As the staffing industry becomes increasingly competitive, differentiation has become a critical factor, particularly for those operating in the frontline segment.
At Hunar.AI, we've spoken with over 100 staffing companies across various industries and sizes, gaining valuable insights. We've identified strategies to help companies stand out and succeed in this challenging environment of service commoditization and rising operational costs. Here's a summary:
Streamlined Payroll Processing & Compliances
The adoption of software solutions for automating payroll generation has helped in payroll processing and compliance management for staffing businesses. By leveraging HRMS/Payroll technologies, staffing agencies have been able to significantly increase payroll throughput per HR-back office resource, resulting in an increase in billable employees without having to expand HR back-office operations. This trend is expected to continue as the industry continues to benefit from the increasing penetration of these technologies, paving the way for more streamlined and cost-efficient payroll management.
Sourcing & Talent Acquisition Strategies
The recruitment operations, including both field and centralised recruitment, have become the biggest cost base for staffing agencies, with sourcing and follow-on processes experiencing an exponential increase in recruitment costs. Factors contributing to this trend include rising payroll costs for recruiters, increasing cost of relevant job boards, and a decline in throughput per recruiter per month. These challenges are only set to worsen over time, with reducing information arbitrage in frontline talent, skill demand-supply mismatches in skill, low job standardisation, and negative wage growth in core industries leading to attrition. Even the emergence of new industries and new worker engagement models will exacerbate these issues.
Technology is needed to improve recruiter throughput and create differentiation in competitive staffing agencies. Traditional ATS systems are ineffective, especially for frontline workforce ecosystems, given the lack of standardisation in candidate data and slow information movement between entities, and heavy engagement with candidates in a short period. A multi-channel sourcing platform, focused on an unified candidate ecosystem, that drives engagement, uses quick pre-assessments to enhance funnel relevance, leverages contextual relevance, automates recruiter effort, and makes sourcing operations more data-rich to reduce reliance on external channels is urgently needed to address these challenges.
While these ideas are not exhaustive, they are an excellent starting point for driving efficiency and differentiation in the recruitment process for staffing agencies.
The rising demand for verified candidates is increasing the cost of worker onboarding for frontline talent acquisition agencies. However, the true cost of onboarding goes beyond verification, including the time and resources required for document collection and processing such as Aadhar, E-Courts and Driving License, as well as the delay between hiring and joining, which can result in a drop-off rate of 30%. Technology advancements such as NLP techniques and smartphone adoption enable on-the-spot onboarding and digitization initiatives by the government , reducing expenses by at least 50% and promoting cost-effectiveness. Fully compliant and verified onboarding with complete employer visibility on day one provides a significant advantage. Fully compliant and verified onboarding with complete employer visibility on day one creates a significant advantage for staffing agencies.
Business Operations & Marketing
Efficiency in business development and marketing is an essential component for staffing agencies to achieve success in their operations. I don't have a lot of exposure to this and hence would not cover this topic in depth here. But the presentation of the existing candidate ecosystem can be one powerful tool for business development teams. A collection of candidate profiles, with information extraction through NLP techniques, showcases capabilities and specialisation to customers. Staffing agencies serve as important workforce partners for employers, playing a critical role in India's workforce ecosystem. It is in the employer's best interest to have efficient and growing staffing partners. Technology adoption is essential for staffing agencies to increase productivity in their business operations and become more effective in their role while optimising the workforce supply chain.
At Hunar.AI aspire to learn more about the staffing ecosystem in India and would like to engage in deeper conversations with operators in India's workforce ecosystem