The unemployment rate is at an all-time low since the financial crisis in 2008. This is great news for the overall economy, but it also introduces a new challenge for recruiting professionals. With millions of jobs currently unfilled, there is a war for talent across all positions. For example, there are over three million jobs posted on Indeed that are waiting to be filled. Manpower’s recent research supports this, as one in three employers have difficulty filling jobs.
It may seem that there is a shortage of available workers in the job market. However, this picture is missing an important factor: underemployment. Currently, there are almost 30 million underemployed people who are looking for work for multiple reasons: companies using more part-time/contingent workers or workers wanting more flexibility. That’s an astoundingly high number. For the recruiting industry, this means that there’s a huge, untapped talent pool for recruiting professionals. In order to access this pool, though, recruiters must shift their mindset and approach.
Here are three key trends that can help recruiters reframe the existing practice.
- Simplicity and speed matters
Let’s admit it. The traditional recruiting process is frustrating for both recruiters and candidates. It’s estimated that the average hiring process takes 23 days. For hiring part-time and contingent workers, the traditional practice would require significant resources and time.
The alternate method is lean recruiting, which puts candidates into a few days of a temporary real-world job setting to see how they perform. This way, while employers observe candidates’ performance, candidates can also earn extra income along the way and experience whether the job is the right fit. For example, many logistics companies have benefited from this “try before you buy” method by bringing in a large pool of candidates based on the streamlined application/onboarding process, observing how they perform for a week, and making the hiring decision. This, in turn, helped companies significantly reduce time-to-fill, as well as employee turnover.
- The most untapped workforce is right in front of you
An increasing number of companies across various industry verticals are transitioning their labor models to bring in more part-time workers. As a result, many workers have to constantly look for additional part-time jobs to supplement their incomes. Sometimes, in their search, if a part-time worker finds a better opportunity elsewhere, they will leave their current job immediately, resulting in the employer scrambling to find another worker.
You can break this vicious cycle by sharing underutilized workers across different functions, roles and locations within your company. To illustrate this, consider a large retail company that has successfully executed this concept. (* Disclaimer: My company, Wonolo, is currently working with this customer under a confidentiality agreement, and as such, I do not have permission to disclose the name of the company.)
Previously, the company felt that they never had sufficient frontline workers, such as cashiers, stocking associates and customer support representatives to meet surges in demand. Then, the company noticed that many of their part-time workers were specialized in just one function, and even though they had availability, they could not be called in to fill the role without the right specialization.
The solution was to cross-train their workers in various adjacent functions, thereby empowering their workers to pick up different jobs. Moreover, the company allowed different stores within a certain geographic region to tap into underutilized workers at other stores if there was an unpredicted demand for staffing. Different stores then started sharing their part-time worker pool. As a result, the company saw a reduction in hiring costs and employee turnover.
- Flexibility is the name of the game
One of the fastest-growing workforce segments is freelancers. Intuit’s research forecasts that 7.6 million people are expected to participate in the gig economy by 2020. Devon Black, a freelancer via on-demand staffing platform Wonolo, finds that the most appealing aspect is “the flexibility of working when, where and for who we choose. It takes a lot of the stress out of working and allows you to work according to your own terms.” As a result, 95 percent of companies now regard this new workforce as a key resource in their businesses. So, what does this mean for recruiting professionals?
Traditional job boards, staffing companies and HR software are not optimized for attracting, recruiting, onboarding and managing part-time and contingent workers. To address these pain points, there have been a plethora of companies entering the market. These new solutions can help you source target candidates with specific skill sets and availability, navigate through the complexity around worker classification (1099 vs. W-2), and manage HR administrative functions around payroll and insurance. Understanding the ecosystem of these vendors can be a huge advantage for recruiters in accessing the contingent workforce.
In brief, the way that people find and define work has changed, and it’s time for recruiters to adapt along with it. By following the three trends identified here, recruiting professionals can tap into the great promise of the contingent workforce, delivering exceptional value to companies and workers alike.