July 9, 2020

Bullhorn Surveyed 800 Recruiters. Here Are Their Predictions for the Second Half of 2020.


As we enter the second half of 2020, the beginning of the year already feels like a distant memory. So much has changed so quickly, and one might assume the priorities and challenges for staffing and recruiting businesses today are worlds apart from what they were just six months ago.

While there’s no doubt that the landscape has changed dramatically, the industry is still all about people. In that sense, many of the core challenges, priorities, and pathways to success remain unchanged.

To determine the full impact of the COVID-19 crisis on staffing and recruiting professionals, as well as their outlooks going forward, Bullhorn surveyed more than 800 professionals at the end of May. Here are some of the top findings.

The Financial Impact of COVID-19 on Staffing

It’s clear that COVID-19 has dramatically altered the industry, but exactly how have its effects manifested? Understandably, much of the conversation has centered on the financial ramifications for the industry and the economy as a whole. While our findings certainly reflect economic hardship, a sizable number of respondents also expressed some optimism about the future.

First, the good — and perhaps surprising — news: Nearly one-third of staffing and recruiting professionals report that business performance has improved or remained the same compared to this time last year.

The bad news: 28 percent of respondents reported a severe dip in performance, with revenue decreases of at least 30 percent. Naturally, the staffing industry contains a variety of businesses, and the type of staffing business, sectors of specialization, and region all contributed to performance over this time. Firms specializing in hospitality and travel were hit particularly hard, with 45 percent reporting severe losses. In regard to staffing type, permanent staffing agencies were far more likely than their contract and temporary staffing counterparts to report a major decrease in business (42 percent compared to 24 percent).

Staffing Businesses Hit Hard by Layoffs and Furloughs

Staffing companies, like many other businesses, have had to reduce their internal workforces as a result of COVID-19. In fact, almost half of all staffing businesses have conducted layoffs.

Interestingly, permanent placement agencies are the most likely to have retained all staff (49 percent, compared to 40 percent of temp and contract agencies), even though they are also the most likely to have seen a decrease in performance.

Of course, company size also plays a role. The smallest businesses (1-10 salespeople and recruiters combined) were twice as likely (54 percent) to retain their entire team than the largest businesses (28 percent).

On a global scale, UK businesses represented a stark contrast to their international peers: 82 percent of UK businesses laid off at least some of their workforce. In North America, by comparison, 46 percent of businesses have laid off or furloughed employees.

Priorities and Challenges: What Has Changed and What Hasn’t

At the beginning of the year, Bullhorn surveyed more than 2,000 staffing professionals to discover their top priorities and challenges for the year ahead. Predictably, many of those priorities have shifted. For example, 77 percent of respondents cited the talent shortage as their top hiring challenge at the beginning of the year, making it the top challenge by a landslide. Now, it doesn’t register as a top challenge at all.

While staffing companies may face new challenges, their top priorities have barely budged. At its core, the staffing industry is about relationships — with candidates, clients, and peers — and those relationships still determine staffing success. Going into 2020, staffing professionals said that managing candidate and client relationships were the top areas they needed to focus on, and they remain top priorities now. The biggest shift: Candidate and client relationships have swapped places as the top two priorities for staffing companies. Client relationships are now the No. 1 priority, with 45 percent of respondents citing it as a top focus for the remainder of the year.

Candidate relationships, the No. 2 priority for the remainder of the year, are still essential to staffing business success. While unemployment has reduced or erased the talent shortages in many markets and recruiters have had to change their outreach strategies accordingly, candidates are still at the heart of any staffing business.

Controlling spend (36 percent) and optimizing remote work (34 percent) are now top of mind for respondents, while neither goal registered as a top priority going into the year. One-fifth of respondents also reported reassessing their business models. Agencies are entertaining a number of options when it comes to reimagining their businesses, from serving new sectors to changing up their service offerings. In particular, agencies have reported a growing demand for consultancy services as employers look to staffing agencies for guidance in navigating the current landscape.

Looking Forward: Staffing Businesses Say the Worst Is Behind Us

The majority of respondents believe we’ve moved past the peak of COVID-19’s economic disruption and that the economy will improve this year. Roughly one-quarter of respondents expect things to pick up in the next three months. Business performance during the pandemic had no impact on this outlook: Respondents who have seen an improvement in revenue and those who were hit the hardest were equally likely to expect the economy to improve. Notably, very few respondents predict a sustained recession or depression. Just 9 percent expect the recovery process to start in the second half of 2021 or later.

Agencies are responding to the new landscape by investing in and utilizing recruitment technology, in both predictable and less obvious ways. Unsurprisingly, video interviewing and videoconferencing solutions have seen the largest spikes in activity, with a near-universal (91 percent) adoption uptick by staffing and recruitment companies. Videoconferencing also falls into a larger trend: Agencies are increasingly leveraging tools that facilitate communication and relationship-building with candidates, clients, and internal teams. VoIP (25 percent) and SMS (24 percent) reflect this new emphasis on flexible modes of communication.

The other technology solutions to see increasing adoption may reflect a need to make better use of limited resources. More than a quarter of agencies have ramped up their use of analytics since the rise of COVID-19, presumably to better understand their performance and make smart decisions about where to invest future resources. Respondents also reported an increase in the use of automation and artificial intelligence. With a thinner margin for error than in the past, automating time-consuming manual tasks to free up resources has never been more important.

What lies ahead for staffing and recruiting companies? We’re cautiously optimistic that we are observing a gradual incline toward normalcy for the industry. As businesses reopen, we’ll keep an eye on key factors that impact industry performance. How will reopening impact the economy overall and staffing firms in particular? With the volume of new cases varying dramatically from state to state and country to country, will region play a bigger role in business performance? It’s tough to say right now, but we’ll continue to monitor the situation closely.

Bob McHugh is the senior content marketing manager at Bullhorn.

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Bob McHugh is the senior content marketing manager at Bullhorn. Before joining Bullhorn, Bob spent five years at the digital marketing agency Brafton as a social media and engagement manager. He earned his bachelor's degree from Siena College and his MFA in writing from Emerson College.