US staffing industry revenue — companies’ spend through temporary staffing, direct hire and retained search firms — is projected to shrink 17% this year compared to last, according to SIA’s “US Staffing Industry Forecast: September 2020 Update.” While this is unchanged from the forecast released in July, SIA increased its growth projections for 2021; US staffing revenue is now expected to grow 12% in 2021 to $141.5 billion, up from the July forecast of 11% growth.
SIA also updated its forecast for several segments.
“As the US economy continues to reopen and recover, we are seeing positive momentum across many segments of the staffing industry,” said Timothy Landhuis, SIA’s director of research for North America. “We project that US temporary staffing revenue will be down 14% this year, a significant drop, but not nearly as steep as the 24% decline experienced in calendar year 2009.”
Revenue trends vary greatly depending on occupational segment and sector, according to the report. The professional segments fare better than commercial, with projected declines this year of 10% and 20% respectively; meanwhile, temporary staffing overall fares better than place & search with projected declines of 14% and 33% respectively.
Only two segments of the US staffing industry are forecast to see revenue growth this year: Travel nurse and life sciences.
Bill rate inflation. Improved forecasts for 2020 revenue growth include travel nurse staffing, with a new forecast of 10%, up from 5% in the July forecast. The growth in travel nurse revenue this year is primarily driven by the higher bill rates to cover crisis wages associated with Covid-related demand.
“While it appears that non-Covid care is starting to recover, the surge in Covid-driven travel nurse demand has started to flatten, if not revert a bit,” the SIA report states. “Furthermore, as there has been more time to adjust to the pandemic, even Covid-related assignments may have less crisis-level escalation in bill rates.”
In the IT staffing sector, revenue is now forecast to decline 9% in 2020, an improvement from the July forecast of a 10% decline. The mix shift to higher-skilled requirements has kept bill rates in the IT staffing sector elevated in aggregate. Talent for these roles remains in tight supply and bill rates are holding steady. Lower-skill roles, where headwinds are more prevalent, are seeing bill rates moderately soften.
Other sectors with improved 2020 revenue forecasts include direct hire to a decline of 35% from a decline of 40% in the July forecast, and industrial, to a decline of 20% from a decline of 22%.
Meanwhile, the outlook for some staffing sectors deteriorated from the July SIA forecast:
- Education: to -40% from -18%
- Locum tenens: to -15% from -5%
- Allied healthcare: to -15% from -10%
- Marketing/creative: to -20% from -16%
- Office/clerical: to -20% from -18%
The report’s projections for next year’s overall growth in US staffing revenue to 12% are based on three key assumptions: The spread of Covid-19 will continue on a downward trend; US gross domestic product will continue to grow in a gradual but steady recovery; and a Covid-19 vaccine will be widely available in the first half of 2021.
The full report, “US Staffing Industry Forecast: September 2020 Update” with information on all staffing segments is available online to SIA’s corporate and CWS Council members.