The staffing and recruiting industry is operating in the midst of an uncertain time.
The steady, yet not thriving, economy, federal government actions (or inactions), and the introduction of the Affordable Care Act have all made an impact on the industry. As result, recruiters are working hard to use the latest in staffing software and recruiting software, designed to provide the right solutions to employers and workers. Industry professionals are focusing their attention on adapting to the changing needs of employers during an uncertain economic and legislative environment.
John Vanderkin, President of Employers Overload, an innovative workforce staffing company, spoke with us about the impact the ACA and the federal government shutdown has had on the recruiting industry and what we can expect to see in the future.
Current employment market looks positive
The November jobs report from the U.S. Department of Labor details that total nonfarm payroll employment rose by 203,000 in September 2013. This is positive news. In addition, the unemployment rate dropped three tenths of a percent to 7.0 percent.
“The current employment market is picking up. We are seeing more hiring in the manufacturing and distribution industries as well as more opportunities in general clerical and administrative positions. This increase is certainly not a robust return to previous hiring levels but it is an encouraging sign that we hope will continue to accelerate,” said Vanderkin.
The potential repercussions of the ACA on the staffing industry?
As the Obama Administration works the kinks out of the deployment of the ACA, many employers are trying to adapt their recruiting software and processes to implement the necessary changes. The staffing industry is simultaneously trying to better prepare for the potential repercussions of the ACA (read the Bond White Paper on staffing industry perceptions of the ACA).
“The staffing industry should not become an avenue for companies to try and avoid the ACA requirements, but the ACA creates some opportunities for the staffing industry if companies adopt the use of certain staffing industry services. Used properly, the staffing industry can help a company minimize some of the impacts of ACA,” said Vanderkin. “Utilizing temporary employees for short- term business growth or projects can alleviate the tracking and notification requirements that a company needs to follow for ACA. Using temp-to-hire services to fill permanent positions can help to reduce turnover and avoid more costly ACA administration tasks until the company is sure that a candidate will really be a good fit for the organization.”
He went on to say that “the ACA has also created numerous challenges for the staffing industry. The increased costs associated with longer term temporary project placements, administration and tracking of the ACA requirements as well as educating the staff and candidates of the staffing company are just a few of these challenges. As staffing organizations recognize the increased costs of administrating and paying for the ACA, they will need to determine how to pass those costs along to their clients in a fair and reasonable fashion.”
Working with partners to prepare for the ACA
Staffing and recruiting professionals may have to advance their use of new recruiting software technology solutions to better prepare for the implementation of the ACA – especially as the various deadlines come into play. Vanderkin told us that his organization is focusing on educating key members of the company to take point on various ACA-related responsibilities and projects.
“We have done a tremendous amount of work to prepare for this change. We have spent a great deal of time educating key members of our staff, we continue to meet with customers and businesses within our service areas to educate them about the ACA and its effect on staffing, we are working closely with our software vendor, Bond International, to enhance our applicant tracking system so we can meet the requirements of ACA and we are continually working to answer questions by our candidates and employees on how the ACA will affect and support them,” said Vanderkin. “Keeping abreast of the changing ACA regulations is an important task of a staffing vendor and we provide this service and support to our customers to ensure that they have the latest information to base their hiring decisions upon.”
By implementing strategic tools, recruiters will be better able to meet the needs of clients. Comprehensive tools like staffing and recruiting software that boost productivity and efficiency in the office are the key to better preparing for the potential upheaval that the ACA will create.
Governmental budgeting issues and its impact on staffing
The 16-day partial federal government shutdown in October certainly made an impact on the rest of the economy and public opinion. Even as lawmakers now (in mid-December) work to pass a two-year budget agreement that may provide some stability, there is still much uncertainty on the impact of any budget agreement on the economy.
“I think any government uncertainty is bad for economic growth and unfortunately we have had a long run of government indecision to contend with. This uncertainty has had a very big effect on hiring and overall economic growth. The government shutdown in October had an effect on this overall issue but in and of itself, it will not have a major impact on hiring across the broader American business community,” said Vanderkin.
Looking forward, continued improvement in employment figures demonstrate a pickup in business demand for staffing as sales increase. This need is reinforced by continued business uncertainty, in that there is still a reluctance to hire more FTE’s until a reasonable level of economic stability is reached.