Spotlight

COVID-19 Impact Survey: Key Findings

At the beginning of the year, we surveyed thousands of global staffing and recruitment professionals to discover their challenges, priorities, and predictions for the year ahead.

Heading into 2020, respondents expressed some concern about the future of the economy but were hugely optimistic about the outlook for their own business. Challenges and priorities centered on candidates: the talent shortage was the number one challenge by a landslide, and candidate acquisition was the number one priority. Leaders nearly unanimously agreed that technological innovation was the only way forward for staffing success.

Then everything changed. Over the course of several months, COVID-19 directly and indirectly altered the outlook of the staffing industry and the world at large in profound and in numerous ways. Many recruitment professionals are in a dramatically different situation than they were at the beginning of the year.

Where does the industry stand now? What has changed and what hasn’t? How do leaders and practitioners feel about their businesses and the economy and where are they prioritizing their efforts? More than 800 global respondents shared their thoughts; here are the top findings:

Economic Impact and Expectations

Understandably, much of the conversation around the COVID-19 impact has centered on its financial ramifications for the industry and the economy as a whole. While the findings certainly reflect economic hardship, a sizable number of respondents expressed some optimism about the future.

Staffing Company Performance

The good news: thirty percent of staffing and recruiting professionals report that their businesses are doing better than or as well as they were at this time last year.

The bad news: 28 percent of respondents reported that their bottom line was down by at least 30 percent. Forty-five percent of respondents specializing in hospitality and travel belong to this group. In regards 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).

Spotlight by Sector

Sector Better or the Same Worse By More than 30%
Healthcare 32% 19%
IT / Technical 31% 17%
Engineering 29% 23%
Consulting 29% 24%
Finance and Accounting 28% 30%
Light Industrial 27% 34%
Hospitality / Travel 24% 45%
Legal 24% 32%
Tech / Media / Telecom 22% 24%
Office / Clerical 20% 34%
Marketing / Creative 27% 34%

 

The sectors a staffing company serves has had a telling impact on its performance since the beginning of COVID-19. Even the highest-performing sectors haven’t seen an increase in performance—just 15 percent of the top performing group, healthcare staffing professionals, reported higher performance than this time last year—but when it comes to avoiding losses, the sector a business serves matters.

Healthcare and IT staffing agencies were the most likely to observe stable performance and the least likely to suffer dramatic losses. Hospitality staffing agencies were the most likely to suffer dramatic losses, while clerical and marketing agencies were the most likely to see a moderate dip in performance. 

The sector an agency serves didn’t significantly impact their predictions for the future of their business or the economy, suggesting that even struggling agencies believe things will improve.

Spotlight: Recruitment Professionals Speak Out

While the current situation is unfortunate for the lives and health of many, there will be firms that emerge from this stronger than they went in.

Respondent, COVID-19 Impact Survey

Sales have been ZERO due to everything being dropped. This has devastated our business!

Respondent, COVID-19 Impact Survey

We are a small firm and have been lucky with the business we have secured during this time. I think clients appreciate the personal boutique service more than ever.

Respondent, COVID-19 Impact Survey

While many industries are suffering, we have an exponential increase in business with some of our retail customers. Not only are they continuing to operate but they're actually pushing ahead, adding more funding and generally thriving.

Respondent, COVID-19 Impact Survey

Internal Employee Retention

Staffing companies, like many other businesses, have had to reduce the number of internal employees as a result of COVID-19, but just how commonplace are these cuts? Almost half of businesses have conducted layoffs.

Has your company reduced internal employees (including furloughs)?
Yes 48%
No 42%
No, but we plan to in the next few months 3%

 

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.

When it comes to the severity of the layoffs and furloughs, there’s no one common pattern; agencies are making both small and large reductions. Predictably, agencies that reported the greatest loss in business were the most likely to make larger-scale cuts.

Economic Outlook

The majority of respondents believe that we’ve moved past the peak of COVID-19’s economic disruption, and that the economy will improve this year, and roughly one-quarter 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 nine percent expect the recovery process to start in the second half of 2021 or later.

Business as usual?

While it’s clear that recruitment professionals have had to tweak how they approach their businesses, not everything has changed. 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.

What’s a top priority of yours for the rest of the year?
Improving management of client relationships 45%
Engaging candidates/improving the candidate experience 36%
Managing cash/controlling spend 34%
Optimizing remote work 34%
Employment brand development and marketing 34%
Automating and optimizing key processes 25%
Reassessing business models 22%
Internal staff training and development 21%
Reskilling workers due to the changing nature of jobs 13%
Other (please specify) 11%

 

So what has changed? Controlling spend (36 percent) and optimizing remote work (34 percent) are now top of mind for respondents, while neither goal registered as top priorities going into the year. One-fifth of respondents also reported that they’re reassessing their business model. Agencies are entertaining a large number of options when it comes to reimaging their business model, from the sectors they serve to the services they offer. In particular, agencies have reported a growing demand for consultancy services, as employers look to staffing agencies for guidance in navigating the current landscape.

