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May 13, 2020

In a very short time, the Coronavirus disease of 2019, or COVID-19 as it’s popularly called, has changed the world as we knew it. The staffing industry, like most other sectors, is severely impacted and is staring at its first yearly revenue decline in more than a decade. The extent of the slump is expected to be in excess of 20% in some business segments, according to this forecast by global advisory firm Staffing Industry Analysts.

The impact of COVID-19 on the staffing industry

Like most other industries, the staffing sector is ‘working-from-home.’ Recruitment processes, most of which require physical interactions, are being performed remotely. However, the fact that the staffing industry has its origin in the adversities of the post-World War economy, gives a sense of optimism across the board. In this climate, organizations need to re-kindle their innovation and rise to the COVID-19 challenge for sustaining this setback. Before looking at how it can be done, let us examine the impact – the upside and downside – in brief, and the problem areas that need to be addressed.

Expected to be transitory, this phase of lockdowns and mobility restrictions has an adverse impact on the staffing industry:

  • Rising workforce turnover: Workforce turnover has risen at an unprecedented rate due to the fear of contracting the disease and general mobility restrictions.
  • Abrupt shift in demand: Partial or full closure across countries has led to an abrupt fall in workforce demand in most sectors while there is a sudden spike in some verticals like healthcare and logistics.
  • Job-oriented market: There has been a sharp transition from a candidate-driven market, where best candidates could choose from a plethora of offers, to a job-oriented market, where candidates would need to adapt their skills as per available open positions.
  • New COVID-19 regulations: New regulatory regime to protect the rights of workers and safeguard their interests enforces additional compliance requirements.


At the same time, new opportunities have emerged for staffing companies:

  • Millions of new jobs are opening up, mostly for essential workers.
  • E-commerce sales have witnessed an increase of more than 70%, and hence, the demand for online shopping and supporting logistics roles has increased.
  • Nearly two-thirds of all publicized furloughs, layoffs, and downsizings are expected to be temporary.


Amid these turbulent times, the need of the hour for the staffing industry is to understand changing business dynamics and adapt accordingly. This can help them transition from their role as labour market intermediaries to the business drivers of the future.

Here and now: Strategies for the staffing industry

To ensure long-term sustenance, the objective in the immediate term is to keep the staffing engine running, mitigate the negative impacts, and make the most of emerging opportunities. Staffing companies are pivotal in reassigning candidates and associates as mandated by shifting workforce demands. Firms need to focus on nurturing local candidate pipelines, identify transferable skills/roles, and make short-term work accessible before people can return to their day jobs. Simultaneously, companies also have to quickly adapt to the changing legislative environment and enable remote work platforms. Following are some of the approaches to be considered for the immediate-to-short term:

  • Cross-industry integrated jobs and candidate data platform: A cross-industry data platform integrated with government jobs and employment databases can be created and updated in real-time. Empowered with predictive algorithms, this repository can help identify transferable skills/talent and fill the gap created by abrupt shifts in the demand and supply of the workforce.
  • Business rules engine for dynamic COVID-19 legislations: A business rules engine is necessary for companies to adapt to the ever-evolving COVID-19 legislations across countries and states without making changes to the existing mission-critical enterprise applications.
  • Targeted campaigns on niche social media networks: With a spike in jobs for essential workers like nursing staff, digital marketing campaigns targeting niche healthcare and supported communities on social media platforms can be rolled out.
  • Career transition solutions: In the face of large-scale furloughs and layoffs, carefully curated career transition solutions will be much sought after while connecting the available workforce with meaningful employment.

way forward

Beyond the short term, staffing companies must put in place cost-optimization initiatives across the recruitment value chain in order to weather the aftershocks of the pandemic. They will also have to recalibrate their existing business models. Long-term success will depend on quickly capturing revitalized demand as soon as normalcy sets in. This will require adjustments to the traditional business models and readiness to embrace potential government interventions to enforce social contracts.

To prepare themselves for the future, organizations need to build an adaptive and resilient ‘digital spine’ by quickly deploying solutions like video interviewing, chatbots, and robotic process automation. Adding advanced analytics, artificial intelligence, and machine learning to the mix will also increase the scope for firms to gradually enter new business segments and adapt to evolving business models.

Naveen Pathak leads the Staffing and Recruitment Domain Centre of Excellence (CoE) in the HiTech business unit of TCS. He is responsible for strategizing, conceptualizing, designing, developing, implementing, and supporting IT solutions for the staffing and recruiting business. He is a TOGAF-certified Enterprise Architect and holds a Bachelor’s degree in Technology from BIET, Jhansi, India, and a Post Graduate Diploma in General Management from XLRI, Jamshedpur, India. With over 14 years of experience, Pathak has played several key roles across IT consulting, pre-sales, and delivery in the professional services domain.


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