Strong relationships with providers are key to running a successful contingent workforce program. Keeping abreast of the environment they are operating in will help prepare you for potential challenges and help make your program a top priority for your supplier.

Published every two months, Staffing Industry Analysts’ US Staffing Industry Pulse Survey Report provides insights into the staffing suppliers’ environment, how it affects their organizations and what they should prepare for.

“This report helps to inform contingent workforce buyers,” says Matt Norton, workforce solutions research director at SIA. “Understanding the opportunities and the challenges that your staffing partners have allows you to be a more educated buyer and better partner. This not only benefits your program and your organization but also benefits the staffing partner and contingent workers.”

Provider Landscape

Bill rates. The survey featured in the November 2023 Selected Highlights report shed some light on bill rates. A net -4% of staffing firms reported an increasing trend in bill rates over the last three months, up from -9% in the prior survey for the September report; however, the net percentage of staffing firms expecting an increasing trend in the next six months fell to 12% in the November report from 16% in September.

New orders. The survey found new orders decreased a net 3% in the last three months, an improvement from a net decrease of 16% reported in the previous survey for the September report. However, a net 54% of staffing firms surveyed for November’s report still expect an increasing trend in the next six months, unchanged from the previous survey.

“Although orders continue to be down, a staggering net 54% of this month’s Pulse participants expect an increasing trend in new orders over the next six months,” says Curtis Starkey, senior research analyst at SIA and author of the report. “Combine that with the net 12% expecting increasing bill rates, and we’ll start to see revenue trend upward in coming months if expectations prove correct.”

Labor market balance. Average sales difficulty increased to 3.43 in the November survey from 3.40 in August (on a scale of 1 to 5), and average recruiting difficulty decreased to 2.95 from 3.09. Within SIA’s tracking period, average sales difficulty remains at its highest historical level outside of the beginning of the pandemic, and recruiting difficulty is at its lowest level since 2014. Additionally, the IT recruiting difficulty of 2.46 is the lowest value seen in the tracking period.

Spend on temp labor. Overall, spending on temporary workers through US staffing firms fell by a median 10% year over year in October among staffing firms participating in the Pulse survey, compared with a 7% decrease in August. However, the aggregate decrease in their US temporary staffing revenue was 17% continuing the 2023 trend of lagging aggregate growth and illustrating the recent phenomenon of larger companies reporting more negative growth than smaller companies; in October, staffing revenue among small providers was down a median 1% year over year, midsize company revenue declined 10% and large company revenue was down 15%.

Locum tenens again posted the strongest median revenue growth at 20%; growth was also positive in allied healthcare at 2%. Growth was flat in engineering, finance/accounting, legal and office/clerical. Direct hire revenue was also flat. On the flip side, the biggest declines were seen in the travel nurse staffing segment, down 21%; per diem nursing, down 14%; and life sciences, down 8%.

Providers’ Biggest Challenges

The most recent Pulse survey also queried participants about the biggest challenges they are currently facing. Of the 115 companies responding to the question, “What is the biggest challenge that your staffing firm is currently facing?” 46 companies — 40% of respondents — referred to a slowdown in new orders/requisitions as their biggest challenge; 16 companies, 14%, mentioned having difficulties attracting talent; and 10 companies, all in the healthcare staffing segment, referred to decreasing bill rates/margins.

By segment:

  • Commercial. 10 of the 28 responses, 36%, pointed to a slowdown in new orders/requisitions, and six companies noted challenges attracting talent.
  • Healthcare. 10 of the 39 responses, 26%, mentioned decreasing bill rates/margins, and seven companies shared they were experiencing a slowdown in new orders/requisitions.
  • IT. 20 of the 29 responses, 69%, pointed to a slowdown in new orders/requisitions.
  • Other professional or multi-segment. Nine of the 19 “other” responses, 47%, mentioned a slowdown in new orders/requisitions.

The survey for SIA’s most recent Pulse Report included responses from 178 staffing firms that conduct business in the US. Selected highlights of the November 2023 Pulse Report are available for download to CWS Council members.