Recruiting Firms Leverage Technology To Fuel Growth
April 27, 2023 – In the midst of a rapidly evolving economy, industry analysis from Staffing Industry Analysts, a global advisor on staffing and workforce solutions, says the recruiting industry grew more than 11 percent in 2022, and many firms made the most of the opportunities in front of them. What did the top performers do differently to beat the competition? And how are they using technology to get ahead in 2023 and beyond? Cloud computing company Bullhorn surveyed more than 2,000 recruitment industry professionals across industries and across the globe to answer these questions and more in its latest GRID Industry Trends Report.
What are the top-performing firms doing differently? Looking ahead, recruitment agencies have more to consider than ever before, the Bullhorn report said. Where should you prioritize your efforts? Bullhorn examined the practices of last year’s top performers (who saw year-over-year revenue gains greater than 10 percent) and those with major losses (who suffered year-over-year revenue losses greater than 10 percent) to help you navigate the challenges and opportunities ahead. Four key findings, said the company, stood out this year:
1. High-performing firms leveraged technology to succeed in a challenging environment.
If company size, type, and region didn’t determine growth in 2022, what did? Above all else, technology and talent engagement separated the high performers from those that struggled, according to the Bullhorn report. 2022’s biggest winners demonstrated greater technology adoption across the board, three key practices emerged as especially significant. “It’s clear that agencies are leveraging technology to fuel their success, but the industry is just beginning to realize the benefits of digitally transforming their business,” the Bullhorn report said. “For example, less than one-fifth of respondents leverage automation throughout their business. Firms that continue to invest in their technology and talent pools will be well-positioned for 2023 and beyond.”
2. Top performers are doubling down on digital transformation and technology in 2023.
Digital transformation has come a long way since 2020, when only Bullhorn recorded that 25 percent of recruiting professionals reported a digital transformation strategy. 2023 represents the latest peak of this ongoing trend, as digital transformation comes in as the second overall priority for firms for the first time. “Despite the fact that digital transformation initiatives are high on the priority list, companies are still early in their adoption and are struggling to implement automated processes to accelerate their candidate and client engagement,” the Bullhorn report said. “While there is room for greater technology adoption across the industry, not all firms are investing equally in expanding their use of technology.”
“Given that the top performers are already twice as likely to leverage automation throughout their business and they’re the group most likely to ramp up efforts in 2023, firms that don’t keep up risk falling behind,” the Bullhorn report said. “Those who do step up their efforts may enjoy a significant competitive advantage moving forward.”
3. Developing new clients emerges as the No. 1 priority for 2023.
Last year, client development wasn’t the top priority for recruitment agencies, and it’s hard to understate how unusual that was, said Bullhorn. For the first time in the survey’s 13-year span, the company found that winning new clients wasn’t a top-three priority. While candidate acquisition had been the top priority for six consecutive years, last year, increased skills shortages and unprecedented demand led to a decisive talent-first approach. This year, winning new business makes its return to the top.
Why is this year different? In short, says Bullhorn, changes to the recruitment landscape have led firms to reprioritize winning new clients. In particular, pricing pressure, reductions in job requisitions, and economic uncertainty are major considerations new to the year ahead. Just how challenging will it be to win new clients in 2023? Despite the uptick in economic uncertainty, the outlook is not as bleak as you might expect, says Bullhorn. In fact, the company found a nuanced attitude about their expectations for 2023 and what that means for the industry. While nearly half of respondents (45 percent) predicted that the economy will decline in 2023, most actually thought recruiting demand will improve.
Top Priorities and Challenges
“After a 2022 defined by a candidate-first approach, clients are now back on top,” said the Bullhorn report. “That’s not to say that the need to provide top talent amidst an ever-present skills shortage is any less urgent. Firms still aim to provide a better talent experience in 2023, and look to use technology to drive those efforts. While clients are the overall top priority for 2023, it’s far from a consensus pick. In fact, several types of agencies instead chose digital transformation or talent acquisition as their top priority.”
Without exception, recruiting firms of all types and specialties overwhelmingly cited the talent shortage as their top challenge looking ahead, according to the Bullhorn report. “Otherwise, challenges look markedly different in 2023,” the study said. “Economic uncertainty and pricing pressure are new to the top five after barely registering in the top 10 last year. Recruiters reported that challenging job requisitions are the top hurdle to maintaining clients in 2023. “Relatedly, the inability to provide talent for those roles also landed in the top five,” the Bullhorn report said. “Those who can build and leverage a talent pool of qualified candidates have the best chance to keep clients happy — and away from their competition. 2023 brings a host of new challenges, but the path to success remains consistent: leveraging talent and technology to meet client demand and future-proof against any obstacle.”