Top Staffing and Recruiting Trends for 2021

What do staffing and recruiting professionals care about in 2021? More than 2,100 industry professionals worldwide weighed in with their thoughts on the top priorities, challenges, and staffing trends that will be top of mind in the coming year.

There are so many compelling findings to share, we couldn’t possibly fit them all into one article. You can explore the top staffing and recruiting trends in detail on the Global Recruitment Insights and Data (GRID) site. Find everything you want to know about staffing and recruiting in the year ahead in one easy place.

• Want to explore an in-depth overview of top staffing industry trends? Visit the key findings. 
• Want to see a visual representation of the top trends? Check out these downloadable slides.

Discover Top Staffing and Recruiting Trends for 2021 at the GRID

We’ve curated some of the top staffing trends and takeaways from the GRID site here. Read on below for some of the top insights from this year’s survey.

Staffing industry outlook: good things ahead?

2020 was a challenging roller-coaster year for staffing and recruitment firms (and the world). Going into 2020, 71 percent of firms expected revenue to increase over the last year. However, due to the enormous impact of COVID-19, by June of 2020, two-thirds of firms reported their revenue had decreased from the year ahead. Businesses then saw an uptick in demand and performance in the second half of 2020, with only(!) 43 percent of firms reporting a decrease in revenue for 2020 by the year’s end and an equal number reporting an increase in revenue.

Respondents are largely optimistic about their performance expectations for 2021, perhaps as a result of their strong finish to 2020. Seventy-one percent of respondents expect revenue to increase in 2021, and one-fifth of respondents expect revenue to increase by more than 25 percent. Contract/SOW firms have the most positive outlook (75% expect revenue to increase), while 70 percent of temp and perm placement respondents reported expected gains in the year ahead. The size of the company made no difference in revenue expectations.

Top priorities for staffing firms in 2021

While the industry underwent a lot of change in 2020, the top three priorities for staffing and recruitment businesses remain the same for 2021: it’s all about candidates and clients. Candidates and clients account for four of the top five priorities. The biggest debut of the year is optimizing remote work, a top ten-priority that wasn’t on the radar heading into the year.

• Candidate Acquisition (54%)
  • Candidate acquisition is again the top priority for staffing firms in 2021. This is perhaps related to the continued existence of the talent shortage (55% say there’s still a talent shortage) despite high unemployment rates.
• Winning new clients (45%)
  • Respondents who reported a down year in 2020 were 1.5 times more likely to cite winning new business as a priority than their counterparts who reported an increase in revenue. The UK is the only region with respondents that placed winning new business as their top priority overall, ahead of candidate acquisition. UK respondents were also the most likely to report a decrease in revenue in 2020.
• Candidate Engagement (30%)
  • Notably, firms are markedly more interested in placing candidates than they are in engaging with them. Given the value of redeploying workers and the importance of a firm’s reputation to attract candidates, agencies that put all their efforts into placing candidates at the expense of providing a good experience risk damaging their candidate acquisition efforts in the long run.
• Employer Branding (22%)
  • While investing in marketing leadership can be expensive, a cohesive marketing vision is incredibly beneficial to the long term success of a firm. Small firms were more than twice as likely to cite branding as a top priority for 2021 than their larger counterparts.
• Client Relationships (19%)
  • In a people-centric industry like staffing, it should come as no surprise that improving client relationships is a top priority for most staffing firms. Respondents cited a lack of communication as the third-biggest challenge with existing customers, behind only a reduction in job reqs and an increase in challenging job reqs.

Top recruiting challenges for 2021

Respondents were asked to cite their top hiring challenges, operational challenges, and macroeconomic challenges for the year ahead. Economic uncertainty and the skills shortage headline the top challenges facing staffing and recruitment agencies in 2020.

• Skills shortage (49%)
  • The skills shortage is once again the top challenge for 2020, and respondents seem even more concerned than they were last year. Seventy-seven percent of respondents cited it as the top hiring challenge, compared to 73 percent from last year.
• Pricing Pressure (29%)
  • Recruitment professionals are feeling the crunch from increased competition and shrinking margins. Various factors contribute to this challenge: varying temporary wages (including the upward pressure on wages), worker’s comp, state unemployment insurance and other benefit costs, and direct expenses, such as administrative fees to a VMS.
• Economic Uncertainty (28%)
  • While the overall global economy remained strong in 2019 and a recession remains a fear rather than a reality at the start of 2020, staffing firms overwhelmingly name uncertainty over the economy as their top challenge (64 percent). C-level executives are even more cautious (75 percent).

Top staffing trends to watch in 2021

What are some of the emerging trends to pay attention to in 2021? Here are some of the top themes from this year’s report.

• The impact of COVID-19 on the labor market
  • Respondents cited the unemployment rate as the largest impact of COVID-19 on the industry in 2021. Additionally, 63 percent of respondents cited COVID-19’s effects on the labor market as a top challenge for 2021, making it the top challenge overall. However, the majority (55%) still believe there is a talent shortage, and 44 percent said it was a top challenge for the year. Staffing professionals cited hiring freezes as the top obstacle to winning new customers.
• Remote work is here to stay
  • Respondents picked the increase in remote jobs as the single-most consequential impact of COVID-19 on the industry (56%) and the increase in remote recruiting (33%) as the most significant impact on how their firm will operate. Thirty percent of respondents say their business will operate entirely remotely in 2021, and 15 percent plan to operate entirely remotely permanently.
• Staffing firms haven’t figured out technology adoption.
  • Just 13 percent of respondents report full adoption of their staffing technology. This has gone down (18% last year), suggesting remote workplaces have had a possible effect on adoption. The top reason for poor adoption? Limited training resources (29%).

Interested in learning more about the challenges, opportunities, and ideas that will shape the staffing industry in the year ahead? There’s so much more waiting for you at the Global Recruitment Insights and Data site, like key findings broken down by region and resources designed to help you be a trendsetter like free PowerPoint slides.