertainty in employment trends, and unforeseen recessions. The right analytics and good financial management are essential to handle uncertainties in business for better sustenance.
  8. High Turn Over Rate – According to the Bureau of Labor Statistics, the job market is tightening. With compensation steadily increasing and job openings readily available, employees are leaving their current jobs in search of better opportunities. The high turnover leaves employers anticipating filling more roles in 2020. job openings are happening even faster than people entering the workforce or quitting current jobs. This opens the door to a lot of competition in the workplace. Rather than having several candidates competing for positions due to limited availability, there is now a plethora of positions opening up and not enough applicants to fill them. Rest assured the job economy holds strong which means staffing agencies will definitely have their work cut out for them in 2020. It will not come without challenges but without challenges, there wouldn’t be room to grow and obstacles to overcome.


The list can be endless and sound like running a staffing agency is like opening a ‘Pandora’s box’! 

With the demands at the workplace changing drastically, it is pertinent for staffing agencies to help their clients understand the dynamics of the new economy and help them transit effortlessly without having to affect the bottom lines. After all, every work style has its flipsides, and monitoring a flexible work style with the gigs involved could be making it challenging as remote working is picking up and handling cross border teams, and ensuring productivity are not easy. 

That’s where business intelligence and AI come into the picture! It’s because firms are trying to find the best ways to incorporate automation and artificial intelligence technologies into recruiting strategies. While process automation is here to help firms alleviate administrative and low-level tasks, true artificial intelligence isn’t here yet. After all, in relationship-driven businesses such as staffing, only humans have the precise empathy to match and advance conversations that can yield stronger relationships with candidates and clients

The right tools to reduce human efforts and leverage efficiency is the new trend and the most essential need in the coming days. 

Watch this space to learn how fatraven leverages business potential for staffing agencies by bringing forth its advanced tools to assist staffing agencies and recruiters optimize on business potential rather than spending humungous efforts in working on the mundane tasks yielding very minimal results.


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