Thinking Today about Tomorrow’s Trends in the Staffing Industry

I’ve written a number of posts about the future of temporary staffing and how you can stay ahead of the curve. Fueled by both the economic recovery and the implementation of the Patient Protection and Affordable Care Act (ACA), the industry has been on an upswing for the past several years. Companies have been increasing their contingent staff numbers so much that a new term, “permatemp,” has been coined to describe this new class of worker.

Right now, the staffing industry is still growing—and is likely to continue doing so for some time. But as I pointed out last month, “keep in mind that markets can change on a dime.” As the economy settles into a new norm, we’ll reach a point where the industry’s growth will slow. And anyone who wants to survive (much less thrive) in those conditions had better be ready for when that happens.

Once the shift to a new workplace dynamic is complete, companies will need to find new ways to manage, maximize, and increase efficiency. For example, an increase in business leads to an increase in competition, which in turn may lead a company to determine that it has too many staffing company relationships in place. As a result, the company will look to consolidate those relationships while maximizing its talent pool. In other words, that company may choose to deal only with one staffing firm that offers the same results by itself as ten or twenty similar firms all working at the same time.

Based on my experience in this industry, I predict significant increases in the following trends and services.

  • Vendor on Premise (VOP): A vendor that operates at the client’s workplace and is responsible for staffing and managing the client’s labor needs. The VOP may provide staffing from its own ranks or hire from outside sources.

  • Managed Service Provider (MSP): A variation of the VOP, with the exception that an MSP does not do any recruitment itself but relies exclusively on outside suppliers to provide staffing to meet the company’s needs. This service appeals to companies that want to increase efficiency in managing their vendors without putting too many eggs in one basket.

  • Vendor Management System (VMS): A piece of software that manages staffing hires and payment and shares information among several parties (e.g., client, recruiter, staffing firms). Because a VMS automates many aspects of recruitment and hiring, many companies desire the increased efficiency it brings to staffing processes.

There’s no need to do a 180 and radically change your business model right now. But these trends will definitely shape the staffing industry over the next five to ten years, and you should keep this in mind when refining your processes, making acquisitions, and developing strategic partnerships.

Heraclitus said, “The only constant in life is change,” a truism that has held up over the millennia. We’ll see it proven true again in the not-too-distant future, when the economy and staffing industry undergo new transformations. So start thinking today about where the market is headed tomorrow—and make sure you’re ready to adapt to any changes that come your way.

 

 

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