Staffing firms that adopted an AI strategy were the most likely to report revenue growth in 2023 (57%), followed by those who are experimenting with generative AI (51%), according to a new global report by Bullhorn.

The report noted that the figure is an indication of the firms’ overall willingness to adopt technology rather than direct revenue generation from AI. However, it added that in speaking with staffing firms, most predict that AI will be a regular part of every business by 2025.

While the majority of staffing firms are still just beginning to explore the possibilities of AI, top-performing firms are at or near 20% adoption of key AI tools, Bullhorn noted. They are more than twice as likely to report having AI driven tool in place for shift scheduling and credentialing, and 2.5 times as likely to be using it for gathering client requirements.

“Winners in this market are investing heavily in automating and applying AI to rote tasks that can easily be handled completely or in part by technology, like onboarding paperwork and gathering job requirements, the report stated. “That way, human beings can step in only when there is an exception or to perform a final review, freeing them up to focus on strengthening client relationships, pursuing new business opportunities, and offering higher-margin services like consulting.”

“Lower-performing firms are missing opportunities to automate repetitive tasks, to leverage AI to improve their talent and client engagement, and aren’t automating new lead engagement to the same degree,” the report stated. “Firms who get out in front on this trend and are early adopters of new technologies will enjoy a significant competitive advantage moving forward and remain winners.”

According to the report, high-performing firms relied on automation to improve productivity and efficiency. They are 2.4 times as likely to have automated gathering client requirements and 32% more likely to rely on automation to handle candidate screening. And Bullhorn data shows that firms that automate their processes see 39% more submissions per head and fill 22% more jobs.

Firms that saw revenue growth in 2023 tended to be linked to placing candidates in 10-19 days with 59% of the highest performers having placed candidates in 19 days or less.

In terms of addressing talent shortages, 42% of firms which saw revenue increase by 10% or more in 2023 said they are investing in technology to improve talent engagement.

Bullhorn’s data also showed that among the top strategic priorities for 2024, winning new clients ranks at the top (44%), followed by digital transformation (30%), candidate acquisition (also 30%), and strengthening client relationships (30%). Brand development and marketing (26%), improving the candidate experience (25%) and expanding into new markets and services (20%) are also top strategic priorities for 2024.

Meanwhile, the top market challenges for 2024 include uncertainty over economy and future growth (60%), increased competition from freelance/gig platforms (40%), worker shift to non-traditional labour models (24%), local and national legislative changes (22%) and increased compliance around credentialing (10%).