Any recruitment business can run into similar challenges. We’ve collected the top 10 issues you’re likely to face as an agency, plus tips on how to face them.
At Vincere, we’ve seen agencies rise above these problems with the right game plan. Knowing the top issues in the recruitment industry will be the first step to creating your winning strategy.
With some of the points below, you can fine-tune your agency’s approach. Find out how to craft an exceptional business strategy for 2023 and beyond.
Top 10 recruitment challenges of 2023 - and solutions
1. Talent shortages
One of the first problems you’ve likely faced as a recruiter: roles to fill, but not the right talent for the job.
Management consultant firm Korn Ferry’s The Future of Work report predicts a shortage of more than 85 million skilled workers by 2030. As demand for labor outstrips supply, major economies around the world will struggle with a “talent crunch.”
For recruiters, the talent crunch will lead to intense pressure to find fewer highly-skilled candidates. With an ever-growing pool of retirees and fewer qualified people to replace them, agencies will have to work hard to find the right talent.
To beat talent shortages, recruiters must attract passive candidates. Finding those who aren't on an active job hunt will get the right people in those hard-to-place roles.
Find what motivates these candidates and create outreach campaigns to match their interests. And get ready to compete with other agencies that might also be reaching out too.
If you’re looking for a differentiator for your outreach (and feeling brave), consider video for recruitment.
2. Candidate burnout
A study by Gallup reported that 23% of employees feel exhausted at work “very often” or “always,” with an extra 44% at “sometimes.” These are staggering numbers. And they’re likely to get worse in the near term, with continuing fallout from the pandemic taking its toll.
One way to lower the risk of burnout is finding the best fit candidates for a role. When candidates fit the job there’s less strain on them, and then a better chance of sticking it out with the company.
If you’re running a high-volume Temp agency, remember redeployment rates. Candidates who are happy to work another placement with your agency will save time and money on recruiting new talent. This is where role fit counts too.
Another way to manage burnout is to set realistic expectations for your applicants. If they get support during the hiring process and know what they’re getting into, the placement should work out well.
3. Placing bad hires
According to the Harvard Business Review, the average organization wastes $25,000 per year on bad hires. Sloppy processes and paperwork on your agency’s part can lead to this, which costs your clients big time. And when clients lack an in-house recruiting team but hesitate to use agency services, you might end up looking at a hiring freeze.
Focus on streamlining and automating as much of the onboarding process as possible. It’s a waste of time to ask consultants to pick through every unqualified CV. Instead, use AI and parsing to take the wrong candidates out of the running early.
Also, try mining your ATS for candidates with the right profiles. Whenever a candidate gets rejected for a role, that doesn’t mean they’re a bad fit for every other job. Make sure that consultants regularly check back into the database for hidden gems.
4. Poor applicant screening processes
In a survey by CareerBuilder, 58% of hiring managers found that a candidate had lied on their resume. Recruiters will agree that CV fibs are common, and need to be caught to stop a bad hire.
But when recruitment agencies have vast talent pools to sort through, it’s tough to catch everything. That’s why it's important to focus on the most important skills and qualifications for a role - and to use an applicant tracking system (ATS) to help you weed out the unqualified candidates.
5. Personal bias in recruitment
It's no secret that personal bias can creep into the hiring process. Many recruitment agencies struggle to attract diverse candidates due to unconscious biases.
One study in the Harvard Business Review asked companies to rate potential candidates. For STEM talent, women and minority candidates needed a 0.25 higher GPA to get the same rating of a white male candidate.
Bias is a hidden but impactful barrier that modern recruitment firms shouldn’t tolerate. One way to prevent this staffing issue is by using recruitment tools for blind hiring.
Examples might be a tool that blanks out demographic information on resumes, or an anonymous skills test that can rank candidates based on their performance.
It’s also important to practice DE&I inside your recruitment agency. Without different perspectives on the hiring process, you’ll just get the same old results.
6. Increasing candidate engagement
Right now there’s tough competition for attracting talent, and candidates are well aware of it. In a study by LinkedIn, 49% of respondents said they would not accept a job offer if they were not engaged throughout the process. This can be difficult for recruiters, who have more candidate profiles to track than ever and need to keep engaged from start to finish.
The best way to do this is to keep candidates updated on the status of their applications, provide feedback after each interview, and give them a clear timeline of when they can expect to hear back.
Consultants can also increase candidate engagement by automating outreach and onboarding. The onboarding process can be much simpler for candidates with a self-serve candidate portal.
7. Improving candidate experience
In a survey conducted by Deloitte, just 6% of candidates thought their organization’s recruitment process used the best technology available. In other words, the vast majority of candidates are not having their expectations met.
To optimize the candidate experience in recruitment, we recommend that recruiters use data to tailor the process to each individual. This means understanding their needs, wants, and motivations - and then using that information to create a personalized candidate journey.
In our experience hearing from recruiters, most candidates want similar things:
- Efficient job application process and interview stages
- More communication with their recruiter
- Transparency about the role & hiring process
It’s important to keep candidates informed at every stage of the process. Otherwise, you’ll miss out on good people who felt left behind.
8. Candidate expectations on turnaround time
In today's fast-paced world, candidates expect an immediate response to their job applications. According to one survey by CareerBuilder, 82% of applicants want a timeline for the hiring process, as well as frequent updates. To meet expectations, recruiters need to be on top of responding to candidates.
One way to do this is using an automated system that can immediately notify you when an applicant submits their information.
And be sure to follow up with each candidate within 24 hours, even if it's just to say that you're reviewing their application. Every little check-in helps with transparency.
9. Making the best use of data analytics
Data analytics has proven to be a challenge for more "classic" headhunters. Not everyone has the skills or resources to use data wisely.
But in a hypercompetitive, digital-first fight for talent, there's no getting away from it. Without using data analytics to make informed decisions, it’s harder to objectively measure business performance. Everything from new investments to performance reviews depends on knowing the numbers.
Consider working with a software vendor that gives the necessary tools and resources to improve your analytics suite.
10. Navigating the gig economy
The rise of the gig economy has created more opportunities for short-term or contract work. A global survey by ManPower Group found that 45% of all candidates prefer something other than full-time roles.
But recruiting short-term workers isn’t so simple. If your agency focuses on Temp and Contract recruiting, then fighting high candidate churn rates, market unpredictability, and the time investment of finding the right talent can all take a toll.
For Temp and Contract staffing agencies, consider software to manage availability search and high-volume shift scheduling. Streamlining from the start will make your work a little easier.
Using Vincere's staffing software to address recruitment challenges
These are just a few of the top recruitment challenges that staffing agencies will face in 2023 and beyond. You might research some of the latest recruitment trends to help you reinvent your process on candidate engagement. And with the right tools and strategies in place, agencies can thrive no matter the circumstances.
Looking for a new recruitment technology platform?
Vincere is the software solution for ambitious recruitment agencies around the world. We’ve created a module-based platform that offers everything from data analytics to high-volume shift scheduling to a powerful core CRM/ATS.
Our platform, the Recruitment Operating System, was designed with recruiters’ workflows in mind. There’s something on offer for the front, middle and back offices. Everything about the RecOS is meant to help recruitment agencies win.
Take your recruitment agency to the next level
Reach out to our team to learn more about our staffing software.
