Top 5 Challenges Facing Staffing Owners in 2022

Challenges Facing Staffing Owners In 2022

Every year, new changes in technology, workforce standards, and economic conditions impact the way staffing firms approach recruiting. However, with the onset and continuation of the pandemic, 2020 and 2021 both brought with them unprecedented challenges and changes. The American economy has reached the tipping point with CNBC reporting last year there were about 1 million more job openings than people looking for work. In 2020 millions of people lost their jobs as COVID restrictions and shutdowns caused hundreds of thousands of businesses to shutter their doors, often for good. In 2021 the dramatic shift to a candidate-driven market resulted in 4.5 million workers leaving their jobs by choice. Now as we turn into 2022 it’s time to evaluate what the top challenges facing staffing owners this year are. The following insights are based on Work4’s own research from our 2021 survey. 

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The Candidate Driven Market

It was true in the pre-Covid era and it’s even more true now: There are fewer candidates available than open jobs. From high level to blue-collar almost no industry has been saved from this fact. And the situation has been compounded since the pandemic hit, with a shift in the kind of employment offers and benefits that job seekers were willing to accept. Thanks to modern technology, job seekers now have instant access to research the ins and out’s of any industry and get a glimpse of what working for a company is like before applying. With this ability to access information instantaneously, job seekers have higher expectations and standards when applying for new opportunities. In short, today’s candidates hold all the cards and have more control than ever before. The first step to getting back in the driver’s seat is learning to accept change and become flexible. In a candidate-driven market, if you’re not focused on creating the best possible experience for candidates, they will turn elsewhere. 

Embracing Digital Transformation

30% of staffing professionals selected “embracing digital transformation” as their top operational challenge and digitization was one of the major themes throughout our survey.

But, in an industry that relies on a recruiter’s ability to build relationships, the right technology is paramount to success. Staffing firms often use platforms like LinkedIn, as well as online advertising and webinars to connect to and land more clients. But, technology can also be leveraged to great advantage in candidate management. From tools to automate lead generation and job postings to messaging technology for candidate nurturing and interview scheduling technology can streamline your recruiting. Just remember, the aim should never be to take the human out of HR but rather to use technology to automate the mundane tasks in order to free up more hours for your recruiters to do what they do best. 

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The Talent Shortage

It’s no surprise that a skills deficit continues to plague the staffing industry with 50% of the staffing professionals who completed our survey citing talent shortages as their number one challenge this year. Staffing firms everywhere are locked in a heated battle to attract, place and retain the candidates needed to fill their client’s open roles. However, keeping your organization competitive could mean switching gears and looking at reskilling or the practice of retraining existing employees. For staffing firms, this means helping their clients assess current employees for internal moves. Remember that the more help your firm can provide clients in assessing their internal candidate pool, the more successful the firm and the client will be.

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Getting Employers to Increase Pay

With more people quitting their jobs than ever before, and candidates holding all the cards, expected wage rates across the board are increasing. For staffing firms this means they may have to work with employers to increase their compensation offerings to match industry standards, or they may struggle to attract top talent. According to our research, 27% of staffing professionals feel that getting employers to accelerate pay increases for workers is a top hiring challenge this year. To help with this, monitor your client’s competitors to see what kind of salaries they’re paying to ensure that your client remains competitive in their field. 

Back Office Functions

Staffing firm owners can easily become bogged down by the guts and bolts of running the business. Spending time on back-office functions such as reporting, invoicing, payroll and tax. Additionally, metrics need to be compiled from various systems to track the fill rate and time to fill for recruiters. Back office tasks can take hours to complete, hours that are spent away from performing the functions that drive your revenue. Modern ATS systems, API platforms, and other technology can help ease the burden and make processes more efficient leaving owners more time to spend with their clients and their recruiters coaching, developing, and measuring.

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Staffing Challenges Can Be Overcome With the Right Solutions

To avoid candidate churn and improve hiring and retention, staffing firms must be aware of these top five challenges in 2022. Change is the nature of life and of business. The changes and challenges facing staffing owners today may have been accelerated by the pandemic, but they were coming before and new changes will come after. And, while these challenges can be daunting, staffing firms that leverage the right solutions and strategies can differentiate themselves from the rest. Work4 offers the recruitment tools and solutions you can be proud to offer your clients. From social job sharing to text recruitment and candidate engagement with us as your partner, you can help your clients and your organization evolve and grow in 2022 and beyond. Contact us today to see how we can help.

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