Engineering has been a bright spot in the staffing industry in 2023, according to SIA’s recently published update of the US Staffing Industry Forecast. Engineering is forecast to expand 5% this year, making it one of few segments in the US staffing industry that is expected to grow. In fact, the overall staffing market is expected to decline 10%.
Among staffing companies with sizable engineering businesses, SThree and Bartech (part of Impellam Group) all reported strong increases in gross profit for the first half of the year in segments relevant to engineering. SThree reported 23% growth in gross profit from its US engineering sector year over year, with increased demand for project management and electrical engineering roles. Impellam reported its engineering and science business in North America increased 6.8% on a constant currency basis. Impellam’s engineering business is primarily focused on electric vehicles, though the company is also planning to expand into renewables.
The engineering segment has weathered economic headwinds and market uncertainty well due to a handful of factors, including:
- Increased federal funding for many construction and manufacturing projects that call for engineers, which is expected to continue into 2024.
- The broad-based nature of the segment, which places engineers with a wide variety of skill sets across a number of industries, insulating it from weakness in particular industries.
- The highly specialized nature of many jobs in this category, which makes it difficult to substitute talent and also increases competition for skilled employees.
- Ongoing backlogs of engineering projects.
In particular, companies that specialize in engineering staffing have benefited. Increasing demand for talent with very specific skillsets and shortage of workers is leading employers to search for partners who are able to help them target the right people with the right offers. In some cases, clients are also willing to pay more for placement services.
Given tight labor market, candidates are looking for agencies with deep subject matter expertise in their field that understands their needs. The SIA North America Temporary Worker survey suggests that specialist firms may also be attracting the most talent. More than 80% of temporary workers making above $30 an hour have stated that they prefer working for an agency that specializes in their skill, and engineers fall firmly in this range.
It remains a candidate’s market, with more engineering jobs available than there are employees to fill those positions. Candidates have greater bargaining power, increasing wage growth for engineers at rates that are a bit stronger than the industry average. There has also been a slight shift away from temporary staffing contracts in favor of permanent arrangements. While in some cases this shift has been driven by talent looking for a greater sense of job security, in other it has been due to the employers themselves hoping to foster a greater sense of loyalty in order to retain talent for longer.
Beyond financial perks, talent is in the driver’s seat regarding where they work and what they work on. Engineers are currently prioritizing flexibility and quality of life, with great value placed on fully remote/hybrid positions as well as on roles they find interesting and personally rewarding. While pay and benefits remain important considerations, 40% to 50% of respondents to Airswift’s 2023 Global Energy Talent Index as cited the ability to work on exciting projects and sense of contributing to society as top contributors to job satisfaction. Candidates may be willing to switch to a new role if it provides with a greater sense of personal satisfaction or is an interesting project.
To see if engineering staffing finishes the year strong, participate in our next Pulse survey, which is scheduled to take place in November. Keep an eye out for invite emails in the first half of the month, or visit our surveys page.
