The relationship between contingent workforce managers and their talent suppliers is integral to running a successful CW program, but the dynamic can be complicated. Understanding the trends and results from your staffing providers can help you better navigate the often-complex relationship.

Published every two months, SIA’s “US Staffing Industry Pulse Survey Report” provides the contingent workforce buyer with insight into the suppliers’ environment, how it affects their programs and what may lie ahead.

“This report helps to inform contingent workforce buyers. Being an educated buyer is an absolute benefit to your organization and your CW program and can help you educate internal stakeholders on market trends or challenges,” says Matt Norton, workforce solutions research director at SIA. “The report highlights that while net orders are falling owing to macroeconomic uncertainty, bill rates continue to climb as the tight labor market persists.”

Provider Landscape

New orders. The survey featured in the “March 2023 Selected Highlights” report found a net decrease in new orders of 27%, down from a net increase of 4% in the previous survey and its lowest historical value — tracked since 2011 — apart from the outset of the pandemic in 2020. However, a net 41% of staffing firms surveyed for March’s report still expect an increasing trend in the next six months.

Bill rates. The survey also provides some insight into bill rates. A net 12% of staffing firms reported an increasing trend in bill rates over the last three months; however, a net 21% expect an increasing trend in the next six months.

Recruiting difficulty. The research suggests a loosening in the labor market as average recruiting difficulty decreased to 3.21 from 3.28 in the January report (on a scale of one to five) and average sales difficulty increased to 3.10 from 2.93, continuing a trend of convergence since mid-2021. Industrial staffing firms continued to post the highest recruiting difficulty at 3.36.

Revenue. Overall, respondents reported a median 3% year-over-year decrease in their US temporary staffing revenue in February, down from an 11% increase in December; however, the aggregate decrease in their US temporary staffing revenue was 13% in the February survey, suggesting large firms in this month’s survey faced larger declines than smaller companies.

Locum tenens posted the strongest median revenue growth at 21%, followed by allied healthcare, up 10%. Finance/accounting, engineering/design and IT segments also reported modest revenue growth. However, the travel nurse staffing segment reported a 21% decline.

Layoffs. The survey for the March report also asked participants whether they had laid off temporary workers on assignment and/or internal staff since the start of the fourth quarter of 2022. Regarding layoffs of temporary workers on assignment, 67% of industrial staffing firms reported temporary worker layoffs, with 44% stating layoffs affected 1% to 5% of such workers. Additionally, 42% of IT staffing firms reported layoffs of temporary workers.

Meanwhile, 27% of respondents overall reported laying off internal staff, with 16% stating the layoffs constituted 1% to 5% of staff. In addition, 42% of respondents reported laying off temporary workers on assignment at the request of clients.

Respondents providing healthcare per diem staffing had the highest percentage reporting internal staff layoffs at 36%, with 14% reporting layoffs of 10% or greater. Thirty-six percent of industrial respondents also reported internal layoffs, but most were at a smaller scale with 21% reporting only 1% to 5% of staff were laid off. On the flip side, none of the nine responding locum tenens staffing firms reported any layoffs.

Cost reduction measures. The most recent Pulse survey also queried participants about cost-reduction measures taken in 2023. Overall, 57% of staffing companies reported taking at least one cost reduction measure, and 43% of companies reported not having taken any measures.

Thirty-eight percent of respondents reported delaying/pushing out hiring plans this year, while 21% of companies implemented a hiring freeze. In addition, 27% of respondents, or 12 companies, reported they had changed or were considering changing vendors/systems. Other cost-cutting measures mentioned include limiting/reducing travel expenses and reducing marketing/advertising expenses.

The survey for SIA’s March Pulse Report included responses from 172 staffing firms that conduct business in the US. Selected highlights of the March 2023 Pulse Report are available for download to CWS Council members.