Staffing Firms Accelerate Adoption of Digital Transformation
July 15, 2022 – The last year saw a dramatic rise in the number of staffing businesses employing a digital transformation strategy, according to Bullhorn’s 2022 Global Recruitment Insights and Data (GRID) report, a survey of more than 4,000 recruitment professionals from upwards of 12 countries. Eighty-four percent of global recruitment firms had a digital transformation strategy in place in 2021, compared to 43 percent a year earlier, said the study. Digital transformation adoption more than tripled since 2019 when just 25 percent of firms reported the presence of a digital transformation strategy.
“The leading staffing and recruiting firms today are focused on digital transformation to unlock new levels of productivity and truly transform the way they interact with their talent and clients,” said Matt Fischer, president and chief operating officer at Bullhorn. “With the candidate experience at a premium, firms are leveraging automation and self-service to create talent journeys that match modern expectations and put more people to work.”
This is all part of a shift in priorities for agencies, said the report. “For the first time in a decade, clients (either winning new business or managing client relationships) are not a top-three priority for agencies,” said the study. Instead, candidate acquisition, cited by 36 percent of respondents as being among their top priorities for 2022, was followed by digital transformation (29 percent), and candidate experience (28 percent). Other priorities included: employer branding (25 percent), winning clients (21 percent), diversifying businesses (15 percent), redeploying candidates (15 percent), reskilling (15 percent), market expansion (14 percent), and expanding services (14 percent).
A Strategic Advantage
Given the importance of talent acquisition, agencies that automate sourcing may find themselves at a strategic advantage in 2022, said Bullhorn. Asked about what areas firms were automating in, respondents said: sourcing (48 percent), screening (45 percent), candidate submittal (44 percent), calendaring (44 percent), payrolling (29 percent), and VMS (22 percent).
There are a variety of roadblocks to adopting a digital transformation strategy, said Bullhorn’s respondents. One said speed was a major culprit: “You weren’t fast enough and now the goalposts have shifted.” Another said: “Lack of resource availability and resource management plans.” And another executive said the most formidable problem was actually getting the plan up and into action: “The biggest hurdle is acceptance and adoption.”
Among the other key findings, the Bullhorn study said that the recruitment industry rebounded in a major way last year. “2020 was a historically challenging year for recruitment agencies, with two out of five agencies reporting year-over-year revenue losses,” said Bullhorn. “For most agencies, 2021 represented a tremendous rebound. Three out of five respondents reported revenue gains in 2021 and just one out of seven reported year-over-year losses.”
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Firms specializing in IT/technical clients and firms that reported multiple verticals reported the strongest performance in 2021, with 68 percent of respondents in each group reporting a year-over-year increase in revenue, said the report. Light industrial firms were on the other end of the spectrum with just 50 percent of respondents reporting year-over-year revenue gains from 2020.
On a global scale, North America and APAC respondents were more likely to report revenue gains than European respondents, said Bullhorn. APAC respondents led the pack with 68 percent reporting revenue increases, while just 58 percent of DACH respondents reported the same.
Facing the Talent Shortage
Overall, firms said they were optimistic about 2022. “Roughly 70 percent of respondents expect revenue to increase in 2022, said the GRID report. “Above all else, an agency’s confidence in its talent acquisition propositions impacted its expectations for the year. Respondents who cited candidate sourcing as a strength were 21 percent more likely to predict revenue gains in 2022 than those who rated their sourcing as below-average.”
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Talent management, particularly hiring and retention, is a major concern and priority across industries and organizations. Over the past two years, businesses have faced multiple challenges with their global executive search, be it from COVID restrictions, a hybrid mode of work, or closed borders. As such, it’s crucial to understand the top trends that will govern the market going forward, says The Taplow Group, in a new report. Not only will this knowledge help you attract the best talent but it could also help bolster your resilience to the uncertainties to come.
COVID-19, which was last year’s top challenge, is the No. 2 challenge for staffing firms in 2022, said the report. Firms cited it as a contributing factor to the talent shortage as well as the top obstacle to providing an incredible candidate experience.
Forty-six percent of those surveyed said the talent shortage was their top challenge for 2022, while 41 percent pointed to COVID-19. Other top challenges cited by the global respondents included: reskilling workers (26 percent), hiring freezes (17 percent), digital transformation (15 percent), reductions in job requisitions from clients (15 percent), pricing pressure (15 percent), increased competition (14 percent), and uncertainty over the economy (11 percent).
Asked by Bullhorn what approaches they were taking in light of the talent shortage, respondents provided a range of answers. “Rather than simply focusing on new talent, we have reached out to our databases of over 50,000 candidates that we know are working within a relevant industry to check in and ensure we have up-to-date information on the types of roles they are looking for,” said one executive.
Said another: “Staying informed in what it takes to pull someone from a job. Lots of training on the different strategies. Getting creative. Informing our clients what it will take to get the kind of candidates they are looking for.”
“Only accepting assignments that are competitive from a compensation and opportunity perspective and where the client is cognizant of the tight labor market and the need to move with urgency,” said another recruitment professional.
The top client challenge of 2020, hiring freezes, was significantly less of a problem for businesses heading into 2022, but competition remains as fierce as ever, said Bullhorn. Twenty-three percent of respondents said that increased competition was their biggest obstacle to winning new clients in 2021, followed by an inability to reach potential customers (17 percent), hiring freezes/lack of budget (16 percent), unreasonable fees/rates (15 percent), reduced internal resources to win new customers (12 percent), communication challenges caused by remote work (nine percent), increase in direct sourcing (five percent), consolidation of staffing providers (two percent), and VMS (two percent).
Asked what their biggest obstacle was in retaining existing clients, twenty-three percent of the respondents pointed to reduced internal resources to maintain existing client relationships. Other obstacles that they cited included: lack of communication from clients (19 percent), reduction in job requisitions (13 percent), increased client churn (13 percent), reduced internal resources to maintain existing client relationships (11 percent), clients are unable to make payments (eight percent), lack of visibility into client relationships (five percent), inability to provide additional requested services (four percent), and lack of visibility into client analytics (three percent).
Once again sourcing, cited by 24 percent of respondents, topped the list of recruitment lifecycle challenges, said Bullhorn. Other recruitment lifecycle challenges included: gathering requirements from clients (21 percent), back office administration (18 percent), screening and validating (13 percent), and onboarding (seven percent). “With the exception of requirement gathering, many of the top challenges can be streamlined through automation, and indeed many firms have reported newly automating these processes in 2021,” said the report.
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Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media