A new report by staffing software supplier Bullhorn found 79% of staffing and recruiting firms globally expect revenue to increase this year despite persistent concerns and challenges related to tight talent pools candidate-driven market and economic conditions, and macroeconomics and politics.

Looking at just North America, expectations for revenue, budgets, investments and placements in 2019 are all higher than they were heading into 2018.Twenty-five percent of respondents in North America expect revenue to increase more than 25%; just 1% expect to see revenue decrease in the year ahead. And less than 3% of respondents expect to see decreases in temp placements, budgets, tech spending, efforts to reskill workers and VMS business.

Bullhorn’s 2019 Global Recruitment Insights and Data research report also found 84% of global recruitment firms feel the need to embrace digital transformation — defined as the integration of technology into all areas of their business for the purposes of improving operations and the way they deliver value to customers — to remain competitive. And more than half of the survey’s respondents, 55%, believe that artificial intelligence will have a positive impact on candidate and customer engagement.

Although a majority of firms globally reported digital transformation will drive their business further, sourcing and acquiring candidates is the top priority for 2019, cited by 61%, followed by candidate engagement at 36%.

Top challenges include tight talent pools and skills shortages and gaps, cited by 73%; accelerating pay increases due to candidate-driven market and economic conditions, cited by 38%; and higher churn rates due to low unemployment, cited by 27%.

The report is based on a survey of 2,185 recruitment professionals. It was conducted from Sept. 11, to Nov. 30, 2018.