Staffing firms are adapting to the COVID-19 pandemic economy

As peak hiring ramps up, companies are adjusting strategies

November 9, 2020

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Written by Stephanie Hegarty

I lead a team with 30 years of combined experience working within the staffing industry, and it’s clear to us that nothing has come close to the impact of COVID-19. As in so many other industries, hiring abruptly tanked, to put it bluntly. However, as we learn to live with this disease and businesses figure out their new normal, the pendulum is swinging in the other direction. Today we’re entering peak hiring season and companies are relying on temporary workers to get them through. Here, I’ll share what peak hiring looks like during a pandemic economy and offer first-hand insight into how our top staffing clients are adapting and thriving during this unprecedented time.

First, let’s talk about the numbers. The most recent statistics from bls.gov show that temporary help services added 8,100 jobs in September 2020; however, that number is down from prior months when more than 100,000 jobs were added each month. Yet, the more frequently updated American Staffing Association Index reflects an upswing, showing that staffing employment for the second full week in October grew by 2 percent over the prior week. According to the ASA, that’s the largest week-to-week increase for the comparative week since the start of the index in 2006. Also, new starts have grown for five straight weeks and nearly half of staffing companies are gaining new weekly assignments.

In short, the industry is slowly gaining speed as we push into peak holiday hiring season. Companies are nervously watching as the COVID-19 pandemic continues to unfold and impacts their ability to hire and retain full-time employees. This means they will likely rely on temporary help from staffing agencies more than ever before to help buoy their operations as they navigate this extended period of uncertainty.

So, how are staffing firms adjusting their business during this year’s peak hiring season? To find out, we recently posed a few key questions to a handful of our top staffing clients who serve a range of industries across the country and around the world. Here’s what they said.

  • Teleworking. It seems the majority of staffing employees are working from home these days. Half of the firms we polled said 100 percent of their employees are currently working from home, temporarily. They’re not sure about how long or if it will be a permanent arrangement. Another global staffing firm indicated that while it’s not 100 percent remote, more of its employees are working from home than ever before. Interestingly, its clients are also adopting work-from-home policies for temp workers, and they’re increasingly flexible with related contractual changes. Unlike the other staffing firms, this international company says teleworking will be a permanent change moving forward.

On the flip side, another client that largely serves the retail industry has brought 75 percent of its workforce back in the office on a rotating hybrid schedule to handle a surge in demand as the holiday shopping season approaches.

  • Resource optimization. When it comes to doing more with less, only a couple of firms initially downsized at the start of the pandemic, but now they’re ramping up staff. Others either retained existing staff levels or increased hiring to keep pace with demand. However, nearly all have either already centralized their operations in one way or another, or they’re in the process of centralizing, as a way of optimizing resources and efficiency moving forward.

For example, one healthcare staffing company is broadly focused on consolidating its teams, services and vendors. Another regional staffing firm is centralizing specific tasks such as using one person to manage sick pay for traveling nurses, bringing the offer letter process in-house under one person and consolidating its drug testing and background check processes with one vendor, First Advantage. Yet another retail-focused staffing firm is centralizing onboarding from its recruitment team—about 25 people with multiple responsibilities—to a more specialized, six-person onboarding team.

  • Growth industries. Here’s where it gets interesting. Tech jobs, healthcare and retail are booming, as expected. But within healthcare, our clients are seeing upticks in new positions such as “temperature takers,” COVID-testing, return-to-work assessors and flu clinic staffing. Within retail, they’re seeing increased demand for grocery store employees and distribution center workers. It makes sense, given the pandemic, but it’s an interesting trend nonetheless.

Other notable niches include increased hiring in areas of government, unemployment and election services. While election services may soon subside, the other two categories will likely remain steady for a while as the pandemic grinds on.

  • During this strange time of social distancing and quarantines, it can be difficult to connect and engage with candidates and employees on a personal level. You might’ve guessed it, but virtual video calls are the modus operandi these days for nearly all the companies we interviewed. Video streaming services such Zoom are being used for everything from basic onboarding and candidate orientation to virtual small group lunches and coffee chats.

Another common thread among our staffing clients is increasing the frequency of candidate engagement throughout the pre- and post-hire process. Some are scheduling multiple video calls, while others are using email, webinars, instant messaging and old-fashioned phone calls to stay connected with candidates. Another firm sends care packages, mailing branded items such as coffee mugs, mouse pads, etc. to the candidate’s home address.

As we cautiously move forward over the next 12-24 months, staffing companies are clearly taking steps to intelligently adjust their strategies and operations to meet the new, fluctuating hiring demands of today’s pandemic economy. At First Advantage, we’re here to help. Our specialized team of staffing experts and services are dedicated to helping you fill more positions faster so you can grow your business, and ultimately, your bottom line.

Stephanie Hegarty leads the Staffing, BPO and Call Center Customer Success team at First Advantage. She has 10+ years of experience partnering with customers, across a wide range of industries, to identify pain points and deliver innovative solutions that yield results.

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