Staffing buyers are not immune to the turmoil caused by the Covid-19 pandemic — and neither are their talent suppliers. And learning how, and to what extent, suppliers have been affected makes for a more educated contingent workforce buyer. This is important as education validates your actions, helping you prepare for talent acquisition challenges while making you a better partner.
SIA recently published its May 2020 Pulse Survey Report, which captures April’s performance of participating staffing firms and the impact of Covid-19 across US staffing segments. The survey is a useful tool to help the contingent workforce buyer understand the supplier’s environment.
Being an educated buyer “is an absolute benefit to your organization and your CW Program,” says Dawn McCartney, VP of the Contingent Workforce Strategies Council at SIA. “It gives you more knowledge to push back on certain things or, more importantly, can help you educate internal stakeholders on market trends or challenges.”
It also makes you a better partner — more empathetic — to your providers, enabling you to say, “I know things are rough right now, I know your biz is taking a hit.” This sensitivity goes a long way with providers at any time, but especially amid Covid-19.
Many staffing firms are taking a hit. In the May report, survey respondents reported a median 18% year-over-year decline in their US temporary staffing revenue in April, a further decrease from March’s decline of 5%.
The segments reporting the biggest declines were the industrial segment, down a median 32% year over year, and office/clerical, down 25%.
On a brighter note, the travel nurse segment reported the strongest growth in April, up a median 10% year over year; the locum tenens and life sciences segments were the only other segments showing positive expansion, up 5% and 4% respectively.
The May report also provides information on sales and recruiting difficulty, which can provide a glimpse into what competition for talent acquisition may look like. The Pulse Report found a net 73% of staffing firms reported a decreasing trend in new orders over the last three months; however, a net 42% expect an increasing trend in the next six months. Reflecting the pandemic, average sales difficulty increased further to 4.01 from 3.78 in March (on a scale from one to five). Average recruiting difficulty declined slightly from 3.18 to 3.12.
In addition, the survey asked about bill rates. A net 73% of firms reported a decreasing trend in new orders over the last three months, but a net 42% expect an increasing trend in the next six months.
Challenges: In their words
In this special edition of its Pulse Survey Report, SIA asked staffing providers about the biggest challenge they are facing. Seventy-seven firms provided responses to the open-ended question.
Not surprisingly, 40 staffing firms in the survey noted that clients had either put hiring on hold or cancelled jobs. This reduction in client demand is by far the greatest challenge reported by the staffing companies in the survey. Nevertheless, staffing firms noted a wide variety of responses to the disruption in demand.
In addition, 11 out of 35 commercial staffing firms, or 31%, noted the headwind of trying to recruit temporary workers in an environment where workers can currently collect an additional $600 per week in federal unemployment benefits.
Buyers may not realize the details of the challenges that suppliers are going through. “Especially as a buyer, you are focused on what you are doing for your organization and how the organization is being impacted,” McCartney says. “But it’s only right to know how your staffing partners are being impacted and what challenges they are worried about. This also helps you be more prepared.” And once providers and their clients are on the same page, problems can be overcome in an easier fashion that is good for the business.
The data for the most recent report was collected in April from 126 staffing companies. CWS Council members can download the May Pulse Survey Selected Findings report here. The survey is normally conducted bimonthly, and typically focuses on revenue and other financial data. Due to the Covid-19 crisis, its frequency was increased to monthly.