Automation, Digitalization Give Staffing Firms a Boost

Technology tools such as automation and broader digitalization efforts are helping staffing firms stay competitive and boost revenues, although the majority are still in the early stages of implementation efforts.

These were among the results of a survey by Bullhorn, which found that although more than three quarters (77%) of staffing firms have begun implementing a digital transformation strategy, many are still in the early stages.

The report indicated that automation could play a crucial role in helping staffing firms improve their performance — especially when it comes to administrative tasks. However, just 17% of survey respondents said they "heavily leverage" automation throughout their business.

Related: HR Adopts Automation to Meet Hiring Goals, Reduce Manual Paperwork

Tapping automation technology saves time and increases efficiency, leaving firms to focus more on high-value activities where the "human touch" is most important, like one-to-one candidate engagement and business development. 

How Automation Improves Candidate Experience

Automation can also improve the candidate experience, giving recruiters the ability to respond faster and deliver personalized communications at scale.

In previous research, Bullhorn had observed a strong relationship between a slow and unresponsive hiring process and the rate of "application abandonment" amongst promising candidates.

Keefner-Bullhorn

"Modern technology can help make recruitment processes faster and more efficient, so agencies can fill positions more quickly and meet their clients' needs — not to mention that more clients now expect agencies to use technology in their services, from AI-powered candidate matching to automated scheduling," explained Gretchen Keefner, senior vice president of global enterprise at Bullhorn.

She cautioned that if these agencies don't keep up with advances in recruitment technology, they risk falling behind their competitors and losing clients to more tech-savvy firms.

"We are already seeing this play out in the market," she added, noting the potential for digitization is huge.

Keefner explained that it can have a positive impact in virtually every aspect of the end-to-end recruitment lifecycle, from sourcing and engagement through to data management and the often-forgotten back-office tasks that are so important to a recruiter's overall productivity.

"Let's not forget that digitization can also play a vital role in boosting the operations, sales, and finance functions within a staffing firm, enabling them to do better business, faster," she said.

Related: Remote Work Demands Accentuate Strategic Shift in Role of HR

One of the standout results is that only 30% of placements come from repeat talent, indicating that many recruiters are not making full use of their existing candidate databases and are starting from scratch every time they receive a new job requisition, she said.

"This leads to a higher time-to-fill and cost-per-placement," Keefner said. "A surprising number still use manual databases and work with outdated data, making re-engaging previous contacts a real struggle."

If recruiters embrace automation and improve their data hygiene, they can quickly and more easily re-engage with their talent communities to source potential candidates at a fraction of the time and cost, she said.

The research also indicates there is a particularly big opportunity for firms to digitize their data, with more profitable firms twice as likely to have done it.

"Doing so would enable more sophisticated use of automation and AI as well as data insights to power decision-making across both candidate and client-related activities," Keefner said.

Because major technology change impacts almost every person within a business, it's important that executive leadership, IT, operations teams, and end users all get involved as key stakeholders.

"From a talent and client experience perspective, marketing is especially key, and we are now seeing more CMOs involved in technology decisions and implementations than ever before," she said.

Keefner explained that executive leadership must also be willing to invest in new technologies and provide the necessary resources and support for their implementation.

What Role Does IT Play?

Meanwhile, IT plays a crucial role in ensuring that new technologies are implemented and integrated effectively, and that continuous support is available to help end users fully exploit the new technologies.

From Keefner's perspective, AI and machine learning will only have a larger role in staffing and recruitment as the technology improves and becomes more accessible.

"It's worth bearing in mind that it is a very broad discipline and there are dozens of potential use cases for recruitment — everything from intelligent candidate matching and resume parsing to chatbots and generative AI," she said.

While some staffing firms are already taking their first steps into AI and ML, others are yet to act.

"The key is understanding howand whya staffing firm would want to use AI by mapping potential use cases to business objectives," Keefner said. "One of the risks is investing too heavily too quickly in AI without having a clear strategy in place."