It’s that time again, at the start of every new year, industry analysts stare into their crystal balls and inundate us with predictions for the year to come. The staffing industry is no different and what digital transformation means for the staffing industry in 2020 seems to be a hot topic of discussion. Instead of adding our own predictions to the already seemingly overwhelming plethora of predictions out there, this article hopes to shift through some of the more common predictions and try to see if there is some type of throughline between them all.
First, what do we mean when we say “digital transformation?” Deloitte’s definition is pretty on the mark. For them, “Digital transformation is all about becoming a digital enterprise — an organization that uses technology to continuously evolve all aspects of its business models (what it offers, how it interacts with customers and how it operates). In simple terms, digital transformation is how to futureproof a business.” So now looking to the industry, what seem to be the most important steps to “futureproof” staffing companies in 2020? The agenda for Staffing Tech 2020 provides some good insights. Chatbots, machine learning, automation, and the ultimate “uberization” of staffing feature prevalently. Looking outside of Staffing Tech, Human Resources Today also lists automation as a top trend for staffing in 2020 and Chris Dwyer in Staffing.com goes even as far as to write that 2020 will be a tipping point for digital staffing where automation and on-demand models will be key. These are only just a handful of examples but the trend is clear, automation and machine learning through features like chatbots, on-demand models, etc.
Freelancing on the Rise
Yes, automation and chatbots can be cost and time saving for staffing companies, but there must be something deeper driving these trends. Perhaps one of the causes behind this drive for automation and machine learning is the need to streamline the recruitment process to make it more attractive to tech-savvy and freelance driven Millennials and Gen Z-ers. An UpWork 2019 survey found that freelancing is becoming a more viable career option for these generations. Gone are the days where temporary work or freelancing were the options of last resort for job seekers. Now they are becoming the first choice when many of the upcoming generations are planning their career path. This alone is a huge development but in terms of digital transformation, staffing industries will need to make their process as appealing as possible for this workforce. Since their decision to look for temporary work is a choice rather than a necessity, this new freelance workforce will have much higher expectations of their staffing experience. Because they are not driven by desperation, they may have a lot less patience for processes that take, what to them, seem like an eternity, or are filled with redundancies (like uploading their resume to a system only to need to manually input all of the same information again). Especially with the debut of on-demand everything, this workforce has grown accustomed to instant gratification. Automation, chatbots, and machine learning can help staffing compete for these workers by allowing them to significantly speed up their entire operation. Staffing companies that don’t utilize this technology risk being abandoned as new generations opt instead for other companies that are more efficient and less of a hassle. For this reason, one of the motivations behind all digital transformation for staffing companies in 2020 should be appealing to this growing workforce and attract younger workers to their platforms.
In an interview with Patrick Beharelle, CEO at TrueBlue, he recognized that one of the benefits of their digitalization strategy is that job seekers “can proactively book jobs through a mobile app anywhere, 24/7, versus going to a branch early in the morning or waiting for a text or call.” With the freelancing and gig economy growing bigger every year, technologies that allow one’s workforce to find a job on-demand will become the new norm.
Opening New Markets
In this interview, Beharelle points to another possible motivation driving the popularity of chatbots, automation and machine learning:
“Staffing companies today are somewhat rigid in terms of how they engage clients. For example, most staffing companies have a minimum of a four-hour shift because the economics don’t work as well if people work one, two, or three hours. Say you have a restaurant. Following the lunch run, there are a whole bunch of dishes that need to get washed and ready for the dinner period. If it only takes two hours to get the dishes washed and dried, you’re not going to want to hire a contingent laborer to work for four hours. You make do with the resources you have. But, if you could fill that need with a two-hour shift, suddenly it makes economic sense for that restaurant to engage a contingent laborer to come in and do the dishes for two hours and then leave. That’s an example of a pie expanding outcome that I think ultimately is going to happen.”
The implications behind what Beharelle is saying could explain another factor behind the drive towards automation, chatbots and machine learning. As mentioned earlier, yes, these measures will cut costs, but more importantly, they may cut the cost of filling a job/shift sufficiently that now the types of shifts that Beharelle mentions (short, two-hour shifts for example) may suddenly become profitable for staffing companies to fill. This could open a previously untapped market for staffing companies. Jobs and shifts that may not have made economic sense for these companies to fill previously now could suddenly be a lucrative new market for them to tap into. Now digital transformation like chatbots, automation, and machine learning are not just cost-cutting measures, but they can be utilized to cut costs so that the business can expand into new markets.
So the questions staffing companies should be asking themselves are not as simple as “Should we implement a chatbot?” or “What processes should we automate?” But rather, “How can we make our job seeker experience quicker and more efficient for our workforce to attract gig minded workers?” And “How can we tap into and make profitable the one-off client or shorter shift staffing?” There are numerous ways one could imagine these technologies being leveraged in response to these two questions. Chatbots and automations that make the entire process of applying for a job take only a matter of moments, where the only recruiter involvement is an evaluation or interview of already vetted candidates. Or chatbots and automations for clients that completely take human intervention out of the process of matching pre-vetted candidates to a job, thereby reducing the time and resource cost of filling shorter shifts. Implementing new technology for the sake of implementing new technology is never an effective business strategy. There must be a reason driving this implementation. Otherwise, there will be no measure of success. There must be an objective behind these new technologies. Knowing what could potentially be the reasons behind the digital transformations we’re going to see in staffing in 2020 will help us remain ahead of the curve and think of creative ways to utilize these new technologies.
On-Demand is the New Norm
At Wolf we are already asking ourselves these questions. And we know that these trends are going to mean more competition for us. We anticipate that in 2020 many of the features of our platform that make us unique may become more commonplace. We welcome these new trends as a challenge for us to continue to improve our already existing chatbot, automation, and self-service capabilities and are excited about where the industry is going. We truly are in the moment of a digital revolution for staffing. There are countless new technologies just begging to be incorporated.
2020 and Staffing
How can these technologies be leveraged so that staffing companies can tap into both the growing freelancer workforce and the market for gigs and short shifts? Our guess is that in 2020 we will see various attempts by staffing companies to respond to these questions with new technologies and the ones that are the most innovative in applying these solutions will be the most successful.