What You Need to Know About Temporary Staffing Now

We pay close attention to the trends in hiring and labor markets, including the insights we generate through our employee preferences survey and internal data. It’s important to understand where the market is going and use information to adjust your strategy.

Over the last year, we have collected several insights worth sharing, many of which are worth reviewing to adjust your temporary staffing program where possible. The following fourteen ideas in five categories command our attention now.

Labor Is Scarce

Systemic Challenges Persist

The labor shortage is systemic and isn’t going to improve anytime soon. The scarcity of labor is causing businesses to struggle to acquire the talent they need.

In the United States, 11,000 Baby Boomers retire from work every day. That’s 330,000 people a month, or a number close to 4,000,000 people annually. As good as the economy and the labor markets have been over the last few years, creating an average of 200,000 jobs doesn’t come close to replacing the number of people retiring.

Implication: It is a mistake to operate under the belief that labor is abundant when it’s scarce. The shortage of talent will require more time, more effort, and a more significant financial investment for the foreseeable future. The demand for labor is very high now and will continue to be well into the future.

The Power of Your Employee Value Prop

As a staffing agency, we get to see different strategies, some that win, and others that struggle. Many of the decisions we have seen companies make don’t seem to account for the difficulty of acquiring and retaining the labor they need.

Companies who believe that they will have no trouble hiring people with pay rates, shifts, and cultures that don’t allow them to attract the people they need are mistaken about where the labor market is now, and they are losing the war for talent.

Implication: If your employee value proposition isn’t attractive to the candidates you want, you will lose them to companies with offers they find more appealing.

Too Many Filters

Every additional filter you apply to your screening process reduces the number of people available. No one loves screening more than we do. We’re still old-school enough to interview every candidate twice, something most staffing firms discontinued a long time ago.

That said, every filter you apply to a position, the smaller your pool of candidates. Starting with skills, then adding a filter for cultural fit, followed by background screenings, necessarily shrinks the pool of candidates, and for a good reason. Every additional screening makes hiring more difficult.

Implication: Increasing the pool of candidates for your open position means limiting the filters to what is essential and eliminating “nice to have.”

Both Buy and Build Talent

The skills gap and the shortage of labor combined is going to require you to buy and build talent. You may want to buy talent by offering a higher pay rate than your competition, a strategy that produces excellent results for those with the appetite and the resources. Others prefer to build the talent they need by hiring and training people.

Implications: Because many people with the right attributes lack the necessary skills, you will no doubt have to build the talent you need. But you should also buy the talent when and where you can.

Labor Is Getting More Expensive

Keep Pace with Wages

Of all the things we have seen over the last year, this lesson is one of the most important. Labor is getting more expensive as wages rise (the law of supply and demand). You do not want to allow your starting pay rate to fall behind the market for the employees you need. The further behind you fall, the more difficult it is to improve your employee value proposition.

You are better off with regular, incremental increases than working to catch up later. If it is difficult to pay $1.00 more now ($2,080 a year), it is more difficult by the widest of margins to increase your pay rate by $3.00 (6,240 a year). Minimum wage is what candidates accept, not what the Federal or State government mandates.

Implication: Even though it is challenging to keep pace with wage pressure, it’s easier than falling behind and trying to catch up. We believe we will continue to experience higher wages.

Compete on Intangibles

The less competitive the pay rate, the more you have to be exceptional on everything else. We have research that shows that you can control your labor costs by being outstanding in the areas outside of pay. In the next section, we’ll share how important are shift hours, the potential for growth opportunities, and a positive culture, one where people matter.

Implication: The right combination of tangible competitive advantages, like shift and pay, need to accompany the intangibles, like culture and opportunity.

Shifts Matter

Candidate Refuse Shifts

Even though your pay rate is the foundation of your employee value proposition, more candidates refuse assignments because of the shift than the pay rate.

Our internal data strongly supports that most people who might take a specific pay rate refuse it when the shift isn’t attractive to them. In many cases, the work hours don’t allow the candidate to arrange their life, including child care.

Implications: If you can provide attractive shifts, you create a competitive advantage in the market for talent—and you increase your retention.

Traditional Shifts Over-index

Traditional shifts still rule in the digital age. The first shift is still preferred by the widest of margins (70% of candidates). The more conventional your shift hours, the larger and more stable the pool of candidates.

Those with shift times designed to serve the new customer are going to struggle to find the employees who want Industrial Age shifts.

Implications: Your shift may be the most significant barrier to acquiring the people you need.

Retention Counts More Than Ever

Culture Rules

When there is no end of available positions, treating people well is a competitive advantage in both hiring and retaining employees. We’ve alluded to this idea here already. Yet, some people still believe that they can treat employees as if they are a commodity, a means to an end.

We witness this in high turnover, a tarnished reputation, and increasing awareness of poor cultures in the market. We have had people refuse assignments without ever mentioning the client’s name.

Implication: Bad news travels faster than good news. Your culture needs to support retention. The act of retaining good people is critical.

Stem the Churn First

While you need to focus on both the acquisition of employees, you should spend an equal amount of time and energy on retention. We’ve used the metaphor here of pouring water into a bucket full of holes. The water comes out faster than you can refill the bucket. If it is already challenging to hire the people you need, losing them as quickly as you bring them is even more challenging, as well as immensely frustrating.

Implication: You need to work as hard on retention as you do attraction. Getting this in the right order slows down the urgent need to hire.

Hiring and Talent Is Your Strategy

You Are In the People Business

If you treat the acquisition of talent and labor as if they are commodities, you will trade efficiency for effectiveness. You may improve compliance but at the cost of your productivity. We know that VMS and MSP programs are popular with people who care deeply about compliance.

But these programs come with a cost of their own, and one that isn’t front of mind for most people. The arm’s length approach lessens your relationship with your partners. Dividing your orders across multiple agencies sounds good, but by splitting your orders, you make it less likely you are a priority to any of your partners.

Implication: If you use these programs, insist on a primary supplier who will know your business, communicate, and who cares enough to prioritize your needs.

Dangerous New Models

You should never accept an employee that someone hasn’t interviewed for their role. The application of artificial intelligence has produced negative results. Companies like Uber, are already struggling with challenges of violence and the safety of passengers, are now offering staffing services, with a sign-up process that looks like their hiring process in their other businesses.

There is no more important decision than whom you bring into your company, and hiring people that no one has professionally vetted is a mistake.

Implications: Technology doesn’t yet replace human judgment. Don’t look for shortcuts on important decisions.

Speed Wins

Speed is a competitive advantage when hiring. The longer it takes you to hire a candidate, the less likely they are available. You can no longer afford to allow resumes to sit on your desk or in your inbox. Nor can you postpone interviews to some time in the future.

When there are millions of open positions unfilled, moving fast means getting the candidates you need before someone else does.

Implications: Move fast to review resumes and schedule interviews. The longer you take, the more risk losing good candidates to those who prioritize talent.

Phone Breaks

Smartphones are the new smoke break. We have noticed that few human beings are capable of being more than 18 inches away from their smartphone for more than fifteen minutes. When they are more than a foot away from their iPhone, they suffer heart palpitations, difficulty in breathing, tiny lacerations of the skin, until they finally faint. We wish we were kidding about how difficult it is to keep phones locked up or off for specific roles, but it is difficult to police.

Implications: Provide phone breaks like you would provide any other break. Make it easy to go without a phone for some time.

If we can help you with your staffing strategy, contact us here.