To this day, staffing and recruiting professionals, and the general public, are still feeling the effects of the recession.
The employment market has been steadily, if slowly, improving, yet the lingering taste of a recession is still there. As a result, recruiters are using the latest technological developments, like staffing software and recruiting software solutions, to provide relief and to leverage the current job market.
John Vanderkin, President of Employers Overload, an innovative workforce staffing company, spoke with us about the impact the recession has had on the recruiting industry and what trends we can expect to see in the future.
Staffing and recruiting industry impacted by the recession
It’s undeniable that the recession had an impact on the staffing and recruiting industry. After all, when your business is finding jobs for qualified professionals, and employers are slowing hiring, it’s a tough time. However, not all of the effects of the recession were necessarily negative, according to Vanderkin.
“Yes, the recession had a significant impact, both good and bad, on the staffing industry. As the recession began, companies were forced to reduce their workforce and often the first to go were the contingent employees. This had an obvious effect on the staffing industry as well as those contingent employees,” he said.
Vanderkin went on to say that “on the positive side, it created opportunities for a well-run staffing organization to provide strategic consultative support to those companies that could still benefit from a contingent workforce. A good staffing vendor was able to help their client identify how temporary project employees could improve their bottom line and help them address short-term increases to their business while not creating a significant impact to their ongoing labor costs. In many instances, the staffing industry was able to help companies who have never used temporary employees understand and utilize this resource. While these opportunities did not replace the losses from the recession, they created opportunities to minimize some of the impact and to grow the overall staffing client base.”
Employment trends created by the recession
For the staffing and recruiting industry, some firms found some surprising reoccurring trends. According to Vanderkin, the unusual job market conditions and new attitude prevalent in the nation created a unique situation for staffing professionals.
“The biggest trend that we noticed in 2009 and 2010 was the difficulty in getting job seekers to accept available positions rather than staying on long-term unemployment benefits. Through our sales efforts we were able to secure many short- and long-term temporary positions. but many of the candidates we spoke with decided to remain on their unemployment benefits instead of having to go back to work. We ultimately found the workers that we needed for these positions. but recruiting and placement took much more effort than the high unemployment rate should have generated,” said Vanderkin.
On the other side of the employment equation, many employers decided to reduce the number of full-time opportunities they would make available and instead relied on a part-time workforce. In addition to paring down the number of full-time workers on staff, it wasn’t unusual for companies to begin to demand that professionals have a greater number of skills under their belt so that they could take on more diverse roles.
“With a reduced workforce many companies adopted a multi-position mindset for their existing workforce. This meant that an employee that used to perform 1-2 major roles was now performing 3-4 different roles so the company could still meet their business demands. As business increased, these companies maintained their multi-position approach, making their hiring requirements much more demanding for the job seeker. A job seeker who used to be a multi-metal welder now had to be able to operate milling equipment, learn to program a CNC machine, drive a forklift and/or be able to interact with customers regarding their specific job order. The days of being a 1-2 skill employee were beginning to diminish,” said Vanderkin.
How employment trends impacted the staffing industry
The employment market will always have an impact on the staffing and recruiting industry. However, the recession of the early 2000s had one of the more lasting impacts the industry has ever seen, and the resulting changes are expected to stick around. As the industry has found innovative ways to streamline work, besides utilizing recruiting software for better management, agencies continue to make changes to operations.
“Staffing companies made significant changes. One of the most prevalent was cutting prices. Many staffing companies would approach companies with offers of significant price reductions while promising higher and more costly screening and selection criteria than what the company was currently utilizing. While this seems like a good thing for the consumer, it created two significant challenges; 1) the staffing company increased their supply costs and 2) the staffing company found it much more difficult to find suitable candidates who could meet the new more stringent criteria, which raised their recruiting costs. In the end, the staffing company wasn’t making a reasonable income for the services they provided and what were once qualified candidates now struggle to get back to work because they cannot meet the new hiring criteria.”
Vanderkin went on to say that “we have seen a serious development occur as we meet with many of the customers who accepted these lower rates. Their quality of candidate has gone down which affected their production costs and many of the skills, background, drug screen and E-Verify screening they thought they were being provided, were being skipped by their current staffing vendor. Our organization has been able to find innovative ways to help many of these clients establish reasonable hiring requirements, maintain lower labor costs and have an audit path to ensure that they receive the screening that they are paying for.”
“Many of the trends from the recession were fleeting and have worked their way out of the process. I believe the multi-position mindset adopted by most companies will continue to be the new norm. The aggressive pricing strategies by some staffing companies cannot continue long term and still allow that company to fully meet the clients hiring requirements. I believe this trend will work itself out over the next 1-2 years but pricing that meets the value of service provided by reputable staffing companies might never reach previous levels.”
Our interview with John Vanderkin of Employers Overload continues next week, as he comments on the current state of the staffing and recruiting industry, the impact of the Affordable Care Act (Obamacare), and other government actions.