AGS Strategic Supplier Insights

As we continue to view shifts in the labor market, we decided to survey several of our AGS Strategic Suppliers to gain valuable insight into current and foreseeable trends.

With economic uncertainties still looming globally, most of our suppliers anticipate that hiring intentions will remain flat or unchanged compared to the previous year. Despite this, 72% of respondents believe that employers will hire contingent labor to fill open positions rather than full-time or gig workers. This trend aligns with common market behavior during periods of economic uncertainty, where employers utilize temporary staffing as a cost-saving measure and to evaluate candidates before committing to full-time employment.

When comparing our responses to our previous supplier survey conducted in 2023, we can see that pay rates and flexible work benefits continue to be the top two most common challenges suppliers face when attracting in-demand talent. Although employment numbers have slowed since 2022, average wages in the US rose by 4% year over year in February, surpassing inflation. However, real wage growth remains below inflation, reducing purchasing power. This trend is global, with high inflation making competitive pay rates essential for attracting talent.

Employers are also becoming more strategic with their hiring decisions as they navigate the uncertainties of global political unrest. This has led to a shift towards skills-based hiring rather than focusing on tenure. Our suppliers have observed that employers are seeking individuals who possess the knowledge to fill multiple roles, enabling them to reskill and upskill as needed while also reducing headcount costs. This trend is particularly evident in the IT sector, where there is a growing demand for coding skills and AI and machine learning expertise to address automation needs across various industries.

In addition to the heightened investment in automation, there is a considerable emphasis on customer experience roles. There is a demand for skilled individuals who can deliver positive and personalized customer experiences to differentiate from competitors. Overall, companies are prioritizing professionals with cross-functional expertise who can drive digital adoption and support long-term growth. This includes a crucial blend of technical, creative and customer-centric skills.

As inflation has risen globally in recent years, it’s led to significant changes in wages and legislation, which have greatly influenced sourcing and procurement strategies. Our suppliers shared that many programs are adopting creative and strategic initiatives in partnership with their compliance teams to adapt to new regulations. For example, in the UK, the Employers National Insurance uplift is expected to impact the ability to find contingent talent, prompting companies to rely more on their brand and internal promotions. Companies are embracing automation as a means for operational and cost efficiencies while also increasing investment in employee development opportunities to help maintain competitiveness and attract top talent. Success will be achieved by prioritizing compliance, training, and adopting technology solutions with strategic workforce planning.