The low unemployment rate is a good sign the economy has almost fully recovered from the Great Recession. According to the most recent data from the U.S. Bureau of Labor Statistics, unemployment has significantly decreased compared to the height of the recession. While this is fantastic news for job seekers, it makes hiring tougher for businesses.
In short, with a lower unemployment rate, candidates hold more of the power.
When there’s a low unemployment rate, people tend to move between jobs more often. As HR Morning pointed out, switching jobs tends to pay off for candidates during times of low unemployment. With fewer candidates to choose from, companies are forced to offer more attractive offers. Meanwhile, rather than staying on board at a company where they’re not 100 percent happy, employees have the incentive to make a switch.
Candidates become more valuable
Of course, these workers leave vacancies in their wake. This is both good and bad news for staffing firms. On the positive side, recruiters have an easier time engaging in conversations with currently-employed candidates who are looking to move on to bigger and better things. However, they may also find themselves in competition with several other firms and there’s always the potential the new hire won’t last very long before moving on.
Needless to say, when candidates have the power to move between different positions, it makes high-quality talent all the more valuable. A low unemployment rate is also good news for staffing firms because it heightens their value. When high-quality talent becomes scarce, staffing agencies become a critical resource. Employers don’t have time to bring in qualified talent, sort through various candidates and make a hire. When you’re working with a diminishing talent pool, hiring for specific skills can take months. During this time, staffing firms need to work to assert their value to partners. Staffing recruiters can afford to do the legwork that in-house teams don’t have the resources to handle.
Another way staffing firms can support companies is by maintaining an engaged pool of contingent workers. Having a roster of contingent workers at the ready can help businesses remain flexible in an environment where candidates come and go at the blink of an eye. This can be a useful alternative to seeking out long-term hires in an environment where candidates are just as likely to jump ship as stay on board. Instead, placement agencies can use their existing resources to more effectively maintain a contingent workforce, quickly placing candidates whenever there’s an opening.
The Staffing Difference
Staffing agencies are certainly well poised to take advantage of the current employment environment. However, sourcing talent will become more challenging for everyone. To maintain a competitive edge, agencies need to make sure they have the right tools and strategies on their side. Agile staffing software gives agencies an edge when developing their contingent workforce and sourcing strategies. The right staffing software enables recruiters to engage in pipeline nurturing and other tactics to keep contingent staff ready to go. Agencies need to be able to keep track of their best people. Otherwise, these candidates will move on quickly.