25+ Staffing Industry Statistics and Trends You Need to Know

There is no denying that the staffing industry has grown by leaps and bounds over the past couple of years.

It has progressed from its role as a temporary staffing provider for mostly short-term coverage (for situations such as maternity leaves and seasonal spikes in demand) to a more structured and necessary service within a wide range of industries and professions.

In many ways, the staffing industry has become an intermediary between companies’ HR departments and their preferred labor sources, ultimately connecting employers with millions of workers globally. In doing so, it has provided adaptability not only at the individual business level but also at the broader scale of managing macroeconomic pressures and socio-economic risks across the entire labor market.

Today, the staffing industry stands on the brink of another profound transformation amidst disruption caused by technologies such as AI, machine learning and automation. The shifting mechanisms of the workforce have also introduced a spectrum of new roles: from freelancers and consultants to fixed-term employees, temporary workers, independent contractors, agency workers, gig workers, on-call personnel, seasonal staff, and part-time employees.

As we dive into staffing industry statistics that illuminate current trends, it becomes evident that the future holds a sea change where traditional job roles may evolve or merge, remote work becomes ubiquitous, and skill versatility becomes more vital than ever before.

Key Statistics & Trends in the Staffing Industry

1. Industry Growth and Market Size

• In 2023, the revenue of the staffing industry worldwide totalled roughly $593 billion U.S. (Statista).
• The staffing industry is expected to grow at a compound annual growth rate (CAGR) of 5.2% from 2022 to 2028 (Staffing Industry Analysts).
• The average gross margin for US staffing firms in 2023 is 22.7%, ranging from 15.3% for clerical assignments to 32.6% for marketing and creative functions (PGC Group).
• There are nearly 26,000 staffing and recruiting enterprises in the US, and about 57% of those companies are in the temporary and contract staffing sector (American Staffing Association).
• U.S. staffing companies employed an average of 2.4 million temporary and contract workers per week in the fourth quarter of 2023, a decrease of 16.8% from 2022. Annual sales for temporary and contract staffing totaled $142.4 billion, a 10.5% decrease from 2022​ (American Staffing Association)​.

2. Employment Trends

• Throughout 2023, US staffing companies hired 12.7 million temporary and contract employees (American Staffing Association).
• 6 in 10 staffing employees (64%) work in the industry to fill in the gap between jobs or help them land a new one (American Staffing Association).
• In 2023, the number of independent workers in the United States increased significantly, regardless of the frequency of work. In 2023, there were about 36.6 million occasional independent workers in the United States, an increase from 15.8 million in 2020 (Statista).
• Almost 27 million people are employed on a part-time basis in the United States (Statista).
• The proportion of U.S. paid job postings for contractor roles rose by 26% from 2021 to 2022, whereas the growth for full-time positions was only 6% annually. (LinkedIn).

3. Workforce Dynamics

• 1 in 5 (20%) list schedule flexibility as a reason for choosing temporary/contract work (American Staffing Association).
  
• Staffing employees work in all occupations in all sectors (American Staffing Association).
  Distribution by industry includes:
  
  • 36% Industrial
    
  • 24% Office-Clerical and Administrative
    
  • 21% Professional-Managerial
    
  • 11% Engineering, Information Technology, and Scientific
    
  • 8% Healthcare
    
• The highest-paying roles in staffing include management positions, with annual salaries exceeding $130,000, and tech roles, such as software developers, who earn around $140,470 annually. The IT staffing industry generally pays $131,470 per employee per year​ (DOIT)​.
  
• 80% of employers report having difficulties filling openings because of an ongoing shortage of candidates’ skills (ManpowerGroup).
  
• A staggering 77% of employers globally say that they’re having challenges filling available roles (Manpower Group).

4. Staffing Agency Performance

• The cost of hiring the wrong candidate can be $15,000 per bad hire (CareerBuilder).
  
• It takes companies an average of 42 days to fill vacancies (Society of Human Resource Management (SHRM)).
  
• Over 67% of recruiters say that the best way to boost recruitment performance is to invest in new recruiting technology (LinkedIn).
  
• 54% of candidates read employees’ reviews and 55% turned down positions after reading the negative reviews (OnHires).
  

5. Candidate Experience and Satisfaction

• 60% of job seekers report abandoning an application due to a lengthy or complex hiring process (SHRM Foundation).
  
• 64% of companies associate recruiter performance with positive candidate feedback (CareerBuilder).
  
• First impressions matter - over 40% of candidates drop out of the recruitment process after a poor interaction with a hiring manager (HRMagazine).
  
• 66% of candidates want to be kept informed during the hiring process (OfficeVibe).
  
• Traditional recruiting practices make it harder to find candidates since around 70% of potential employees are passive talents who aren’t actively looking for new jobs. (OnHires).
  
• 80% of vacancies are never advertised (Forbes).
  

Top 5 Staffing Industry Challenges

1. Talent Shortages

According to ManpowerGroup, 75% of employers report a talent shortage -- making it the highest in a decade.

The issue isn't just that workers are unwilling to work — there's a valid argument that companies could do more to attract and retain talent.

However, a significant part of the problem lies in the recruitment system itself. According to research by Harvard Business School’s Project on Managing the Future of Work and consulting firm Accenture PLC, nearly 90% of executives admitted that their applicant filtering software prevents them from seeing many qualified candidates. This means the very tools designed to simplify hiring are also causing employers to miss out on potential talent.

