If we thought 2021 would settle down after a tumultuous 2020, we were wrong. The business world is still reeling, this time from a labor crunch that’s affecting everything from supply chains to restaurant service.
It’s a time of great uncertainty for many companies: each month more than four million US workers resign. Those resigning are mostly mid-career workers, and they take with them the skills that keep a company going on a day-to-day basis. Complicating matters further, 48% of employees surveyed by Gallop say they’re actively looking for another job, putting business continuity at risk.
How are companies pivoting to adapt to these post-pandemic challenges? Paragon Digital Services has a unique perspective on some aspects of labor shortage, as our teams are asked to step in and fill gaps as they arise.
Here our observations gathered over the past year, and what we see in store for 2022.
Outsourcing fills in skill gaps
Outsourcing various aspects of business operations has been on an upward trajectory for more than a decade, but the pandemic has accelerated the trend.
As workers reevaluate their priorities and assess how to achieve a work-life balance that’s right for them, hiring managers are panicking. It’s not uncommon to see $5,000 sign-on bonuses offered for entry-level positions and warehouse workers. And the fear that once they invest in recruiting, those workers will be lured away by a competitor.
In 2021, companies engaged outsourcing partners as a stop-gap measure, but that fix is increasingly seen as more of a permanent solution, or at least until such time when recruiting costs come down a bit. Those who hope to eventually bring functions back in-house are keen to work with outsourcers who can transfer skills to newly hired employees.
In-housing plans slowing down or put on hold
Prior to the pandemic companies have been bringing various marketing activities in-house, but those efforts have slowed down. In-housing is proving expensive and its rewards are harder and taking longer to realize, prompting many brands to hit the pause button. “Many advertisers are being more selective about how they want to work with agencies and are prioritizing flexibility and capability over scale and stability,” write Kimeko McCoy and Seb Joseph in Digiday.
Many companies are continuing their push towards in-housing, but they want to focus those efforts on the strategic work, and leave the more technical aspects to outside experts like Paragon’s trafficking teams. Some see this approach as a strategy to retain employees who want more interesting work. For others, candidates with the needed technical skills just aren’t available in their areas, so they have no choice but to outsource.
Enabling full-time employees to focus on strategic work is a good way to combat the Great Resignation, as many people have quit in order to pursue jobs that give them a greater sense of fulfillment.
Operations still seen as prime outsourcing candidate
Business process outsourcing (BPO) has been on an upward trajectory for the past 20 years and is showing no signs of clowning down. In 2022, the global BPO market is valued at $232 billion, and will grow by 8.5% each year until 2028.
Advances in SaaS, platform as a service and infrastructure as a service give companies a lot more flexibility to outsource some or all of operations to a partner.
Looking ahead to 2022
So what’s ahead for outsourcing, particularly as it applies to the media industry?
We’re likely to see hybrid models, with companies looking for outsourcing partners willing to take on a portion, but not all, of their workloads. Companies want partners who can augment, not necessarily replace, their internal teams.
Outsourcing engagements will start out small, but will increase as clients see tangible benefits. This is a trend we see currently, and expect it to continue, especially as managers strive to provide more meaningful work for their employees in order to retain them.
If the Great Resignation continues at its current rate, outsourcing will become an important strategy to maintain business continuity. In some cases, outsourcing partners will be asked to perform more niche work.
Rising recruitment costs, higher salaries – along with the scourge of luring trained away from current positions with competitive offers – may lead more companies to seek outsourcing partners as a more permanent solution.
Get in touch today to learn how we can help you transform your ad ops as we head into 2022.