A new report from Staffing Industry Analysts found staffing firms are in a better place than ever before. In 2016 the industry will reach $14.2 billion in revenue for the first time ever, achieving a 6 percent increase between 2015 and 2016. What's driving these changes?
Staffing industry revenue is up
According to the report, one reason for the uptick in revenue is The Affordable Care Act has enabled staffing firms to increase their billing. Staffing agencies pass on the costs for healthcare for temporary workers. However, there are likely other reasons as well. The main reason behind the growth is a fundamental shift in the U.S. workforce some call the gig economy.
Employees have begun to abandon their steady 9-to-5 jobs in favor of whatever gigs they can pick up. Some workers may hold down a steady job but moonlight with various positions, like being an Uber driver, or support themselves through various projects on Elance. A lot of people supplement their income this way, but more people are abandoning their day jobs completely to be free agents, as a study from Kelly Services described. According to the report, 31 percent of workers worldwide identify themselves as free agents, meaning they are independent contractors, freelancers, temporary workers, moonlighters, and diversified workers – those with a mix of income sources.
What this means for staffing
Staffing firms are well-positioned in the gig economy. As more candidates abandon their day jobs to take greater control over their schedules, staffing firms could emerge as the best way for workers to find employment when they want it. The challenge will be for firms to collect a pipeline of the most qualified talent.
Why? According to Kelly Services, free agents tend to be a highly qualified group. Nearly half have a four-year or advanced degree, compared to 36 percent of traditional workers, and 69 percent have professional or technical skills, compared to 59 percent of traditional workers. These candidates may abandon the traditional workplace because they know they have desirable skills and want to use them in the way that fits best into their lifestyle. Staffing firms could find themselves at the hub of this economy; sourcing and allocating these free agents so they can maintain the flexible lifestyles they desire.
The same forces driving up revenue in the staffing industry will also make it a more competitive environment. Staffing agencies need to work on ways to attract top candidates and keep them on their shortlist when an appropriate position opens up. To stay competitive, agencies will require forward-thinking staffing tools that allow them to be nimble and swift in sourcing and placement. As millennials take over the workforce, this will mean implementing staffing software that makes it easy for candidates to apply using mobile or social media and platforms that don't rely entirely on the resume to judge candidates. Jobscience integrates candidates' social information as well as their application materials for a consistent method for rating talent and finding the best fit for each job.