Successful contingent workforce programs depend on strong relationships with talent providers. Keeping tabs on those providers’ challenges, concerns and outlooks will help prepare you for potential challenges and opportunities that could affect your program.
Published every two months, SIA’s US Staffing Industry Pulse Survey Report is a useful tool to inform contingent workforce management professionals about the supplier’s environment, how it affects programs and what may lie ahead. SIA’s recently published January 2024 Pulse Survey Update examines December 2023 US staffing trends, including the improving performance of participating staffing firms and plans for artificial intelligence.
“This report helps to inform contingent workforce buyers,” says Matt Norton, workforce solutions research director at SIA. “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.
“The report highlights the fall in spend on temporary workers through US staffing firms in the past year,” he says. “Client caution, as well as recession concerns on the part of both clients and candidates, have contributed to the expected declines. The industry uncertainty is also evidenced in the sales difficulty for staffing firms which remains at its highest point outside of pandemic period.”
Provider Landscape
Bill rates. The January 2024 Selected Highlights report sheds some light on bill rates. A net -1% of staffing firms reported an increasing trend in bill rates over the last three months, up from -4% in the prior survey for the November 2023 report; additionally, the net percentage of staffing firms expecting an increasing trend in the next six months increased to 17% in the January report from 12% in November.
New orders. The survey found new orders decreased a net 5% in the last three months, down slightly from a net decrease of 3% reported in the previous survey for the November report; a net 53% of staffing firms surveyed for January’s report expect an increasing trend in the next six months, down slightly from 54% in the previous survey.
“The next six month expected trend in new orders has been high for quite some time across most staffing segments despite lackluster current orders,” says Curtis Starkey, senior research analyst at SIA. “In this month’s survey, upward trends in revenue could portend that the worst of order declines is behind us, and eventually the optimism of survey takers will be reflected in positive order and revenue growth.”
Labor market balance. Average sales difficulty increased to 3.46 in the January survey from 3.43 in November (on a scale of 1 to 5), and average recruiting difficulty increased to 3.08 from 2.95. Within SIA’s tracking period, average sales difficulty remains at its highest historical level outside of the beginning of the pandemic in 2020.
Spend on temp labor. Overall, spending on temporary workers through US staffing firms fell by a median 5% year over year in December 2023 among staffing firms participating in the Pulse survey, compared to a 10% decrease in October. The aggregate decrease in their US temporary staffing revenue, which was 10% in December compared to 17% in October, maintains the 2023 trend of lagging aggregate growth and illustrates the recent phenomenon of larger companies reporting more negative growth than smaller companies; in December, staffing revenue among small providers was flat year over year, midsize company revenue declined 5% and large company revenue was down 10%.
Allied healthcare posted the strongest median revenue growth at 11%; growth was also positive in locum tenens at 8%, finance/accounting at 6% and engineering at 2%. Growth was flat in six segments: industrial, IT, per diem nursing, legal, life sciences and marketing/creative. Direct hire revenue was also flat year over year. On the flip side, the travel nurse staffing segment once again posted the largest decline, down 19%, while office/clerical — the only other down segment — edged down 1% year over year.
Artificial Intelligence
The most recent Pulse survey also queried participants about the benefits of AI on staffing and planned uses of generative AI.
Of the 106 companies responding to the question, “What are some ways in which you see AI benefiting your staffing operations in 2024?” 29 companies — 27% of respondents — cited candidate sourcing/matching as a benefit of AI; 17 companies, 16%, pointed to AI benefiting sales/marketing; and 11 companies, 10%, mentioned benefits in candidate engagement.
By segment:
Commercial. Seven of the 28 responses, 25%, mentioned AI benefiting sales/marketing, and five companies, 18%, pointed to efficiency with regards to the automation of recruitment tasks.
Healthcare. Four of the 29 responses, 14%, mentioned benefits in sourcing/matching; however, the same amount shared they were unsure or saw no impact of AI on operations. Twelve of the 25 responses, 48%, mentioned sourcing/matching and four responses, 16%, referred to candidate engagement.
Other professional or multi-segment. Nine of the 24 “other” responses, 38%, pointed to benefits in sourcing/matching, and five responses, 21%, mentioned benefits in sales/marketing.
The survey also asked, “What are some ways in which you plan on using ChatGPT/generative AI in your staffing operations in 2024?”
Of the 106 companies responding to the question, 18 companies, 18%, mentioned using generative AI to write emails and other communications. Thirteen companies, 13%, plan to use generative AI in marketing tasks, and 13 companies plan to use generative AI to generate job descriptions/job postings. Fifteen companies, 15%, stated they have no plans to use generative AI/ChatGPT or are unsure whether they will.
The survey for SIA’s most recent Pulse Report included responses from 188 staffing firms that conduct business in the US. Selected highlights of the January 2024 Pulse Report are available for download to CWS Council members.
