Five Must Know Trends in Staffing for 2020

Five Must Know Trends in Staffing for 2020

Published February 20, 2020

With today’s fast-moving labor markets, in addition to rapidly evolving staffing technology, sometimes it is tough to keep up on the most important trends happening in our industry. The turn of a new year is often a time when new legislation takes effect or contracts expire, as well as a popular time for new worker onboarding and renewed recruiting efforts. Sometimes the services of an employer of record (EOR) or agency of record (AOR) can be invaluable, allowing you to focus on the trends of your industry and areas for growth. People 2.0, the largest independent, global, workforce deployment platform in the world, has got you covered with this breakdown of must-know trends in staffing for 2020.

The Labor Market is Tight

Economists are projecting another modest growth in global GDP for 2020 on top of the modest growth seen in 2019. With the labor market usually in lockstep with these predictions, most staffing firms are looking at a projected 3% growth in the labor market globally, according to a January 2020 report from Staffing Industry Analysts. With unemployment in the US at historic lows, a shortage of candidates, particularly in specialized labor and technical sectors, continues to hinder staffing industry growth. Changing geopolitical environments, such as Brexit and new trade deals also threaten to slow (or accelerate) the growth of labor market makers.

AI is King

No, AI has not moved into Buckingham Palace, but it will continue to dictate labor market expectations as well as staffing industry processes. A ton of new AI products and services are emerging in the staffing industry to help streamline processes and match people to jobs and jobs to people. With many of these new AI options presenting very real cost savings and efficiencies, it is time staffing industry leaders took a serious look at how to incorporate AI into their recruiting process, if it has not already been. While it is widely believed AI will diminish or even eliminate the need for labor in certain sectors, there is no doubt demand for high-tech skills to manage and operate AI systems will continue to increase in 2020.

Pro-Worker Legislation

As political climates shift in the US and around the world, many workers and workers’ rights groups have been pushing for reformed legislation that grants additional rights to workers. As a result of this, the list of new employment legislation taking effect in 2020 is long, and the list on lawmakers’ tables across the US is even longer. For example, changes to California Labor Code Section 2810.5 requires employers to keep very detailed timekeeping records and follow very specific rules involving break times and overtime pay. Employers, and staffing firms employing contractors, who do not abide by the new regulations can face stiff fines, penalties, and additional liabilities. As workers’ rights and employment legislation continues to evolve, sometimes in a polarizing fashion from state-to-state, the services of an experienced and expansive EOR/AOR provider can help you navigate all new regulations and ensure complete contractor compliance.

New Competition

As the recruiting process relies heavier on AI and finding very specialized workers, the staffing industry has seen several new participants to the game, many not traditional staffing companies, that are worth keeping an eye on in 2020. Xerox, IBM, Google, Microsoft, and even IKEA have made acquisitions, investments, and/or launched products and services that will impact the labor market. Some large companies are starting to think ahead to gain complete control of their labor supply chain as labor market uncertainty continues into the next decade. Many of the new features and conglomerates being formed will not impact the day-to-day operations of staffing firms at the moment, but with that kind of money being thrown around, big changes are on the horizon.

Service Diversification

With the labor market as tight as it has been in half a century, staffing firms that rely on direct hire and contract placements are shifting gears to other lines of service. For example, according to a study conducted by Staffing Industry Analysts, 50% of staffing firms now offer payroll/independent contractor classification services, 19% consider themselves managed service providers (MSP), and 11% provide human resource outsourcing services. While it may make perfect sense on paper to take advantage of other revenue streams when the placement market is slow, taking on the responsibility of supplementary services in your firm must be done in a calculated and careful manner. By dedicating resources to other market-making areas of the labor environment, you may be taking away from what staffing firms, and their employees, do best: recruit. Partnering with an experienced EOR/AOR provider and back-office outsourcing firm like People 2.0 can help you to leverage these additional service offerings to your clients without having to sacrifice your entire way of doing business.

It is impossible to say just how 2020 will turn out, but with all the changes happening in labor markets around the globe, one thing is for sure: it won’t be boring! People 2.0 wishes you and your organization a safe and productive 2020 and continue to follow our blog and social media as we will provide further insight into these trends and many others throughout the year!


For further reading, you may enjoy: What is an AOR and Who Needs One? and What is an EOR and Who Needs One?