5 Ways in Which Understaffed Firms Benefit from Outsourced Recruiting Services

Is being understaffed costing you new business opportunities? Many organisations worldwide are losing clients and valuable growth opportunities due to shortages of staff and resources. High employee turnover, skill shortage, and labour shortage have created severe understaffing issues for most industries. And recruitment firms are finding it difficult to source suitable candidates to fill all vacancies.

Outsourced Recruiting Services centres are fast becoming a cheaper, timesaving, and more efficient alternative to resolving all understaffing issues. Recruitment Outsourcing Companies can help understaffed staffing agencies find the best-fit candidates for their clients. Outsourced Recruiting Services providers deliver services such as candidate sourcing & screening, full-cycle recruitment, payroll management, market mapping, and out-of-hours support at lower costs and lesser time. They use the latest talent acquisition tools and automated technology and have emerged as the best solution for understaffed recruitment agencies dealing with skills and labour shortages.

Learn how understaffing can damage your business and how Outsourced Recruiting Services be a perfect solution to meet all your staffing requirements below.

What Causes Short Staffing?

Short staffing occurs for many reasons, such as a shortage of qualified candidates, increased business volume, high employee turnover rate, or business downsizing. Labour and skills shortage have emerged as a major concern for developed economies such as the UK.

According to The Recruitment & Employment Confederation report:-

• The biggest concern for 2021 is the severe labour shortage faced by 88% of recruiters.
• Skills shortage emerged as the other big concern faced by 65% of recruiters.
• 97% of the respondents admitted that it takes longer to fill the vacancies indicating difficulties in candidate sourcing, screening, and recruitment.
• About two-thirds (58%) of recruiters said they have almost 30% more vacancies to fill than pre-pandemic time.

Short staffing is a prevalent challenge across the UK, especially within traditional industries such as healthcare, manufacturing, and construction. The primary causes of short staffing vary from skill shortages and the aging workforce to rising attrition rates and changes in employment dynamics.

1. Skills Shortages Across Key Sectors

According to a 2023 report by the Recruitment & Employment Confederation (REC), 77% of UK businesses faced difficulties filling key vacancies due to skill shortages. Industries such as construction, healthcare, and engineering have seen particular strain, with roles such as electricians, nurses, and IT specialists being among the hardest to fill. The Office for National Statistics (ONS) echoes these concerns, reporting that the construction sector alone saw a 42% increase in vacancy rates in the past year, driven largely by a gap in skilled labor.

2. Aging Workforce

The aging workforce in the UK is a significant driver of understaffing. With 30% of the workforce expected to reach retirement age within the next 10 years, sectors such as manufacturing, healthcare, and public services face a growing challenge in replacing experienced professionals. The Chartered Institute of Personnel and Development (CIPD) highlights that industries relying on manual and technical skills are especially vulnerable. This shift leaves firms struggling to attract young talent to fill the gaps left by retirees.

3. Rising Employee Attrition

High attrition rates across industries have further contributed to short staffing. A 2024 report from PwC UK indicates that attrition rates increased by 18% across the board in the past two years, with a particular impact on customer-facing and technical roles. The reasons behind these rising rates are varied, from pandemic-induced career shifts to the increase in flexible working opportunities luring employees away from traditional 9-5 roles.

4. Economic Uncertainty and Budget Constraints

The UK’s economic instability has forced companies to impose hiring freezes, leaving many firms short-staffed. A report from the Confederation of British Industry (CBI) in 2023 showed that 60% of surveyed firms delayed hiring due to economic uncertainties such as inflation, interest rate hikes, and Brexit-related disruptions. Budget constraints have led many organizations to either reduce their workforce or pause expansion, exacerbating the understaffing crisis.

5. Changing Workforce Preferences

There has been a significant shift in workforce preferences, with many employees now valuing flexibility over traditional employment models. A 2024 Deloitte survey showed that 41% of employees prefer working part-time or freelance roles rather than full-time positions. This trend has created additional challenges for firms in traditional industries, which often require a steady workforce to operate efficiently.

