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What Is the Future of the Staffing Industry?

By Timerack

August 30, 2021

The coronavirus pandemic has left us thinking a lot about what lies ahead for the future of a number of industries. So after more than a year and a half of widespread remote work and dramatic changes to recruiting, it’s natural to wonder what the future holds for the staffing industry.

While we all know it’s impossible to predict what’s going to happen next — especially during such unprecedented circumstances —  one of the most useful things we can do is to think about the potential challenges that might lie ahead, as a form of risk assessment. 

Whether these challenges are customer-oriented or more hazardous for staffing agencies themselves, it’s useful to brainstorm how they might play out, so that both parties have some time to assess how they can respond. 

We’ve made a list of challenges that lie ahead for the staffing industry and suggestions on how staffing agencies can combat these challenges and get an edge on their competitors. 

Shortage of Clients 

With the economic impacts of the pandemic weighing heavily on most industries, staffing agencies could find themselves faced with less demand for their services. 

For agencies with existing clients, financial difficulties could leave customers unable to make payments or have to delay them. And for agencies that may not have many clients and are looking to take more on, they might experience slower acquisition rates than what they would have been used to before the pandemic. 

For this reason, it’s important for firms to have insurance to cover them in the event any client contracts are broken in the future.

On the other hand, the unpredictable nature of the pandemic has also created a need for more contractual or temporary staffing. In some cases, this could work to a staffing or recruitment agency’s advantage, depending on the industries they work with. 

Remote Work 

In order to continue working during the pandemic, many employees across the world have shifted to work-from-home setups. 

When it comes to the staffing industry, working remotely presents its own specific challenges, both for agencies and their clients.

Given that the staffing industry is all about finding candidates to match and fill empty job vacancies, it’s important to think about how the hiring process has changed during the shift to remote work. 

Everything about it is different — remote interviews present challenges in logistics, technology, and time zone differences, among other challenges.  Hiring remotely also means that there’s generally a wider pool of candidates available for job vacancies, so staffing agencies will need to think more carefully about who is the right fit for the job. 

And once hiring is over, the remote onboarding process also presents unique challenges for new or prospective employees. New employees may struggle with a lack of in-person introductions, virtual meetings, and getting to know the entire team and its dynamic from a remote setting. 

One of the ways staffing agencies and their customers can prepare themselves to face the challenges of remote work in the future is to continue investing in the latest staffing agency software that makes working remotely just as easy as working in an office. 


Another theme the pandemic has brought to the forefront is diversity. As a result, many companies are now striving to form more diverse workforces. 

However, while achieving diversity in the workplace might sound simple, the reality is that it’s actually very difficult to begin to even out gender and racial biases that have existed in professional contexts for centuries. 

But in some ways, remote working has actually made it easier for staffing agencies and their clients to achieve greater diversity in the workplace. 

By hiring remotely, companies no longer need to worry about location bias cutting off access to jobs for those who live in rural areas, which beforehand would have prevented them from working in city offices. These days, employers are less likely to discriminate against candidates based on their location. 

In addition,  staffing agencies can follow other diversity initiatives like seeking out members of marginalized groups for leadership roles and using AI-powered hiring tools with inclusive algorithms.  

Skills-Based Employment 

When it comes to hiring, the pandemic has also encouraged many staffing agencies to focus more on the skills of job applicants rather than their formal qualifications. 

Given that both education and exams have been disrupted during Covid-19, formal academic achievements can now be interpreted in a very different context than they were before. 

Moreover, fewer students are considering higher education now that the college experience has dramatically transformed due to distance learning. Instead, after they finish school, students may be more interested in starting a job right away or even doing an internship. 

When hiring in the future, staffing agencies will be forced to think of new ways to evaluate potential candidates beyond traditional methods such as looking at their resume. Closer considerations of personality and fit, evaluating candidates’ soft skills, and weighing career trajectory should all be taken into more serious consideration now. 

Thankfully there are a number of tech tools for applicant tracking that can make the hiring process easy even during this difficult time. 

Here at Timerack, we offer an integrated suite of HR products to support staffing agencies. Get in touch for a free demo today!

Employee Benefits 

The last of our predictions for the future of staffing agencies is that there will be an increased focus on employee benefits. 

These days, staffing agencies can expect job candidates to inquire more about what kind of flexibility a job offers on top of just the salary. Candidates will want health benefits from a job, including perhaps mental health benefits, and will likely be seeking out guaranteed sick pay and annual leave. 

While these new expectations are justified, staffing agency clients will be challenged at a time when budgets are tight and economic conditions are unstable.

Closing Thoughts 

While it may seem like the outlook for the future of staffing companies is all gloom and doom, it’s unlikely that all of the challenges facing the industry will have a negative impact. 

If anything, we predict they will strengthen the staffing industry in order to prepare it for whatever uncertainties may come its way in the future. 

And the truth is, all of the challenges we mentioned can be easily tackled using innovative tech solutions, especially HR products which can optimize and customize hiring processes.



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