Staffing agencies and recruiters are faced with a variety of challenges daily. While some are easy to overcome, many continue to weigh these professionals down.
With COVID crises, thousands of staffing agencies across the country are doing their best to find top talent for their clients, regardless of the challenges.
Below we’ll discuss these so you can plan before having to deal with them.
Did you know that Recruiteze is the best free online recruitment software on the market? At the end of the post, we’ll discuss how our unique products can help you minimize many of your hiring challenges!
In this article, we will talk about some of the most common staffing challenges like:
- Navigating the multi-generational workforce
- Hiring millennials
- Applicant dishonesty
- The continued growth of the freelance economy
- Poor workplace engagement
- Talent shortages
- Managing an international workforce
- Employee retention
- Increased competition
- Cost of keeping up
- Candidate experience
We will also discuss the staffing challenges induced by COVID 19 crises and how to overcome them:
- Skill shortages
- Employee productivity
- Outdated strategies
- Lack of speed
- Unstable market
Most Common Staffing Challenges
Here we will talk through some of the most common staffing challenges agencies are facing.
Navigating the multi-generational workforce
For the first time ever, the workforce officially consists of five generations working together:
- The Traditionalists,
- The Baby Boomers,
- Generation X,
- Generation Y and
- Generation Z.
This presents extraordinary challenges to HR professionals in terms of engagement, retention, and productivity.
We must understand and embrace these differences to get the most out of our employees at every level of the business. This demands a new level of flexibility to empower us to meet employees’ needs from across the generational divide.
For instance, consider work-life balance.
Traditionalists and Baby Boomers are often characterized as “workaholics,” who value hard work and discipline to climb the career ladder. Compare that to studies showing that nearly half of Generation X considers work-life balance critical when choosing a role.
Different values apply in many areas across the board, from communication style to motivation. If you’re interested in learning more, check out our article on Embracing a Multi-generational Workforce.
Hiring millennials
We might be working amongst five generations, but the largest of those generations is now the Millennials. Learning how to attract, hire and retain this millennial generation presents a unique staffing challenge.
Read more: Hiring Millennials: What The Experts Say.
Things like building an effective work-life balance, creating goal-led incentives, and overhauling your rewards structure can go a long way.
It’s also important to address areas such as training and look at the career progress structure you have. HR professionals must also take care to address their ‘Big Questions’: who are we, who do we help, and why do we care?
Millennials are generally attracted to organizations with purpose and seek to engage in meaningful work. While things like rewards and progression are doubtless important, having a clear value proposition cannot be ignored.
With this in mind, our interviewing techniques must also improve. Cultural fit becomes even more critical, and with it, we must embrace a more refined interview process.
Applicant dishonesty
Many people feel that they have to lie to get ahead. This poses a big challenge for staffing agencies.
Here is an excerpt from a CBS MoneyWatch report, quoting Patrick Barnett, background and legal investigator:
“Some studies have indicated as much as 35 percent of resumes contain some form of deceptive past employment information. Even websites have a network of phony companies that will act as past employers, verifying a job history that never existed. In some cases, the applicant will declare they have worked for an employer that went out of business. Many times applicants will claim a degree they have not earned.”
Simply put, you cannot prevent applicants from lying on their resumes, but you can use some of the creative recruitment strategies that will prevent you from hiring the wrong candidates.
The continued growth of the freelance economy
More than 1 in 3 Americans work freelance, and that number is continuing to grow. Changing technologies make this possible, while changing attitudes value the freedom and accountability of freelance work. Equally, more support is available than ever, lowering the barriers to freelancing considerably. These things combined have led to the situation we have currently: the so-called gig economy.
On the upside, the freelance economy has been shown to increase productivity and engagement. As a result, businesses can be more agile than they’ve been before, hiring the talent they need, when they need it, without massive overheads.
On the downside, any change presents a severe challenge. How we attract, manage and motivate freelance talent is very different, and if we don’t adapt, we make ourselves noncompetitive.
Read more: The Freelance Economy: HR Implications.
Poor workplace engagement
One of the reasons the freelance economy continues to grow is staggeringly poor engagement in the workplace. According to Gallup research, 70% of Americans are not engaged at work.
Poor engagement costs the US economy around $370 billion annually – that’s a lot of lost productivity.
If the bottom line isn’t significant enough, Gallup lists nine key performance outcomes impacted by employee engagement. High employee engagement results in:
- 21% higher productivity
- 22% higher profitability
- 37% lower absenteeism
- 28% less shrinkage
- 48% fewer safety incidents
- 41% fewer quality incidents (defects)
- 25% lower turnover in high-turnover organizations
- 65% lower turnover in low-turnover organizations
- 10% higher customer metrics
Clearly, this is something you want to be getting right. That’s easier said than done, though. The Ping-Pong tables and beer fridge are only the tips of the iceberg because the actual change to employee engagement starts much higher up the tree.
It’s about embedding top-down cultural change that genuinely cares about employees.
Talent shortages
The Annual Manpower survey found back in 2015 that 1 in 3 US employers struggled to hire when they needed it. That shows no signs of abating as we continue to function in a candidate-driven hiring market.