Factors Responsible for Understaffing

The changing scenario has put immense pressure on the recruitment and staffing agencies to source the right-fit candidates and fill the vacant positions across the understaffed industries. The changing job market has resulted in creating several staffing issues for recruitment agencies due to factors such as:

1. Sudden vacancies– Recruitment firms must fill in sudden vacancies at short notice. Finding suitable candidates on many occasions when the requirement is huge can be difficult. Given the job market and understaffing issues, they are unable to deliver.
2. Skill Shortage– Candidate recruitment for Healthcare, IT, Engineering, Accountancy, and other high-calibre industries is challenging for staffing agencies. Countries such as the UK are experiencing skills shortage and it is difficult to fill all vacant positions in these sectors.
3. Candidate Screening– Searching for candidates within the same talent pool is exhaustive, and recruiters have limited options that do not suffice to fill all vacancies.
4. Lack of Resources – Many recruitment agencies do not have access to automated tools and the latest technology to complete the recruitment process for such industries.

How Can Understaffing Damage Your Business?

• Lower Employee Productivity – The burden of understaffing falls on the existing employees who need to work extra. They have to substitute for the understaffed workforce taking more than their usual workload. This results in overwork and exhaustion for the existing workforce and decreased productivity.
• Lower Employee Morale – Employees at understaffed firms have more work to complete and higher performance expectations adding to their stress levels. Stressed-out employees experience lower job satisfaction and subsequently lower employee morale.
• High Employee Turnover – Understaffing at the workplace leads to higher employee turnover rates as employees are unsatisfied and experience physical and mental exhaustion. As old employees leave their jobs for better working conditions, understaffed businesses face challenges in hiring and training new employees.
• Loss of Business – A short-staffed business does not have enough workforce to deliver the required goods and services to its clients. As a result, many companies miss growth opportunities and lose projects. Loss of business also results in loss of revenue and missed opportunities to enter new markets.
• Damaged Reputation – Inability to meet deadlines and deliver client requirements due to staff shortage damages a business’s reputation. When there are insufficient employees, client service and work quality are adversely affected. This can negatively impact the brand image.
• Higher Payroll Costs – When staffing levels are too low, companies hire temporary staff resulting in higher payroll costs. Companies further incur additional charges for training new employees. They also have to spend more than usual on the hire-and-train process for temporary staff.

Five Ways in Which Outsourced Recruiting Services Helps to Tackle Understaffing Issues

Outsourcing the recruitment process is a great way to tackle understaffing problems at a workplace. Whether you require temporary workers, contractual workers, or full-time employees on a long-term basis, your offshore recruitment partners can help find the right fit. Offshore recruitment services offer a complete solution and tailored services facilitating understaffed firms to hire the best talent for any industry and overcome problems such as skills shortage and labour shortage.

Benefits of Outsourced Recruiting Services

• Outsourcing helps ease the workload and takes the burden off the workforce, thereby improving productivity levels.
• Outsourcing recruitment processes is a great way to deal with problems such as skills shortage. While hiring from a limited talent pool makes it difficult for companies to fill specific roles, RPO allows greater flexibility and access to a larger talent pool.
• Better working conditions and less workload, in turn, results in improved employee morale and higher job satisfaction. These factors are directly linked to lower employee turnover rates and longer tenures of the workforce.
• Quality of service delivery at understaffed forms often takes a hit as employees are overburdened. Outsourcing tedious tasks to offshore delivery centres will ensure efficiency in processes and save time and cost.
• Outsourcing recruitment providers use the latest tools for candidates sourcing, hiring, and employee & payroll management. Implementing the latest technology drives efficiency and speed to the service delivery of understaffed firms.

QX’s Outsourced Recruiting Services for Staffing Firms

Are you a staffing/recruitment agency having difficulty filling all open vacancies for your clients? Is your workforce dealing with understaffing issues resulting in lower productivity, lower morale, delays, and a decline in service quality? It is time to look for cheaper, time-saving alternatives to hiring temporary staff to meet all your business requirements.

A free consultation with QX Global Group can help you find out how all your staffing requirements can be met with ease and efficiency.

Know more about:

• Full Cycle Recruitment
• CV Sourcing
• Head Hunting
• Market Mapping
• Compliance
• Payroll Management
• Out-of-hours Support

Abishek Balakumar

Abishek is a marketing partner with over a half a decade of experience in B2B IT. With a passion for storytelling and a knack for marketing strategy, he crafts compelling narratives that resonate with our audience driving results through a team of 3.

Originally published Oct 14, 2024 11:10:14, updated Oct 14 2024

Topics: Candidate Sourcing, Recruitment Process Outsourcing, skills shortage, Talent Acquisition, Understaffing