A top priority articulated in Staffing Industry Analyst’s (SIA) annual staffing buyer survey is “reducing/controlling costs” along with “bill rates compared to other suppliers” as top metrics when evaluating staffing supplier performance. Of course, managing costs will always be a core element of CW program strategy and SIA’s most recent research supports that.
There are key, emerging economic trends and market circumstances that can make “reducing/controlling costs” more difficult at times, and in other times, more manageable.
Economic trends and market circumstances can drive imbalances in the “supply and demand” ratio of specific talent markets. We have seen this in the talent requirements for many IT, data scientists and general nursing talent in past. The demand for these skillsets and others outstrip the available supply and cause competitive buying leverage to move away from the buyer community to staffing suppliers. Staffing providers will choose where to place hard to find/quality talent based on profitability. In a tight talent market, CW talent will seek pay rate improvements across a well-informed marketplace. It’s only natural in a truly, functioning free marketplace.
Now, a well-managed and rationalized CW program with true staffing provider partnerships can somewhat buffer the impact of these ebbs and flows of the supply/demand trends in the marketplace based on general annual contracts and other business commitments/incentives. It’s not a complete guard against broad economic shifts, but it can be an effective instrument to withstand myopic responses to short-term, economic changes in a marketplace. But equally important, is to understand CW labor supply trends for the specific markets one operates in and plan for their impact on CW Program performance metrics. Some of this can be positive cost management opportunities and others can be more stressful, budget-wise.
The Great Recession reportedly ended sometime back at the end of CY 2009 and the resultant recovery has continued on to a record length beyond five to six years straight. This recovery has caused predictable, shifts in the “supply/demand” ratio in talent markets creating shortages, and subsequently, increases in some talent market bill rates. Other factors such as long-term education/skillset development initiatives and organizational productivity improvements can impact supply/demand in talent markets, and has overtime, brought down some of the demand pressure in recovering/growing talent marketplaces.
The question that begs to be asked, is what happens now that we are somewhat in uncharted waters and need some visibility on what happens next. One general macro point-of-view is tracking the openings versus hiring data that SIA has sourced from the US Bureau of Labor Statistics. SIA publishes this comparison which simply cross-references the number of openings vs. hiring transactions on a regular basis. Below is the recent historical comparison of this Openings vs. Hiring data. This market “supply/demand” ratio presently indicates that there are generally more job opportunities then available talent. Of course this is a macro view of the overall talent marketplace and more specific market perspectives could reflect different and more precise viewpoints.
The ultimate point is that there are points of view available concerning the competitive imbalances occurring in one’s operating talent marketplaces. The source of that visibility can be the US Bureau of Labor Statistics or data/metrics sourced from one’s MSP/staffing providers or local recruiting team. Change of some kind in talent marketplaces is bound to occur just based on the law of averages. It would be prudent to build a framework to watch for those economic changes in talent markets in order to competitively plan/execute accordingly. It could mean the difference in hitting one’s strategic cost reduction and control targets and goals.