According to the May 2023 Pulse Survey Report, year-over-year revenue growth for engineering staffing firms was down a median of 2%, in line with temporary staffing overall. This drop represents a 7% deceleration from the February survey and continues a trend that began at the turn of the year following a strong fourth quarter 2022.
Over the last three months, a net 10% of engineering staffing firms have seen increases in new orders, but a similar number also saw increases in unfilled orders. Combined with stagnation in bill rates, a net 11% of firms saw downward trends in gross margin percentage.
Nevertheless, firms appear optimistic that the second half of the year will provide some turnaround, with a net 45% of companies predicting that new orders will trend up and a net 6% forecasting that the number of unfilled orders will decrease. That is the first time this year that firms have forecast trends that diverge from those experienced in the trailing three months.
Data from the June 2023 US Jobs Report support this optimism. Natural resource and mining employment continued to trend upward at a steady clip, rising 7.2% year-over-year from May 2022 to 643,000 jobs.
Increases in jobs and orders point to continued growth in demand for engineering staff. However, talent shortage and potential mismatch between the types of jobs on the market and the available skilled candidates is putting pressure on staffing. This task is made even more difficult by the fact that many candidates are seeking stability in longer term contracts and full-time roles.
Discussions of how generative AI will impact industries have skyrocketed after ChatGPT entered the marketplace at the beginning of the year. To help understand the impact of AI, our May Pulse Survey asked participants how they expected the incorporation of AI to affect their firms’ staffing levels over the next three years. Though not much data specific to the engineering sector was collected, those responses that were received indicated a neutral to negative outlook, with two responders stating the effect would be neutral and two stating it would reduce staffing levels overall.
While AI technology will undoubtedly change the landscape of the engineering and energy sectors, SIA predicts that jobs in these sectors are among those that are likely to see the lowest levels of disruption. Analytical and creative thinking — such as that needed to generate new models or solutions to complicated problems — are the two employee skills that are most increasing in importance, according to the World Economic Forum’s Future of Jobs report. Additionally, using AI to reduce the need for engineers to perform low-value or dangerous tasks (according to one of the top five oil and gas operators, engineers spend 60% of their time searching for information) could increase job satisfaction and alleviate staffing shortages.
Provide your input on whether predictions will bear out and engineering staffing firms will see an improvement moving into the second half of the year by participating in the next Pulse survey, which will be in July. Keep an eye out for invite emails in the first half of the month, or visit our surveys webpage.
