In looking back over the past 25 years that I’ve spent marketing staffing and recruiting agency software, I can’t help but marvel at the changes in the industry and the technology that supports its success. Just for grins, I’ve put together this brief outline of the evolution of staffing and recruiting software from the 1960’s to today – and my own vision of where I believe the technology will go.
The age of the dinosaur. Only the largest (national) staffing and recruiting agencies can afford the big, cumbersome, and frightfully expensive computer systems of the day. These are almost exclusively used in back office accounting and payroll support – essentially big calculators. Everyone else is using paper, pencil, rolodexes and filing cabinets. This manually intensive practice will continue for most smaller agencies for a decade or more. The staffing and recruiting industry is grossing in the hundreds of millions of dollars.
The advent of mini-computers brings technology into the realm of affordability for aggressive mid-size staffing and recruiting agencies. A few home-grown solutions are offered for sale to other agencies for the first time. These systems offer rudimentary capabilities for back office accounting functions or act as crude electronic filing cabinets for candidate data. Staffing and recruiting agencies rely on the phone and classified advertising to find candidates and make placements. The staffing and recruiting industry hits one billion in gross revenues.
With the introduction of the Personal Computer the development of business applications exploded. Forward thinking (or frustrated) staffing and recruiting agencies develop relatively unsophisticated back office or front office programs to aid in their business operations, but none are as capable as the mini-computer systems which can network many end-users at once. While many repetitive tasks are becoming somewhat automated, most systems are still little more than glorified calculators and data repositories. Staffing and recruiting industry revenues grow to $10-plus billion.
PC networking enables the development of a new generation of more sophisticated multi-user systems for recruiting and staffing operations. Integration of front-to-back office functions leads to impressive gains in staffing agency operating performance. Mini-computer system use peaks in the mid-1990’s and begins its decline. The birth of the internet changes everything and foreshadows a globally networked future. Online job boards begin their rapid replacement of classified advertising. Total industry revenues accelerate past $70-plus billion.
Staffing and recruiting software based on PC networks grow in their capabilities, while the internet provides an ever-growing pool of candidates and the means to connect to them and to customers. The first internet web-browser based recruiting and staffing software solutions appear. These solutions mark the beginning of the migration to internet-based data centers (Software as a Service). The introduction of inexpensive laptops and smartphones empower staffing and recruiting professionals to operate with more mobility. Staffing and recruiting industry revenues crack $100-plus billion.
Software as a Service for staffing and recruiting overtakes self-hosted computing environments, even at larger agencies. Increasingly powerful mobile and smartphone capabilities permit 24×7 global staffing and recruiting operations. Numerous point solutions developed for tasks such as sourcing, background checking, and more are integrated. The first simple artificial intelligence (AI) based solutions appear in the form of chatbots or agents that are capable of mimicking some human recruiter activities. By the end of the decade, industry revenues pass $150 billion.
Most staffing and recruiting software solutions have migrated to the cloud. Large multi-national staffing firms begin using their data pools and the growing power of AI-based systems to relieve recruiting and staffing professionals of nearly all of the mundane tasks of the past. In addition, AI-based agents become capable of performing many background tasks autonomously; such as sourcing, advertising, chatting with candidates, and more. Most back-office functions become completely AI-automated. Staffing and recruiting revenues grow to nearly $200 billion.
By the end of the decade many staffing and recruiting positions have been replaced by AI-based systems, even at small to mid-size agencies. These AI agents have reached a level of sophistication that enables them to autonomously manage searches, sourcing, testing, and placement of most low-to-middle range job requisitions. Further, many customer service and sales positions that were common just 20 years before have also been eliminated with the rise of AI-based agents that are more efficient and less costly. Total industry revenues hit more than $250-plus billion.
Phil McCutchen is a B2B software marketing professional with 25-years of experience in the staffing and recruiting industry. The observations and predictions presented here are based on his own research and future thinking and represent his own opinions.