Trends from automation to the ongoing skills shortage and from the global economy to legislation are affecting staffing firms. Staffing Industry Analysts outlined them in a report last year, but now takes a new look at how these trends will shape up this year in a report released on Monday.
Here is some of what the report, “Staffing Trends in 2019” found:
The global economy: Hopefully more of the same, but recession risk is higher. Generally, staffing industry revenue growth is highly correlated with GDP growth; the stronger the economy, the stronger the staffing market. The International Monetary Fund has pegged global GDP at 3.7% in 2019, the same as 2017 and 2018. However, this masks quite wide variances among the world’s largest staffing markets - from a high of 7.4% in India to a low of 0.9% in Japan.
Technology/automation: Three waves of automation. Concerns over automation and the impact on jobs will remain in 2019 given the strong likelihood that many jobs will undergo fundamental change. A report by PwC Economics suggests automation will come in three waves: the “Algorithmic wave,” will continue into the early 2020s, with automation used for simple computational tasks and the analysis of unstructured data; the “Augmentation wave” will make a dramatic impact through to the late 2020s with AI and robotics used to undertake more clerical and manual tasks with a significant impact across all industries; and the third “Autonomy wave” will begin to have an impact through to the mid-2030s, with technology better able to automate physical labor through enhanced manual dexterity.
Skills shortages: Barriers to growth. For staffing executives, concerns over automation eliminating jobs are dwarfed by the threat of talent scarcity. SIA’s staffing company survey regularly shows that staffing firms believe this is the biggest inhibitor to their business today and will still be the biggest inhibitor 10 years from now.
Legislation: Ups and downs. Legislation is in a state of constant flux within the staffing industry, making it a challenge for staffing firms to stay on top of new employment laws as well as those laws directly impacting the supply of temporary workers. SIA’s Global Compliance Trends for 2019 report highlighted five major trends: data protection, worker classification, family-friendly rights, equality and restrictions on flexible working arrangements.
Gig economy: Convergence and the Uber of staffing. SIA predicted increasing convergence between the staffing industry and new online staffing platforms and expects this will continue to be a key trend in 2019. As the online staffing marketplace continues to grow faster than the traditional staffing market, we expect many more staffing firms will be tempted to take advantage of the lower-cost business model offered by online alternatives, especially when many of their own temporary workers are getting additional income by complementing their temporary assignments with freelance gigs.
Public perception: Room for improvement. Numerous negative media stories about staffing firms in 2018 proves that public perception will remain an ongoing issue and that the staffing industry still has much to do to improve its reputation and eliminate those firms and individuals who act with bad faith, if not outright criminality.
Procurement sophistication: A path to total talent. As highlighted in SIA’s 2018 Staffing Trends report, there has been a gradual evolution over the past 20 years for contingent workforce managers to adopt increasingly complex programs starting with preferred supplier lists through to master vendor programs and MSPs. Many believe that total talent acquisition is the next summit to climb combining proactive sourcing solutions for both employed and non-employed labor.
Rise of Asia: The emergence of China. With projected GDP growth of 6.3% in 2019, growth in emerging and developing Asian economies continues to outpace growth in both the US and Western Europe.