HOW COVID-19 AFFECTED THE RECRUITMENT SECTOR

The global economy has taken a significant hit due to Covid-19, and it is only after 2009 that the world is witnessing an economic slump at a global level. Small scale industries to big manufacturing industries have been affected in some way or the other, and the impact has been purely financial.

While small industries struggled to keep their production line active, big industries that depend more on global imports and exports broke down due to the impacts of Covid-19.

Of all the resources most affected by the pandemic is the human resource. In the last two years, the Covid outbreak has taken more lives of personnel in the line of duty in various product and service sectors.

The economic crash is evident because the recruitment industry itself reported a downfall in hiring manpower in major sectors by almost 50% since November 2019. Consequently, the domino effect of the pandemic has affected all the levels of any organization from top to bottom.

Recruitment agencies worldwide have also reported a sudden paradigm shift, with companies now focusing on work-from-home rather than opening offices. Although in April 2021, many major firms were pondering over opening the offices by the end of August 2021, even that seems a long shot currently.

Global Recruitment Sector: Impact on revenue

The global recruitment sector was nearly a USD 498 billion industry (by revenue) in 2019. The Covid-19 pandemic forced a revenue loss by 16% in 2020 in the staffing sector. One should understand that the growth of 10% is still expected in 2021; there are still companies facing the challenge of re-staffing or re-recruiting after the pandemic has ended.

Although the end is not in sight yet, major recruiters are still unsure of the future with the advent of new regional variants of the virus.

In 2020, the US staffing industry alone took a hit of USD 32 billion due to the Covid-19 pandemic. It disrupted the local, regional and international staffing programs, RPOs disbanded midway, and the recruiters had to call off their personnel in the middle of interviews as soon as the pandemic broke out.

By 2019, the industry reported a revenue gain of nearly USD 152 billion, which went down by almost 21% within a few months.

Challenges of the RPO companies

With half of the world's human resources inside their homes, companies are forced to change how recruiting is done. The freedom of reaching out to suitable candidates through a face to face interview process has diminished drastically. With companies focusing on work-from-home staff more than anything else now, recruiters find it quite challenging to find the right individuals with the right skill set to qualify for the recruitment.

Major companies like Randstad, PeopleScout, ManpowerGroup, etc. that provide RPO services in the USA have cumulatively reported a decline in online job vacancies by 50% by June 2021.

The demand for personnel is quite sporadic rather than linear, with the mitigation and containment measures in place. While the healthcare and logistics sector showed increased demand for workforce, the hospitality industry (travel, tourism, hotels, and related areas) showed a sudden slump in staffing requirements.

Technology companies that base their products and services on technology focused their recruitment on people who were comfortable working in the home environment for a long period.

Future Global Trends

A report by SIA (Staffing Industry Analysts) shows that even after a decline of 11% in revenue, the global recruitment industry is set to grow by 12% by the end of 2021. The industry is expected to reach USD 445 billion marks in the post-Covid era. The report considers the analysis of early November 2019 and the performance of the last quarter of the year 2020.

While the hopes of growth are high, many regions are still facing the threat of evolved virus strain, which is bound to impact the overall economic conditions.

In 2020, the top five countries reporting the highest revenue in the staffing sector were:

1. The USA at 31%

2. Japan at 15%

3. The United Kingdom at 9%

4. Germany at 5%

5. The Netherlands at 5%

Conclusion

Major companies working in the major industrial and service sector rely on staffing or recruitment agencies that find the right individuals for the right job. Recruitment process outsourcing in USA had been introduced keeping in view the time and financial aspect of the whole hiring process. Companies no longer have to dedicate a large chunk of their resources to hire personnel.

The Covid-19 pandemic has affected one and all, and the current trends in the recruitment sector look promising after the slump witnessed last year. Overall, recruiters are hoping for normal operations in the coming months, which should improve the job sector immensely.