Talent Shortages, Unemployment, & What the Gig Economy Means for Staffing

 gig economy | staffing industry | skills gap | credential creep

What’s going on in our labor markets right now? Sure, the official unemployment rate (U-3) is at historical lows… but that number doesn’t include a lot of key populations like the long-term unemployed, the underemployed, and those who have given up on finding work. And why is there an apparent disconnect between companies who are desperately seeking employees to add to their workforce and the employees on a seemingly endless job search?

“We exist in a constant state of disequilibrium. During periods of economic downturn and high unemployment, our talent benches begin to thin, and in the case of some occupations, sometimes empty out entirely. Client satisfaction scores often go south.”

- Richard Wahlquist

So what we can expect in the future? What role will the staffing industry play in this future?

The Main Culprit : The Skills Gap

In short, the skills gap refers to employers seeking candidates with skills that are underrepresented in the labor market. This problem, coupled with credential creep (AKA unrealistic skill set expectations) is widespread. In fact, 95% of business round table CEOs surveyed said that finding talent was problematic. And when finding talent is a challenge, that challenge permeates throughout the whole organization:

Productivity loss: When there are less people working, less output is inevitable.

Stunted Growth: Vacant positions eat up all of the resources previously dedicated to innovation and extra customer support.

Decreased Revenue Potential: Vacant positions mean a smaller sales force and fewer resources to dedicate to ensuring existing customer satisfaction. This could also lead to customer defection.

Increased Turnover: When organizations are understaffed, it places more of a burden on other employees which will inevitably drive some to quit.

The Gig Economy

Is it the problem? or part of the solution?

The term “gig economy” refers to “gigs,” as in freelance/contract/1099 work. The gig economy has been and continues to radically change the face of the business world…. And it’s growing in popularity! It’s expected that by 2020, more than 4 in 10 American workers will regularly serve as participants in the gig economy.

And while some feel that the gig economy will disrupt the staffing industry, I see the gig economy as a real opportunity for recruiters to capitalize on. More “gigs” means more diversified experience… and more diversified experience makes it more probable for recruiters to find that “purple squirrel” for their clients. Plus, it’s not like temporary work is anything new to the staffing industry – we’re the pioneers of temp work.

So…Where should recruiters focus their efforts?

Leverage the ASA Skills Gap Index

What it is: The American Staffing Association, in partnership with Career Builder, created the skills gap index in response to this disconnection between employer expectations and employee experience. Used by economists, journalists, government officials, and staffing firms, the skills gap index identifies the severity of skills shortages along with the hardest to fill occupations in the US. On a scale of 1-100, the skills gap index measures the difficulty to hire within a specific occupation based on demand, candidate supply, and the total population working within that occupation.

How to leverage it as a recruiter: Recruiters are well-aware that some positions require more effort to fill than others… and it’s difficult to communicate that to clients looking to fill a vacancy as quickly as possible. If recruiters leveraged the skills gap index in their client communications, that data-driven approach may lead their clients to adjust their opening offer to candidates in order to make their opportunity more enticing. At the very least, the skills gap index can help manage client expectations on the time frame needed to fill a given role.

Understanding the candidate on a deeper level. 

While salary served as the number one factor in choosing a job in the past, those days are gone. Opinions on what really matters in a given opportunity vary from candidate to candidate. And unless recruiters ask the right kinds of questions, they may never get a clear picture of what’s important to their candidate.

Understanding the company on a deeper level

Culture, purpose, employee development, job security, opportunities for advancement, and recognition for achievements have and will continue to play a larger role in a candidate’s decision process. And unless staffing companies take the time to understand the internal dynamics of their client’s organization, recruiters will be ill-equipped to sell a candidate on a given opportunity.


The future of the staffing industry is at the intersection of humanity and technology.

The future of the staffing industry is about being the human element in an increasingly technological world. A hands-on, personal approach to the recruiting profession is irreplaceable. It leads to a better candidate experience, a better client experience, and a more successful career for recruiters. Technology will shift the day-to-day focus of the staffing industry, to be sure, but we should look at technology for what it is: a tool that frees up more of our time to devote to that human element.

Kate Jacoutot

Spire Workforce Solutions, 5575 Peachtree Dunwoody Road Northeast, Building C, Suite 240, Sandy Springs, GA, 30342, United States