People2.0’s Flexible Work Program benefits a distributed workforce by allowing...
The past few years have generated a perfect storm of trends that accelerated the transformation of staffing agencies in North America. Technological advancements in concepts like direct sourcing and candidate preferences were already moving towards the borderless workplace evolution. The pandemic only exacerbated the need for remote employees and the hybrid office on a massive scale which presented some staffing agencies with a challenge to adapt to the global talent ecosystem.
As we shift to a distributed workforce, it’s important to keep in mind how staffing firms can best serve the needs of their clients today, while being mindful of changes for the future. Adapting an operational model of sourcing candidates from around the globe means that you now have a larger pool of resources with similar skill sets. Likewise, global candidates can sometimes be more affordable than hiring locally, which can increase your spread while maintaining the same rate for your clients.
Remember the days when the staffing business was all about keeping it local? Companies focused on local offices with local sales teams that built up a local clientele and staffed local jobs with local candidates. Staffing professionals developed their clientele at the local level by making cold calls and developing relationships in the community. At the same time, agencies focused on growing their database of local candidates.
Most agencies were firmly rooted in this localized system of staffing, but different ideas about hiring had been sprouting over the past twenty years. Those ideas grew out of the dotcom boom-and-bust era. In the 1990s, when Silicon Valley emerged as the high-tech center of the US, web developers, computer engineers, data analysts, and other technology workers from around the country made the trek to northern California. But as Bay Area dotcoms amped up it soon became clear that the “hire local” approach used by most employment agencies couldn’t keep up with the demands of the region’s high-tech market.
At that time, high-tech companies also began to set up a different kind of workplace, one that embraced the notion of the remote employee. One of the early adopters of fully remote work was Automattic, the company behind WordPress.com. Automattic adopted the concept of a distributed workforce when the company launched in 2005 out of San Francisco.
Toptal, which specializes in matching remote high-tech candidates from around the world with global high-tech remote jobs, has been fully remote since it launched in 2010. Its employees are based around the world and work remotely.
Direct sourcing for gig workers rose in popularity with companies looking for a specific job to be done quickly. Marketplaces like Upwork and Fiverr saw an opportunity to connect a remote workforce to companies looking for a specific project ranging from designing business cards to chemical engineering. In 2021, freelancing contributed $1.3 trillion to the US economy.
Companies across the globe are embracing the concept of remote work or a hybrid return to work and that’s not going to change any time soon, if ever. From entry-level customer service reps to high-level executives, working from home has become a dream come true for many reasons, including the end of commuting. The rise of remote work also led to changes in the housing market. Many people decided to pack up and move to another city, town, or even another state to be closer to their family, nature, or to save money.
Although we saw an expansion in remote work, over the past two years, several industries were hit hard during the pandemic including travel, hospitality, logistics, and restaurants. On the other hand, IT and healthcare continued to see double-digit growth year after year. These trends have impacted staffing agencies as they now have to source and relocate candidates from other areas.
“Shifting technology from location-centric to skill-and-culture focused enables staffing firms to move from the local model to a global one. “
One of the greatest challenges of the remote workforce transition is hiring and onboarding. The fit and finish process of candidate placement ensures that a potential employee’s professional presence and attitude fits the company’s culture. While we continue to rely on our expertise in assessing candidates, we also need to think outside the box, or rather outside that thirteen-inch laptop screen.
Previously, a candidate would physically come into a staffing and recruiting office and you’d get a sense for how the person would fit with an organization based on their personality, communication skills, and how they dressed for the interview. Now, with video recruiting, determining fit and finish can be difficult when candidates are interviewing from home and unexpected interruptions can happen, like a dog alerting everyone that the mail has arrived. Some executives tolerate employees wearing hoodies, while others demand a more professional appearance. Ensuring that the candidate is ready for potential employment means there has to be more time spent grooming potential placements.
Another challenge for staffing agencies is how to manage changes in the labor market—from the generational trend of baby boomers retiring to the Great Resignation trend of employees quitting their “day” jobs en masse. Added to this is the shifting focus from hiring at the local level to hiring at the international level. While many staffing agencies had to streamline their sales departments with layoffs due to the pandemic, meeting the current needs of the market can require operational reconfiguration and staff training.
Many employment agencies had already begun to reshape how they do business well before the pandemic. For example, some agencies were reconfiguring their databases into “self-serve” platforms to make them more user-friendly and accessible. Companies or organizations could peruse anonymized potential candidates on the staffing agency website or portal. This trend emerged as buyer behaviors changed from finding the staffing agency first, to ensuring that the agency had quality candidates before they’d even pick up the phone. Trendsetters used anonymized data as a selling tool to encourage clients to “browse before they buy.”
With the expansion into worldwide recruiting, new challenges have also emerged in the field of labor law expertise across the US and abroad. Employment agencies moving from sourcing local, to sourcing nationally, and now globally, opens the door to a host of complexities around labor and tax compliance that can be daunting to even the most seasoned recruiter.
Some employment agencies have been preparing for this shift since the dotcom days, investing in infrastructure upgrades over the past decade. Companies, such as Korn Ferry, Robert Half, and Heidrick and Struggles, began to reconfigure their operations to focus on maximizing the efficiency of the value-chain and closing the gap between the work and the worker. Shifting their technology from location-centric to skill-and-culture focused enabled these staffing firms to move from the local model to a global one.
With direct sourcing on the rise, where can staffing and recruiting firms add value? The answer is in the ability to make quick, high quality placements and maintain strong client relationships, both are key differentiators in the industry. Having a thorough, easily indexed, global candidate database is a start. Fortunately, advances in artificial intelligence learning for candidate matching and the modernization of the Customer Relationship Management (CRM) platforms can give firms the edge they need to compete for top placements and reduce the chance of a bad one.
The past two years have underscored the importance of a positive perspective when it comes to change and meeting the needs of our clients today, tomorrow, and beyond. By broadening our perspective, we can begin to see opportunities rather than problems.
A good place to begin this process of embracing change is by examining where your agency is right now and where you want it to be in a few years. Yes, it will take some investment of time and resources to implement changes whether it involves going borderless, enhancing your search engine, understanding labor laws around the world, or deciding if your agency should be hybrid or fully remote. While some agencies may become experts in the remote staffing arena, there will be opportunities to recruit in industries that can’t employ remote workers or for companies that prefer a full return to the office. Diversifying your specialities is a great way to protect your agency from volatilities in the market.
If there’s one thing we’ve learned in the past two years it’s that change can be rocky, but you don’t have to go it alone. Partner with an expert to ensure that you’re organizing operations to meet the needs of today, as well as futureproofing your staffing agency to meet the needs of tomorrow.
Implementing changes for the future doesn’t have to be a daunting process. People2.0 is a leading expert in global EOR and AOR services allowing our clients to focus on what they do best, placing great candidates. Contact People2.0 today.
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