In our last chapter, we discussed the evolution of the staffing industry that affected the industry's yesterday, today, and future. Staffing challenges are common in all industries; however, today, we will discuss the IT industry's staffing challenges.
IT is one of the most significant fields globally that is growing exponentially. According to a report by Staffing Industry Forecast, the US temporary staffing industry will grow by 11% in 2021. In addition, enterprises are becoming more reliant on a contingent workforce due to increased business and digital demands.
However, the biggest struggle is in the IT industry with how the temporary workforce model fits within and how they can evaluate and select the best industry fit to meet the business demands. With a constant talent requirement in the IT industry, temporary staffing helps businesses fill positions within the company for a short period.
Key Challenges Faced By The IT Industry
- Due to IT talent shortage, IT industries are struggling to fit the contingent workforce to meet the business needs.
- The temporary staff is supported with different attributes and value propositions and hired from different service providers creating miscommunication between the staffing industry and organization.
- Also, enterprises don't follow a structured methodology to identify and select the workforce, resulting in ad hoc selections and rapid dissatisfaction of employees.
- Although filling these positions may be for a day or a couple of weeks, IT firms face a few obstacles to hiring these talents.
Staffing Agencies Are More Like Resume Passers
According to Gartner, 30% of application services will be delivered by online gig work platforms by 2023; whereas, 35% of every country's labor pool will use gig work platforms, thereby radically transforming the organization's staffing process.
Although the unemployment rate in the IT industry is meager, the demand outweighs the talent at the disposal, isn't up to the mark. However, limited access to the talent pool is the predominant factor limiting the hiring capabilities of hiring managers. The example will better understand.
Suppose Company A wants to hire a temporary software developer for six months. Company A will share the requirement details with one vendor management system (VMS) and share the candidate's salary for their work. The VMS then searches for the right candidate, which takes a couple of weeks- say 2-3 weeks. However, it is more likely that these VMS also approaches other Vendor managers to find the right fit. Thus the chain continues, and the average hiring takes 38 days. With more and more vendor management systems coming in between, each of them shares the margin; thus, the payout of the candidate decreases. Finally, the candidate doesn't get paid what he deserves.
On average, 20% of IT employers rely on temporary staffing services. The above example shows how staffing firms only think about the profit rather than understanding the need for the appropriate temporary workers. They are acting more like resume passers. Therefore, it has become one of the primary challenges of the IT firms to recruit and retain appropriate temp employees to fill sabbaticals.
Resume Padding Because Of Reactive Hiring
With the constant demand for temp workers in the IT industry, resume padding is common. In a study done by HireRight of 1,818 companies, 69 percent of hiring managers reported catching job candidates lying on their resumes.
Different IT employers offering specific compensation packages has become a challenge for these IT firms as applicants desperate for work may lie about skills and experience, hoping to put them on a higher pay scale. Thus, it is giving birth to reactive recruitment. The method often puts unnecessary time pressure on sourcing suitable candidates for a replacement or new team member.
Depending on the level of the vacancy and the required experience and skills, resume padding due to reactive hiring is time-consuming. It almost takes 6 to 12 weeks, from advertising the vacancy to making an offer that's accepted. The process of reactive hiring can quickly leave a vacancy standing open for 16 weeks. Sometimes the situation can get so bad that IT firms have to appoint a temporary contractor at a shocking price. Also, competitors are paying a tad bit extra to these applicants; IT firms are hit worst with this number game to hire a talented pool for their business.
Lack of Quality and Transparency
Both recruiters and hiring managers should work for the same goal in a company but with different talent acquisition strategies. Lack of quality and transparency between recruiters and hiring managers can cause many problems that may lead to failure in identifying the right candidate with the desired skill set.
In the traditional recruiting process, hiring managers spend most of their time chasing every candidate, evaluating and qualifying them. This tedious and inefficient process also results in losing high-skilled candidates and turns out indecisive.
Also, more and more vendor management between the hiring company and talent gives birth to profit margins, cutting down the payout of the candidate, which the hiring companies share.
If you fail to leverage recruitment data and metrics in the current technology-driven market, you may lose a chance to nurture potential candidates actively looking for a job.
Finding talents isn't what it was a few years ago in the IT industry. As more and more organizations turn to the temporary staffing model, the staffing industry is faced with the challenges of working with these non-traditional laborers. Their needs are far different from the traditional full-time employee, and staffing agencies play a significant role in managing those needs.
2021 and beyond, IT firms must focus on identifying the perfect candidate to improve job retention and erasing employees' shortage. Thus, temporary staffing agencies must look beyond employees' resumes to glean critical details before hiring.
Content Writer, Aviskaran Technologies