As the world around us continues to change, the future of recruitment is evolving before our eyes. The gig economy is emerging as a dominant force in the recruitment sector, with it en route to becoming one of the largest recruitment marketplaces in developed Western economies in the five next years. At AER Temp, we are even more ambitious in our outlook, believing that it will be the leading recruitment marketplace worldwide by the end of the next decade.
The Gig Economy: A Diverse Workforce
The gig economy, a term often associated with gig workers like food delivery drivers and freelancers, is actually an all-encompassing concept. It stretches across the entire employment spectrum, from college students zipping through city streets delivering steaming pizzas, to consultants orchestrating global projects for multinational corporations. In the United States, many major companies are projecting that up to 30% of their workforce will consist of gig workers within the next five years. Notably, economists have gone a step further, predicting that over 50% of the entire U.S. workforce will soon be classified as gig workers.
A Shift in the Industry
Evidently, the gig economy is rewriting the rules of employment. Companies like EY are now developing their own gig economy platforms to meet the surging demand for contingent labor without relying on traditional recruitment agencies. Even heavyweight gig economy players like Uber have started to make their way into the industrial temp markets through platforms like Uber Works, embracing a business-to-business model. Workers, too, are evolving. Many of them are not just employees but suppliers to the gig economy, a concept that resonates with those who have grown up in an era where gig work is the norm.
Impact on Traditional Recruitment Agencies
As the gig economy steadily captures a larger share of the recruitment market, traditional recruitment models are facing challenges. The once dependable 10 to 15% permanent placement fees are becoming increasingly scarce. The complex processes involved in managing contractors, locums, and various agency workers are losing relevance. Clients are now inclined to engage contractors through their own platforms, and agencies find themselves competing for gig work at diminishing profit margins. This shift poses a formidable threat to traditional recruitment agencies, but it also presents an opportunity for agile agencies willing to adapt to a changing world and market.
Secure Your Agency’s Future
In conclusion, the rise of the gig economy is inevitable, and its impact on the recruitment industry is already visible. Traditional agencies need to rethink their strategies to remain relevant in this evolving landscape. One proactive step is to establish a dedicated “Gig Economy Desk” within your agency, equipped to cater to the specific needs of gig workers and clients. At AER Temp, we’re here to guide you through this transition. Take the first step towards securing your recruitment agency’s future by booking an AER Temp demo today.
