Technology and the Talent Shortage

Little seems to have changed in the past year for the staffing industry. There is still more demand for talent than there is supply, the gap continues to widen, and there is no end to both complex issue in sight.

“If anything, the skills shortage is having a dampening effect on the industry, because it’s even more extreme,” said Barry Asin, president of Staffing Industry Analysts headquartered in Mountain View, California. Clients are seeking out their services more than ever but they just can’t fill the roles fast enough.

Yet there is a subtle difference from last year as staffing agencies make some innovative changes to adapt to the new normal. The biggest investments are around agency-hosted reskilling programs to fill a variety of talent needs. At the high end, agencies like Adecco are creating or acquiring coding bootcamps to train promising candidates for hard-to-fill STEM roles — in 2018 Adecco acquired digital retraining firm General Assembly for $412 million.

Other agencies are more focused on training for lower level labor jobs that come with specific skill requirements, said Steve Bercham, chief operating officer of the American Staffing Association in Alexandria, Virginia. For example, last year staffing firm Hamilton-Ryker launched TalentGro, which uses virtual reality to train forklift operators. The technology has led to a 40 percent increase in successful placement of forklift drivers. “These skills can be learned quickly, which helps agencies fill these roles,” Bercham said.

Digital Transformation: Reality or Hype?

Virtual reality is one of many innovative technologies that staffing agencies are adopting to meet client needs. Many others are focused on streamlining sourcing, said Vinda Souza, vice president of global communications for cloud computing company Bullhorn in Boston. “Sourcing is their top priority,” she said. Bullhorn’s 2019 “Recruitment Trends” report found 57 percent of agencies plan to spend more in tech this year, with 31 percent focused on digital transformation efforts to achieve these goals.

While most believe that artificial intelligence and automation solutions will help the staffing industry in the long run, almost half question their ability to deploy and use these tools effectively. “Only 5 out of 10 staffing processionals understand what artificial intelligence and machine learning are,” Souza said.

This suggests that these digital transformation efforts will take a lot of time and will likely begin with simple automation tools that eliminate manual tasks but don’t optimize decision-making. Early movers are already using tools like catboats to engage with candidate, automated résumé screening tools, and job board posting tools like Jobiak’s AI-based recruitment marketing platform that links job boards to the Google for Jobs ecosystem.

Staffing agencies are also hiring their own AI experts to drive innovation in this space. Bullhorn recently added its first head of artificial intelligence to support development of Cleo, its AI platform. “It is on us as an industry to get to the next level of AI so that we can do predictive sourcing and improve the candidate experience,” Souza said. Bullhorn hopes that adding senior AI talent to its team will help them get there first.

Money Matters

No matter how good the sourcing and recruiting technology is, the lack of available talent means companies need to be practical about who they are looking for and what they can offer. “For roles that are always in demand, wages need to go up,” Souza said. Bullhorn’s survey shows 78 percent of staffing professionals believe employers must increase pay if they want to compete for qualified candidates.

Employers should also be open to exploring new talent pools, including candidates with a criminal record, Bercham added. The American Staffing Association is participating in the Getting Talent Back to Work pledge, an effort led by the Society for Human Resource Management to provide employment opportunities to qualified people with criminal backgrounds. “So many companies avoid these candidates for fear of liability,” he said. A big part of the initiative is to educate companies about how the court system and policies makers ensure these criminal histories can be set aside.

“Now is the time to quash the stigma of incarceration,” said Richard Wahlquist, ASA president and chief executive officer. “Employers need to embrace greater inclusivity when recruiting and hiring and give qualified individuals a second chance at success in life — particularly when the U.S. labor market is the tightest in history.”

It’s one of many ways employers and staffing agencies are opening their minds to new talent pools, and where candidates can come from.

“There is qualified talent out there that employers don’t give the time of day,” Souza said. The challenge for staffing agencies is figuring out how to convince employers that these are the right people for the job.