The quotes by some of the staffing industry leaders are a boost for everyone who has their fingers crossed for the state of industry in the coming year. So as promised, we are here to discuss some of the challenges that might be faced by the staffing industry in the coming year.

One of the biggest challenges among all the hype of recovery of the economy is that the recovery is going to be very slow. The recovery won’t be complete, simply because the boom that tailed recession was not a real one!! So organizations will be confused through out the year about hiring. They will be wary of what happened in the past, and they won’t be ready to take chances. By the end of the year, we should see a significant rise in hiring, but it will be a stiff battle between the “hiring managers” and the recruiters. The recruiters might still face the “fussy” managers, which was the case through the year 2009.

One thing I have noticed a lot in the market is that there are people who are over-qualified for the jobs that are out there. I met a friend this week who had several years of experience in IT, but was ready to work for small sum just because he was jobless. It remains to be seen how industry will reinstate these people into jobs that they deserve to do.

The number of people currently out of work is large. The unemployment taxes are rising, and it can directly affect the margins for the staffing industry. Staffing companies need to communicate this to the organizations, other there could be significant restructuring in the margin amounts, which we saw as it happened after the previous recession. More and more companies want to keep the costs low, hence are asking for more services at the same cost. Staffing companies have to make sure that the margins don’t slip.

Another challenge would be the restrictions surrounding H1B visas. Time has come that the government understands that “world is flat”, and organization are rejecting candidates with H1B. We don’t yet know how the problem will be circumvented, but it has to be taken care of for sure.

Nobody likes uncertainty, and that is going to be the biggest hurdle this year. From companies to staffing agencies to employers, everybody is unsure about what is going to happen. Efforts have to be put in to instill some kind of homeostasis in the state of affairs.

In the next post, we will discuss some of the trends that will rule the roost this year. A happy birthday to Martin Luther King, have a good weekend.

No comments yet.

Comments RSS TrackBack Identifier URI

You must be logged in to post a comment.