As client sophistication has grown alongside rapid advances in technology, staffing firms have begun to invest in many new categories within the workforce solutions ecosystem — and most particularly in digital innovation.
Service offerings have expanded in recent years beyond temporary staffing and direct hire. And while staffing firms have often provided services such as payrolling, outplacement and recruitment process outsourcing, many are now actively broadening their services to incorporate new, innovative digital solutions or to improve their own internal processes, according to the “Investing in the Workforce Solutions Ecosystem [1],” report published this month by Staffing Industry Analysts.
Globally, staffing firms have made more than 200 investments in or acquisitions of companies that don’t provide staffing but are still in the workforce solutions ecosystem, according to the SIA research. The most popular category was “talent acquisition technology” with 36% of acquisitions made in this space. It was followed with 27% of acquisitions in “other workforce solutions,” which includes a range of different services such as consulting, training and outplacement.
The research report focuses on investment initiatives of three of the largest firms: Randstad, The Adecco Group and Recruit.
- The Randstad Innovation Fund’s investments include recruitment chatbots AllyO and Wade & Wendy as well as HackerRank, a recruitment platform/code challenge community. The fund has also funded an initiative in France to fund its own chatbot, called Randy.
- Adecco Group X acquired skills training platform General Assembly [2] and online staffing platform Vettery [3]. It also launched its own online staffing platforms including Yoss and Adia. It has also invested in recruitment chatbot Mya.
- Recruit Strategic Partners has invested in a number of firms and has a broader business portfolio beyond staffing; over four years, it has invested in more than 90 businesses. Its investments include ScoreData, which focuses on candidate matching, and Veem, a payrolling provider that uses blockchain. Recruit also recently made its acquisition of Glassdoor through its Indeed operations.
Buyers of staffing services should be aware of the varied developments in the workforce solutions ecosystem especially the bets that their vendors are making on technology. Are your suppliers or MSP keeping you and your program up to date on the best-in-class solutions? They should be bringing the latest trends to your program and advising you on how to move forward to adopt or not certain tools ensuring that your CW program stays competitive.
“We can expect such investments to continue as advancements in technology, such as artificial intelligence, will continue to improve existing products and open up new categories of products,” the report states. “As staffing firms seek a competitive advantage and a point of differentiation from their competitors, creating and integrating the most effective technology stack will prove a testing battle ground over the coming years.”
SIA members can access the full report, “Investing in the Workforce Solutions Ecosystem [1],” online.