Digital transformation, the process of leveraging innovative technology to transform your business, is not a new idea to the staffing and recruitment industry.
In 2019, 80 percent said digital transformation was a good thing for the industry. Yet, for years, there has been a disconnect between the acknowledgment of digital transformation as a necessity and firms actually taking the actions needed to make it a reality. However, 2020 may have been a turning point. Our survey of 2,000 global and staffing and recruitment professionals reveals a dramatic rise in the adoption of digital transformation processes, expedited by COVID-19 and its aftermath.
What Does Digital Transformation Mean to Recruitment Professionals?
Digital transformation is a three-pronged journey that combines the digitization of huge volumes of data with automation and, eventually, artificial intelligence to unlock new levels of productivity and truly transform the way businesses operate across their respective sales, recruiting, and operations functions.
But what does it mean to staffing and recruitment professionals in particular? The last year has seen a shift in what people talk about when they talk about digital transformation. Automation was and is the process respondents most associate with transforming their business through technology. This is no surprise, as automation represents an immediate and actionable way to transform your business. In 2021, for the first time, the majority of businesses are now automating at least one recruitment process.
AI and machine learning, which represent the exciting future of digital transformation, also remain top of mind. The biggest jump belongs to digitization. Respondents are more than three times as likely to associate digitization as the primary benefit of digital transformation than they were a year ago. As cloud-based software increasingly becomes the industry standard, respondents are less likely to view it as a part of their digital transformation strategy.
|What Does Digital Transformation Mean to You? (2020 Results)|
|AI and Machine Learning||18%|
|All Other Choices||24%|
|What does Digital Transformation Mean to You? (2021 Results)|
|AI and Machine Learning||14%|
|All Other Choices||31%|
Of course, while these are the actions that facilitate the digital transformation of a business, a fully-realized strategy is about much more than any individual technology. For firms embracing digital transformation, these processes are often the means to increase productivity, build better relationships, and transform the way they operate.
Why Digital Transformation?
By a large margin, respondents view digital transformation as an effective means to allocate more time to candidate and client relationships. By improving productivity and efficiency, respondents aim to spend more time providing a human touch. Instead of removing humanity from the industry, technology like AI and machine learning represent the best opportunity to reinsert and recenter humanity into the business.
It helps you become more efficient and better examine processes. There are way too many manual and paper-based processes. They’re highly outdated and they can be improved upon.
Automating simple, repetitive tasks to free up time for more human interaction.
Increased efficiency for our recruiters to do the things that require a human touch.
Cost reduction and an ability to spend the saved time doing what humans do best!
We live in a digital world and you must adapt or be left behind.
Ability to keep up or surpass the rest of the industry.
Respondents also cited flexibility and agility as an enormous benefit of a mature digital transformation strategy. Many directly cited COVID-19 as a reminder that businesses must prepare for the unexpected.
The Rise of Digital Transformation Amidst COVID-19
While the perception of digital transformation in the industry has undergone a subtle evolution, the growth of digital transformation within the industry has been dramatic.
Respondents are 72 percent more likely to have a digital transformation process in place now than they did just one year ago. (Forty-three percent of global recruitment firms now have a digital transformation strategy in place, compared to 25 percent at the end of 2019.)
The acceleration of digital transformation in the industry is perhaps most clearly illustrated through the number of businesses automating core recruitment processes. The percentage of firms that have technology in place to help automate sourcing, calendaring, candidate submittal, and screening has doubled in the last year.
Do you have technology in place to help automate this recruitment process?
|Process||% who automated in 2020||% who automate in 2021|
Why has digital transformation (and the adoption of technologies that fuel it) experienced such a radical surge? The answer appears to be unambiguous: COVID-19 has both necessitated and expedited the digital transformation process at firms across regions, company sizes, and functions.
How has COVID-19 and its aftermath changed your approach to digital transformation?
COVID-19 has had a direct impact on respondents' approach to digital transformation. Two-thirds of all respondents reported that COVID-19 directly caused them to adopt or ramp up their digital transformation efforts.
The impact of COVID-19 is even clearer for businesses with a digital transformation strategy in place. Eighty-two percent of respondents that are actively implementing a digital transformation initiative reported that COVID-19 either influenced their decision to begin one or expedited their existing efforts.
(Digital transformation) helps you be prepared for the unknown. Our tech Investment in the prior two years has paid off well during COVID.
How and why has the aftermath of COVID-19 led to the rise of digital transformation in the staffing industry? There are numerous potential explanations, direct and indirect.
One likely factor is the challenging landscape for firms at the peak of COVID-19. At the end of 2020, 42 percent reported that revenue went down compared to 2019. However, that number represents a tremendous rebound from the first half of 2020. in June 2020, two-thirds of respondents reported that revenue decreased compared to the first half of 2019. The promise of improving productivity and efficiency amidst a uniquely challenging environment for firms may have encouraged recruitment leaders to take more proactive approaches in order to transform their business.
Indeed, respondents at recruitment agencies that reported a down year in 2020 are 50 percent more likely to cite the optimization of key processes through digital transformation as a top priority in 2021. It is also possible that respondents that experienced gains in 2021 were more likely to have already optimized those processes. Respondents that automated at least one process were 39 percent more likely to report an increase in revenue in 2020.
Another possible explanation is that COVID-19 has increased the industry’s openness to technology and to change. When asked about the top obstacles preventing digital transformation, respondents overwhelmingly cited resistance to change and unfamiliarity with technology.
What is the biggest obstacle to embracing digital transformation?
Staff that do not view technology as an important business tool!
Current employees that aren’t proficient with modern tech.
There is a real resistance to any change.
Many respondents reported that the aftermath of COVID-19 has forced their teams to embrace change, usually for the better. The near-unanimous adoption of remote technology across the industry has also potentially caused formerly resistant leaders at firms to embrace other forms of technology as well.
Building a Digital Tomorrow
What is the future of digital transformation? As the adoption of automation becomes increasingly widespread, respondents are looking forward to the potential of artificial intelligence and machine learning. Respondents cited advancements in AI as the top trend they’re watching in 2021.
While the recruitment industry is in the middle of a digital transformation renaissance, there’s little to indicate it is a passing fad. As more businesses transform their business through technology, those who abstain may find themselves left behind. Those who embraced digital transformation, on the other hand, will find themselves well-equipped to handle any unexpected challenges the future holds.