Based on our most recent Pulse survey, IT staffing continues to see a lackluster 2023, though the difference between participating smaller and larger IT staffing is still pronounced.

Median IT staffing revenue in the survey was flat (0%) year over year in August, yet aggregate revenue was down 9%, meaning year over year revenue at larger companies was more negative than that of smaller- and medium-sized respondents. This phenomenon has been true throughout 2023 not just in IT, but in most other staffing segments as well.

A net 3% of IT staffing firms in the Pulse survey reported negative revenue growth. A net 37% of IT respondents saw a decreasing trend in new orders in the last three months, though 26% expect a positive trend in the next six months. Net bill rate trends were flat in the last three months and expected to stay flat in the next six months.

In the most recent Pulse Survey, we also asked about internal staff layoffs across the staffing industry. Thirty-eight percent of IT staffing respondents reported laying off at least some internal staff in the second or third quarter of this year. For comparison, 36% of industrial respondents and 52% of travel nursing respondents reported layoffs. When broken out by the magnitude of layoffs, 23% of IT staffing firms reported that 1% to 5% of staff had been laid off, 12% reported 6% to 10% of staff, and only 4% reported more than 10% of staff had been laid off.

Among all segments with a large enough sample size, the IT staffing segment showed the lowest recruiting difficulty in August at 2.96 difficulty is measured on a scale of one to five, with five the most difficult). However, that figure is up from 2.63 in the previous survey. In the most recent Pulse, IT staffing also had the highest sales difficulty at 3.62, up slightly from 3.56 in the previous survey.

After an historically tight labor market seen in 2021 and 2022 in which recruiting difficulty was significantly high, as well as significantly higher than sales difficulty, the rare reversal of these figures in 2023 shows how much has changed this year.

In the September update of our US Forecast, we project a 3% decline in IT staffing revenue in 2023. Bill-rate growth is helping to offset volume declines, but business — especially at large companies — is being hampered by client selectivity and caution. However, some firms, both public and private, have noted they see a flattening (and in some cases increasing) trend in their IT staffing business. Furthermore, many IT staffing firms are referring to “pent-up demand” among clients that leave them optimistic about longer-term growth.

Whether we see a sequential uptick in IT staffing revenue, and whether we continue to see a gap between larger and smaller company growth, can be seen in the November Pulse Survey. Look for invites in the first part of the month, or visit our Surveys page for more info.