2017 Staffing & Recruiting Trends Report

 

Bullhorn is pleased to share the opinions, outlooks, and concerns of more than 800 North American staffing professionals in its industry analysis, 2017 North American Staffing & Recruiting Trends Report: Above and Beyond Business as Usual. The report analyzes the state of the industry in 2017 and covers a wide range of topics, from the 2016 Presidential election to KPIs to revenue projection and best practices. This Executive Summary highlights key findings and statistics from the research. You can download the report in its entirety to view additional takeaways and practical strategies for performance excellence.

 

 

Executive Summary

Opportunities abound for most staffing firms in 2017, but achieving success requires going above and beyond a business as usual mindset. Sustaining profitable growth—a top priority among respondents—takes a clear focus on operational efficiencies, as well as an understanding of the increasingly complex challenges presented by a shifting economic and political environment. Moving beyond the status quo also takes a multifaceted approach, anchored by strong performance metrics and a commitment to client and candidate engagement.

Because we surveyed firms across a range of sizes and industry sectors, the results shouldn’t be interpreted as one size fits all. Rather, we encourage you to take a closer look to determine what findings might be appropriate for your unique environment. The report uncovers some powerful strategies to capitalize on industry best practices, as well as some interesting insights from survey respondents.

 

A Strong Outlook for 2017

2017 looks like a banner year for the staffing industry in comparison to last year. Surveyed at the very end of 2016, more than 75 percent of respondents predicted they’d meet or exceed their revenue goals: 42 percent expected to exceed them, 36 percent hoped to meet them, and 22 percent prepared for a shortfall.

By comparison, staffing firms are widely—and some might say wildly—optimistic in 2017. Eighty percent expect some revenue growth and 17 percent expect revenue growth of more than 25 percent. Hiring needs, billable hours, and reliance on contingent labor are expected to increase (according to 69 percent, 67 percent, and 48 percent of respondents respectively).

Close to 80 percent of firms expect to generate a majority of revenue from existing clients, leveraging internal contacts to penetrate across functions and departments. Revenue from Vendor Management System (VMS) business is expected to remain largely consistent in 2017, with anticipated decreases occurring primarily in firms that only have a small percentage of job orders driven through a VMS.

 

The Search for Sustainable Profitability

Increasing profitability and driving revenue top the list of staffing priorities for 2017, ranked by 56 percent and 47 percent respectively as a primary goal. The lowest priority across the board is moving to VMS, with 36 percent ranking it in the bottom three. Achieving financial stability takes precedence over expansion plans, as firms also ranked acquisitions and offshore partnerships among lower priorities.

 

Overcoming Obstacles

Keeping one eye on the bottom line, respondents must necessarily scan the horizon for potential disruptions—and there are plenty. It’s no surprise that a shortage of qualified talent represents the biggest expected challenge of the year (and likely far into the future). More than 60 percent of all respondents rank it as a top three challenge, followed by pricing pressures (53 percent) and economic uncertainty (37 percent).

Despite strong domestic and international challenges, a resilient spirit emerges intact. Even with the political upheaval of 2016 and volatility surrounding healthcare and labor policies, 38 percent believe their firm will be better off next year under President Trump’s administration. More than half of respondents aren’t actively concerned about the new administration.

 

Metrics Matter

Staffing firms recognize the importance of tracking key metrics, even if they don’t consistently do it. Almost two fifths (37 percent) of respondents use gross margin as the prime indicator of sales effectiveness, followed by total placements. For recruiting delivery, customer satisfaction ratings take precedence (63 percent rank as the top metric), followed by fill rate and submittal-to-hire.

To ensure the fastest ramp-up time for new employees (the usual timeframe is 1-3 months), transparency of results through metrics remains critical. With a majority of staffing employees finding it harder to deliver consistent results, retention requires a commitment to performance feedback, constant training, and support.

 

The Value of Technology Investments

Investments in technology play an important role in driving operational efficiency and improving margins. Technology adoption is high: 64 percent of North American staffing firms use an Applicant Tracking System (ATS) to track candidate activity and 60 percent use a Customer Relationship Management (CRM) system for business development.

However, firms aren’t taking full advantage of one of the best sources of qualified talent—their existing candidate database. More than a third of North American firms (34 percent) make fewer than 25 percent of their total placements from candidates already in their ATS or CRM.

 

Engaging Clients and (Especially) Candidates

Advancing the client AND candidate experience to add value and build loyalty offers one of the clearest ways to stand out from the crowd. But when it comes to engagement and satisfaction, it’s a case of “do as I say, not as I do.”

Large portions of staffing firms rank themselves highly on delivery; 92 percent say they provide good or excellent service to clients and 86 percent to candidates. However, many admit to not tracking client and candidate satisfaction at all, while others do so inconsistently. In light of persistent talent shortages, firms would be well served to implement a comprehensive approach to engaging clients and candidates across multiple channels.

For additional insights into key opportunities uncovered by the survey responses, sign up to receive the complete 2017 North American Staffing & Recruiting Trends Report: Above and Beyond Business as Usual.