Higher churn rates may be a boon to staffing. “In 2018 we expect to see a continued imbalance between a tight labor supply and fairly robust demand,” says Patrick Beharelle, CEO of TrueBlue. “And with such low unemployment, you tend to see more churn.” Such churn can increase demand for temporary or temporary-to-permanent employees as clients scramble to fill in for departing workers.
A tight talent pool could constrain staffing expansion in 2018. With unemployment near 4 percent as 2017 winds down, the talent supply is a critical concern for the staffing industry. “Shortages are making it harder for staffing firms to grow,” says Asin.
Workers’ leverage is bringing them somewhat larger paychecks. After many years of economic recovery with relatively small hikes in pay, in 2018 the staffing industry and its clients likely will have to accelerate increases in compensation. “We’re starting to see salaries increase where they must,” says Beharelle. Says Asin: “We forecast modest revenue growth of 3 percent for staffing firms in 2018, and a big chunk of that increases in bill rates.”
Industry experience can be an effective draw for talent. Whereas the training of contingent workers was once mainly about learning the tasks of a specific job, it’s now more about learning the industry and its software. Many candidates seek that training.
With talent tight, customer relationships are even more important. Providing top-quality service is critical when the labor market tests the patience of clients, as is likely in 2018. So it’s important to assess how clients feel about your firm. “NetPromoter scores have come to the staffing industries,” says Wahlquist. “We encourage doing this with three groups: candidates and employees, client companies, and internal staffing employees.”
Acts of Congress and the White House—or inaction—are likely to affect staffing activity. With taxes and healthcare the subjects of hot debate in Washington, many sectors of staffing face uncertainty in 2018. For example, “a lot of healthcare staffing is driven by the Affordable Care Act,” says Asin. “If that goes away, a lot of volume for healthcare staffing might disappear.”
Wise staffing firms will keep a closer eye on city and state regs. The White House administration is seeking a major rollback of regulation, so labor advocates are evolving their strategy. Given labor unions’ traditional Democratic affiliation and that the party is out of power in Congress and the White House, labor organizations are bringing their regulatory advocacy to select cities and states instead, Wahlquist says. Staffing firms need to carefully monitor changes in state and local regulations for 2018.
Workers from around the world are still a key resource. Although immigration will continue to be a hot-button issue in 2018, clients are not shying away from using international professionals.
Industry experts believe immigrants with legal status to work will continue to be a key component of the talent supply. “More trade and more immigration are good for the economy overall,” Asin says. “Making it tougher for people to get into the country is bad for staffing. Curbing immigration actually makes it more likely that work gets pushed offshore.”
Says Wahlquist: “What I’ve seen within our business community is a call for calm rationality in making sure that America continues to attract the best and the brightest.”
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