According to Bullhorn’s 2020 Global Recruitment Insights and Data, this is the top staffing challenge recruiters face.
Most of the top talent is already taken, and we must widen our sourcing toolbox, to include methods such as group interviews, headhunting, and advertising. Attending careers fairs is a good idea, and we should seek out referrals. In addition, we should consider video interviewing and ensure our social media recruiting etiquette is up-to-date.
Managing an international workforce
The workforce is changing.
Many generations, a mix of freelance talent, and now we’re crossing international borders.
International workforce management is a major staffing concern for HR since 2017.
How do we source, hire and retain a worldwide team? What can we do to ensure productivity? How can we manage cross-borders? What impact will differing time zones have on productivity?
HR professionals must find a way to answer these questions to ensure maximum productivity internationally. There still exists what McKinsey calls a “globalization penalty,” where global companies consistently perform lower than local companies across a whole range of areas.
These businesses’ issues include sourcing and hiring, relocating, training, facilitating skills transfer, and navigating cultural differences. To fix this, we must manage sales and improve performance, and ensure cross-border teams function optimally. We must train future leaders who grasp and thrive in this global age. Finally, we must try out different organizational models to ensure we can evolve.
Employee retention
Employee retention is one of the biggest staffing challenges for 36% of IT, 36% of retail, and 37% of financial services hiring managers. Poor employee retention can cost tens of thousands of dollars, plus the knock-on effects of having to source, hire, induct and engage another employee.
On the flip side, improving retention saves time and money, increases morale, and enhances productivity.
Many businesses still aren’t doing what they could, though, and employee retention remains a major staffing issue.
There are a few things you can do to improve your retention and overcome this staffing challenge:
- Hire the right people at the outset
- Treat your employees well
- Hire internally when possible
- Create proactive feedback mechanisms
- Offer regular performance and satisfaction reviews.
- Recognize and reward achievements
- Provide more flexibility in the workplace
Read more: Top 7 Benefits of Retaining Your Employees
Increased Competition
This comes in many forms, including other staffing agencies and companies in the same industry as the client.
Here is the best way of looking at this challenge: there is nothing you can do about competition. Of course, it would be nice if you were the “only game in town,” but this isn’t the case now and never will be in the future.
Competition is what the job market is all about. It doesn’t matter if you own a staffing agency, work as a recruiter, or are seeking employment. There are always competitors to overcome.
You can do so by trying to understand the industry and candidates better and being more creative with your recruiting strategies.
Cost Of Keeping Up
You understand the challenges of achieving success in today’s world. What you don’t understand is how to spend your resources wisely.
The cost of keeping up with other agencies is more significant than ever before. Take the proper steps, and you will find that every dollar you spend is working in your favor. Conversely, if you are in the habit of wasting money, it will work against your agency month in and month out.
Fortunately, new technology is available to help staffing agencies achieve more remarkable results without the large outlay of cash.
Candidate Experience
As the hiring market continues to be increasingly competitive, the candidate experience we deliver takes on ever more importance. A great candidate experience allows you to hire better quality people, according to Lou Adler, and that has obvious implications.
One of the biggest staffing challenges facing HR professionals is the need to improve the candidate experience during the hiring process – and beyond. This has knock-on effects for engagement, retention, and productivity too, starting the hiring cycle off on a positive note.
At the least, it’s absolutely critical that you don’t make mistakes with the candidate experience. Losing track of candidates, not staying in touch, not maintaining a chain of contact – these things can be massively damaging to your brand. A smart applicant tracking system has a huge role to play here – and if you ask us, the Recruiteze free ATS is one of the best.
Covid Induced Staffing Challenges
Covid has definitely had a huge impact on the whole world, and therefore on staffing agencies too.
Essential skills shortages
This staffing challenge has been the most prominent in the healthcare industry since COVID has emerged.
Besides healthcare providers, here are the other essential workers that have been crucial and highly demanded:
- Dentist
- Psyhchologists
- Pharmacists
- Social workers
- Sanitarians
- Administrative workers
COVID19 has made a tremendous impact on these industries and made it hard for recruiters to find an experienced, knowledgeable workforce who is willing to take risks and work during pandemics.
Questions like:
- How can we attract the people we need?
- How can we provide them with safety and security during the pandemics?
- Can we get the job done if we can’t find those people?
- Will our businesses remain commercially competitive if we can’t innovate?
- How can we build these skills in new or existing employees?
Are just some that have been keeping staffing agencies and recruiters up at night.
One of the big answers to these questions is learning, adapting, and development. If we can’t hire people who already have the skills we need, we must train them.
Invest in our existing assets, so to speak, and create a competitive difference that way. Although there is an obvious cost attached here, there are also cost savings to be realized through training in-house rather than hiring externally.
We should also be looking further ahead, cultivating talent from a younger age to have the skills we’ll need in the future. To this end, apprenticeships and internships have a clear role to play.
Learning and development offer a potential solution to the skills shortage problem. It also brings its issues.
