Keeping informed on the workforce industry ecosystem is imperative to running a successful contingent program. SIA’s biannual staffing industry forecast examines the outlook for the staffing industry and provides insights to help prepare for what’s ahead.
US staffing industry revenue — which represents companies’ spend on nonemployee labor through temporary staffing, direct hire and retained search firms — is projected to be $184.6 billion this year, down 3% compared to 2023, according to SIA’s US Staffing Industry Forecast: March 2024 Update report. However, the forecast decline is an improvement from the estimated 15% decline in 2023, when employment in temporary help services declined every month.
Excluding the nurse staffing segments — which are normalizing from elevated pandemic levels — the remaining staffing industry is projected to be roughly the same market size as last year, down only 0.3% year over year in aggregate as some segments increase and others decrease.
Looking ahead to 2025, SIA forecasts the US staffing industry will grow 3% to reach $189.9 billion, in line with an anticipated modest growth in the US economy overall.
“We predict the commercial segments will return to growth (5% for industrial and 2% for office/clerical), while most professional segments other than healthcare will enjoy mid-single-digit expansion,” the report states.
Revenue trends vary by occupational segment and sector, according to the report. Industrial staffing is expected to decrease 5% this year, while office/clerical will hold stable. IT and healthcare staffing are both expected to pull back this year from prior peak levels, down 3% and 11%, respectively.
On the brighter side, segments forecast to see revenue growth of between 5% and 8% this year include engineering, up 8%; education staffing, up 7%; life sciences, up 6%; and marketing/creative, up 5%. In addition, “place and search” revenue is expected to increase 4%.
Headwinds for the staffing industry include high pay rates (particularly in industrial staffing), greater client preference for hiring on a permanent rather than temporary basis and direct sourcing as well as growing competition from alternatives to temporary staffing, such as freelancers via talent platforms and statement-of-work consultants.
Tailwinds include a greater acceptance of contingent work arrangements, the convenience of staffing platform technology, a shift to remote work that has enlarged the talent pool, and the increased complexity of staffing and talent acquisition technology, which enhances the value proposition that staffing suppliers can bring to their clients.
The full US Staffing Industry Forecast: March 2024 Update report, with information on all staffing segments, is available online to SIA’s CWS Council members.
