2020 Predictions for Recruiting Technology: Opportunities in Data Privacy, Tech Stack Simplification, and the Economy
The greatest constant in technology is change, which makes it, and the possibilities these changes open up, exciting for the recruiting industry. While there are several categories of technology change that recruiters should watch out for in the coming year and beyond, I have identified three topics in particular that will help define 2020 for the staffing industry.
Industry leaders are getting ahead of compliance and data security regulations
On January 1, 2020, the California Consumer Privacy Act, or CCPA, went into effect. Much like the GDPR in the European Union, CCPA was passed to give consumers, this time in the state of California, enhanced consumer protection and privacy rights regarding how their data is collected and used online. Because of the nature of the Internet and business in general, the effect, of course, is not limited to California businesses; anyone doing business with – or potentially doing business with – people inside the state need to be compliant, and that is, basically, every company with a web site.
We have already seen forward-thinking recruiting companies are not limiting their data privacy strategy to GDPR and CCPA. These companies are leading the issue, updating their processes and compliance across all markets – not just California and the European Union – to get ahead of the inevitable legislation in other states and regions. The best companies in the market don’t follow- they lead, and those who do so in 2020 will be among those leaders.
Staffing firms will simplify their tech stack and leverage open technologies
Recruiters draw on a variety of technologies to power the entire recruiting lifecycle, from sourcing candidates and job matching, to communications and onboarding, to invoicing, payroll, and benefits, and beyond. Traditionally, agencies have relied on cobbling together disparate solutions that do not talk to each other, are difficult to use, and costly to implement and maintain.
Staffing firms will increasingly look for solutions to build on a central platform, and simplify their tech stack by leveraging open technology to easily build a unique solution, differentiating from competitors and solving their business needs. Using open solutions to build the tech stack gives recruiting firms flexibility to pivot into new markets they might not otherwise be prepared to enter, while helping them grow and prosper.
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Staffing agencies who invest during a recession will emerge stronger
The most frequent word to pop up in any 2020 business prediction is “recession.” Fears of a downturn have only increased from year to year, despite the continued strength of the economy as 2020 began. One predictable effect on the recruiting industry is that freelance and temporary work will see cutbacks as companies prepare to tighten their belts, particularly as temporary staffing affords companies greater flexibility in managing the size of their workforce through uncertainty.
However, lean times bring with them an opportunity – an opportunity to move ahead of the competition when the economy inevitably recovers. In a study published in the Harvard Business Review, just after the end of the Great Recession in 2010, researchers found that out of 4,700 companies studied, only 9 percent came out of the downturn with high growth. What made these companies stand out was the investment these companies made during the downturn itself, defying the temptation to slash all budgets. Chief among the investments was technology; digital transformation helped automate many processes and increased operational efficiency. The resulting reduction in process complexity made companies more agile and innovative, and led to accelerated growth opportunities far ahead of companies who did not.
In the case of recruiting firms, such technology investment improves processes including sourcing and tracking talent, and automating communications, to name just a few. Whenever a recession actually does take place, it will be staffing agencies who invest in their organization throughout the downtimes that will emerge as the winners when the rebound comes.
Regardless of the macroeconomic conditions as the year rolls on, these are but three of the leading trends we see happening in the recruiting industry, as 2020 promises to be an eventful year – and a fruitful one for staffing firms who want to lead the industry.
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