Customer Challenges: New and Old

Customer relationships are the top priority for respondents, but in order to win and retain clients, agencies are forced to navigate a broad range of obstacles.

What are the top customer-related challenges have you faced since the beginning of the COVID-19 crisis?
Reduction in job reqs 81%
Increased difficulty in winning new customers 55%
Lack of communication from clients 38%
Shifting or challenging job reqs 32%
Clients are unable to make payments 21%
Reduced internal resources to maintain existing client relationships 13%
Increased client churn 10%

 

While the financial health of staffing businesses and their clients loom large, notably, the most severe consequences of hardship—clients failing to make payments and agencies losing the resources to maintain client relationships—land on the bottom of customer-related challenges.

Although most agencies aren’t reporting a huge loss of clients, they are seeing job orders from existing clients shrink in volume. But volume isn’t the only problem; a third of respondents say the job reqs they do receive are more challenging than in the past. Making matters worse, respondents report more communication issues from clients, likely as employers deal with other COVID-related priorities.

After diminishing job reqs, the top customer-related challenge is winning new business. What factors impact a firm’s ability to acquire new clients?

Respondents agree: hiring freezes are the culprit, doubling every other challenge combined. Because staffing agencies otherwise feel confident about their prospect of winning new clients, businesses would be well advised to maintain existing relationships and proactively reach out to prospects in order to build a pipeline for when hiring freezes thaw.

The Remote World of Recruiting

Before COVID-19, a number of agencies operated remotely, but remote adoption wasn’t widespread throughout the industry. Now that most agencies have introduced or expedited remote strategies into their business model, what changes do respondents expect to be permanent?

How will remote work and recruiting change post-COVID-19?
Remote jobs will be more common 64%
Contactless (remote) recruiting will be more prevalent 57%
Remote onboarding will be more common 41%
We will use less office space as a staffing firm due to permanent increase in remote work 32%

 

Respondents generally believe that the impacts of remote work are here to stay. From office operations (32%) to onboarding (41%) to recruiting candidates entirely remotely (57%), many aspects of the industry may see long-term shifts as a result of “the great remote experiment.” However, respondents predict that the largest consequence will be one that their clients make: hiring for more remote roles.

 

A Remote Possibility: Newly Remote Roles

Over the last several months, recruiters have hired candidates for remote work in a variety of jobs, many of which were conventionally believed to be impossible in a remote setting. 

jobs-covid

What jobs or roles have you seen shift to remote work since the COVID-19 crisis that you would not have anticipated could transition to remote work?

 

 

When respondents were asked to name the newly remote roles that surprised them, the most “everything” came in as the most popular answer. Respondents shared a diverse and surprising list of roles they had placed for remote positions, including lab-based scientists, defense work, sign-language interpreting, and even positions at airports. 

Most of the roles we recruit for would have been office-based—this has all changed now. Even people managing huge teams are doing so remotely.

Respondent, COVID-19 Impact Survey

The most popular roles to see an unexpected transition from an office or on-site setting include engineers, accountants, and managers. Several respondents noted that the development has been most helpful in broadening employers’ expectations for what roles can be remote. Generally, sentiment on the transition to remote roles was positive among respondents.

I'm a firm believer in remote working, so there isn't a single job out there that can't be remote in my opinion.

Respondent, COVID-19 Impact Survey

Recruitment Technology on the Rise

Agencies are responding to the new landscape by investing in and utilizing recruitment technology, both in predictable and less obvious ways.

Unsurprisingly, video interviewing and video conferencing solutions have seen the largest spike in activity, with a near-universal (91 percent) adoption uptick by staffing and recruitment companies. Video conferencing 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 a rise in adoption may reflect a reignited 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 AI. With a thinner margin for error than in the past, automating time-consuming manual tasks and freeing up time and resources has never been more important.

Key Takeaways:

The impact of COVID-19 on staffing and recruitment companies has been profound but optimism and opportunity remains within the industry. While respondents expect permanent changes to the industry, such as the rise of remote jobs, the industry is still fundamentally about people, and the top priorities for firms—improving client and candidate engagement—demonstrate that the path to success is through relationships. 

What does the future hold? We’re cautiously optimistic that we are observing a gradual incline toward normalcy. As businesses reopen and look forward, we’ll be keeping an eye on key factors that impact industry performance and key indicators of the economy and business performance. How will reopening impact the economy and staffing firms in particular? Will cases continue to decline and will the summer impact transmissions as some experts have predicted? We’ll be paying close attention and sharing the results with you.

Bob McHugh

Senior Content Marketing Manager

Bullhorn

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.