The cyclical expansion of the economy, accelerating wage inflation, and secular growth drivers in segments such as IT, healthcare, marketing/creative and education staffing are fueling growth in the staffing industry for the tenth consecutive year.
The US staffing industry will grow 4% this year, reaching a record $153.5 billion in revenue, according to the “US Staffing Industry Forecast: April 2019 Update” report from Staffing Industry Analysts. Growth is expected to decelerate to 3% in 2020 amid slowing GDP growth.
One headwind to temporary staffing market growth has been a scarcity of labor supply. Consequently, staffing buyers should take note that SIA is starting to see reported signs of bill rate increases.
The forecast update found the presence of significant increases in pay rates and bill rates across a wide range of occupations and industries, prompted by either minimum wage hikes or competition between employers for talent. In some market segments, pay/bill rate growth is a more significant driver of expansion than growth in workers placed or hours billed.
Wage growth of 5% or higher year over year has been reported by several large commercial and professional staffing firms, according to the report. One notable exception is healthcare staffing, where pricing appears to be relatively flat due to cost pressures at clients.
“2018 was a good year for the US staffing industry, and that momentum appears to be continuing this year,” said Timothy Landhuis, director of research, North America, at Staffing Industry Analysts. “With total US jobs exceeding 150 million and temporary help industry jobs over 3 million, the opportunities are vast for staffing firms with a focused strategy and proficient execution.”
SIA’s corporate and CWS council members can download the complete report online.