More than half of recruitment firms, 55%, began experimenting with artificial intelligence in 2023, according to Bullhorn’s Global Recruitment Insights and Data 2024 Industry Trends report. However, firms that were experimenting with AI were 31% more likely to see revenue gains than firms that had not begun experimenting.

“Last year was a challenging one for many staffing firms, but as we look ahead to a brighter future, there are some lessons that the entire recruitment industry should pay attention to,” Gretchen Keefner, senior VP of global enterprise business at Bullhorn, said in a press statement.

“Staffing firms that make the most of technologies such as AI and automation are, and will be, in a better position to lower margins, increase productivity and differentiate their businesses from the competition,” Keefner said. “Forward-thinking firms are looking at technology to help candidates find the best-fitting roles, help clients get workers on the job faster and win more clients.”

High-performing firms had higher adoption rates of AI tools overall, suggesting their early adoption of AI further enhanced productivity and profitability, according to the report. The firms were more than twice as likely to report using AI-driven tools for shift scheduling and credentialing.

The report also found that in 2023, the number of staffing firms reporting revenue growth declined for the first time in three years. However, despite market headwinds, 17% of respondents still reported a revenue increase greater than 10%.

Meanwhile, 65% of recruitment firms expect their revenue to increase this year. However, uncertainty over the economy remains a top challenge for 60% of respondents. Aligned with the outlook, staffing firms’ top priority this year is winning new business, cited by 44% of respondents, followed by digital transformation, candidate acquisition and strengthening client relationships.

The report includes responses from more than 1,400 staffing and recruitment professionals across industries globally and was conducted in late 2023.