2. Retention Issues

Gartner states that the professional services industry could see a turnover rate as high as 24% in the years to come. When it comes to retention, there are many reasons why employees in all sectors are leaving their jobs, but many boil down to poor compensation or lack of engagement.

For example, low or unfair wages often cause employees to look for opportunities elsewhere. If one of your major competitors happens to be paying at or above the industry standard, it wouldn’t be surprising if that was where their ongoing job search started. Similarly, ineffective communication within the company culture may cause employees to feel unheard or disengaged without a means to voice their concerns and provide regular feedback.

Many employers also don’t offer enough growth incentives for professional development, so as soon as workers identify advancement opportunities elsewhere, they leave.

Nearly 75% of employee turnover (77%) is preventable with proper engagement and development programs (Gallup).

3. Adapting to Remote Work

More than 80% of company leaders (82%) plan to allow employees to work remotely at least part of the time (Gartner).

Organizations looking to attract and retain talent will not just be forced to find the perfect remote strategy but will also have to look to tackle the cost of work head-on. While some managers have acknowledged the advantages of remote work — with studies indicating that employees are often more productive and less likely to quit when given workplace flexibility — many remain hesitant to make remote work a permanent option.

This hesitation persists, especially as major corporations like Goldman Sachs, Zoom, and Meta implement strict in-person work requirements.

4. Temp/Flex Staff Hiring

The dynamic nature of temp and flex hiring has introduced complexities that traditional recruiting strategies are unable to address effectively. How does one maintain a consistent pipeline of qualified candidates who are willing and able to take on short-term assignments? Unlike permanent roles, temporary positions often require quick mobilization of talent, forcing recruiters to swiftly match skill sets with client needs.

Recruiters also have to ensure job satisfaction and retention among these temporary workers, who might already feel less connected to the company culture or lack long-term career development opportunities. To avoid a high turnover rate, recruiters will need to step up to the challenge and cater to the unique motivations and expectations of temporary workers, all while balancing client demands with the need to maintain a motivated and stable workforce. They also have to reckon with labor regulations that throw a wrench in the mix, not only ensuring compliance but also satisfying their clients.

5. Competition and Market Saturation

Recruiters and staffing companies have to survive in a landscape where differentiation and strategic positioning are non-negotiable for sustained success. As more players enter the market, ranging from traditional staffing firms to online platforms and niche recruiters, competition has intensified across all segments of the industry.

The most salient challenge has been maintaining profitability amid price pressures. Increased competition often leads to downward pressure on fees and margins, as clients have more options to choose from and can negotiate more aggressively. This can strain the financial health of recruiting firms, especially smaller ones that may lack the resources to compete on price alone.

Market saturation further complicates matters by diluting the talent pool, as now you have numerous agencies vying for the same candidates, particularly in high-demand sectors or for specialized skills. Thus your recruiters must work harder to attract and retain top talent, which can culminate in increased recruitment costs and longer lead times to fill positions.

How do you build a strong brand presence and differentiated service offerings to stand out in a saturated market? For starters, staffing agencies need to clearly articulate their unique value propositions, whether through innovative technology solutions, specialized industry knowledge, or exceptional customer service. Building and maintaining client relationships is a priority, as repeat business and referrals often hinge on the perceived value and reliability of the staffing partner. 

Using Workstaff's staffing agency software can help ensure you find the right fit for your clients quickly, giving you a competitive edge in a crowded market.

Technology In Staffing

If one thing is apparent, it’s that technology resources have changed the face of recruitment and created new, interactive processes that allow recruiters and candidates to reach the required consensus.

From appropriate candidate tracking systems to online advertising, the most successful staffing enterprises and agencies use digital solutions to reach clients and customers.

Technology can help quantify success in your staffing agency and can open new doors of opportunity for you and your business, not only taking out guesswork but also giving you a chance to thoroughly review reports, read engagement levels, and generate key data on how to improve success metrics. Your success can be quantified in a format that is finally visible to everyone involved.

The most successful and profitable staffing firms are becoming highly automated. They are leveraging various technologies to offer differentiated services, speed operations, and lower costs. A new breed of automation technologies empower front- and back-office employees alike to automate routine tasks and drive efficiencies into the business without needing to be a programmer.

If you want to leverage technology to leave a massive impact on your business’s hard work, consider a tool like Workstaff that’s custom-built for recruiting and staffing enterprises.

Workstaff is an on-demand staff planning software that offers a simple way to search, book, schedule, and manage on-demand staff. Not only can you give your clients a customizable, user-friendly portal for effortless project and staff request sharing, but you can also promote collaboration and satisfaction by offering seamless project updates, instant messaging, and simplified staff request submissions.

Navigating The Future Of Staffing

As the landscape of work undergoes seismic shifts, so too must the approach to providing, finding, and retaining that work. Leaders in the staffing industry must forge business models that not only meet but exceed the complicated needs of today's employers and employees alike.

The stark truth remains: employees are leaving companies faster than replacements can be found — a challenge that staffing firms must solve as they seek to deliver unparalleled expertise and talent.

Where traditional and unconventional job opportunities clash in a strained labor market, staffing and recruiting agencies will need some help navigating these turbulent waters.

Want an easier way to track and communicate with your temp staff and clients? Contact our team today for a demo.