Read more: Why Your Business Needs an Apprenticeship Program
Employee productivity
A major staffing challenge for 2021 will be the need to improve employee productivity. With the workforce working from home, demanding more flexibility and a better work-life balance, it’s imperative to increase productivity without increasing hours-in-office. Indeed, simply increasing hours in the office would be counterintuitive and likely have little impact on productivity.
It seems we need to get more done in every area of our life, so increasing efficiency has a critical part to play here. Embrace new technologies designed to save you time, and make your life that little bit easier. You’ll already be familiar with the Recruiteze small business applicant tracking system – and its hacks like that can make a big difference.
Beyond that, look for ways to improve the ease of communication across your organization. Particularly in bigger businesses, siloes can slow down progress significantly. There’s also a clear link between employee engagement and employee productivity, so you’ll be focusing on many of the same changes above.
Out Of Date Strategies
Has your recruiting strategy been updated over the years? Or are you still relying on tactics that worked 10 or 15 years ago?
If you neglect to keep up with the latest innovations, industry trends, and technology, it’s possible you could continue to slip behind the competition.
Even if you have a strategy that has generated positive results in the past, it doesn’t mean you should avoid making changes in the future, especially today during the pandemic crisis. On the contrary, this is the only way to ensure that you are ahead of the game, giving yourself a competitive advantage.
Lack Of Speed
The business world moves faster today than ever before. While some staffing agencies have kept up with the times, allowing for fast results, others continue to lag.
As you begin your search for the perfect candidate, you need to act in a fast and efficient manner. Neglecting to do so could lead to the person accepting another job, thus leaving you to contact other, less qualified candidates about the position.
Hiring delays can cost the staffing agency, hiring company, and employee a lot of money.
Reducing the time to hire is a challenge facing all staffing agencies. However, how you deal with this challenge can be the difference between success and failure.
Unstable market
The market has never been as unstable as now. More and more people are out of jobs, and with companies going bankrupt staffing agencies are also at risk.
While there are industries that have been seriously impacted by COVID, like travel, there are industries that have flourished.
If you and your staffing agency have specialized only in headhunting in some of the negatively impacted industries, you should consider switching up to a more blooming industry.
An economically uncertain future and possible recession are not making this easier either.
Being able to adapt, act fast, and do what everyone else is doing way better is a game-changer in today’s world filled with uncertainty, unstableness, and crises.
Other Staffing Challenges To Watch Out For
While the challenges above are among the most common, there are others that staffing agencies should be aware of this year. These include but are not necessarily limited to:
- Understanding new trends in hiring, such as the use of social media and other digital marketing channels.
- The globalization of the workforce.
- Increase in the number of companies hiring contractors, as opposed to full-time employees.
- Flexible work conditions.
Maybe you are familiar with these challenges. Maybe you even have a system in place for protecting against them.
If nothing else, you should realize that these challenges could pose a problem at some point this year. Rather than wait for trouble to show up, you can be proactive in implementing a solution.
How to Overcome These Staffing Challenges
Being aware of a problem is one thing, but acting upon it is another. Here are our recommendations that can help you overcome your staffing challenges.
Technology Can Help
Go back in time 60 years and the staffing and recruiting industries were nothing like what you see today.
For example, staffing agencies were communicating with workers primarily via phone, fax, and snail-mail. Can you imagine!
Fast forward to 2021, and all of this has changed. Now, staffing agencies are using the internet, including email and online recruitment software, to provide hiring companies and workers with a higher level of service.
Here are some details to consider:
- Hiring companies can now communicate directly with staffing agencies in real-time, helping to speed up the process.
- Interested workers have the ability to search for job openings via the internet, rather than traditional means such as the newspaper classified section.
- Staffing agencies can collect resumes online, avoiding the need for paper with free online recruitment software.
- Agencies can create a custom careers page, perfect for attracting new talent.
- Reporting and analytics, which can be helpful both for the agency and sharing with the hiring company.
What Now?
As a staffing agency professional, all these challenges may have your head spinning.
If you don’t know what to do next, or if you are concerned about providing the highest level of service, then there are a few steps you can take. First, take a look at these below:
- Make a list of challenges that you are currently facing.
- Make a list of challenges that could bog down your business in the future.
- Devise a strategy for attacking these challenges.
- Speak with your entire staff about challenges, strategies, and how to deal with anything that comes up.
- Use technology to overcome challenges, improve efficiency, and save money.
Staffing agencies that change with the times are able to remain at the top of the industry, year in and year out. Conversely, those that fight this, those who don’t understand the many challenges, can be left behind.
If you want to be an industry leader, make sure you are familiar with the challenges you may face. Even better, implement a strategy for overcoming these challenges without delay.
Recruiteze can help combat these challenges
Recruiteze offers efficient recruitment tools to help HR and recruitment professionals meet the staffing future head-on. Our small business applicant tracking system allows you to parse, format, and easily navigate candidate information, so your online recruitment process is more efficient. You get a custom careers page and application system, which ensures your candidate experience is top-tier.
Stop doing recruitment the hard way, and start using Recruiteze today.
Read more:
Why staffing agencies need recruitment software
Agency vs. in-house recruitment
Recruitment training, best resources