A delayed post-Covid recovery partially due to historically low oil prices notwithstanding, 2021 and 2022 have been solid years for the engineering segment. Per the US Staffing Industry Forecast: September 2022 Update, we estimate engineering staffing segment revenue was up 10% in 2021 and project a similar 9% for 2022. The talent shortage has carried over to the engineering segment, and technical and digital skills are in high demand. Engineers are increasingly valuing fully remote or hybrid positions. Projects are still going strong; oil prices have been on a downward trend since the summer but nonetheless remain above their 2021 levels.
This aligns with what we saw in the US Staffing Industry Pulse Survey Report: July 2022, where the engineering staffing segment revenue was up a median 10% year over year in June. A net 31% of engineering staffing firms reported an increasing trend in new orders over the last three months, while a net 38% expect an increasing trend in new orders in the next six months. A net 53% saw an increasing trend in bill rates over the last three months, corresponding with the phenomenon of wage inflation seen across most staffing segments.
The TechServe Alliance reported engineering employment up 4.04% year over year in August. And as seen in the September 2022 Jobs Report, natural resources/mining employment came in at 641,000 in August, up 11.7% year over year. However, natural resources/mining jobs have yet to fully recover to their pre-pandemic level (down 6.6% in August 2022 compared to February 2020).
As engineering workers are increasingly valuing flexibility in their current positions, they are also increasingly looking toward other opportunities. Per the GETI Report 2022, more and more engineering talent are considering a switch to the renewables sector within engineering, as ESG has become a key driver of career decisions. Furthermore, some talent are considering leaving the engineering industry altogether, with their top target being roles in the technology field. This leaves room for new talent to enter, and it presents an opportunity for the IT industry to add to its talent base.
Though the industry is going through change, there is stability at the top. The top six firms by 2021 revenue in the Largest Engineering Staffing Firms in the US: 2022 Update are the same as those seen in last year’s report (with the second and third highest swapping in the two years). Overall, we estimate 25 firms generated at least $50 million in engineering staffing revenue in 2021, with combined revenue of $5.4 billion accounting for about 69% of the engineering staffing market. Actalent (Allegis Group) was by far the largest by engineering staffing revenue ($1.2 billion), followed by System One ($551 million) and Kelly ($490 million).
Be sure to participate in the next largest staffing firms list process; look out for email invites in the first part of 2023 to share your 2022 engineering staffing revenue and appear on our engineering list.
And to get an idea on how engineering staffing has fared in August, check out our September Pulse. To participate in future Pulse surveys (the next one will be in November), keep an eye out for invite emails or visit our Surveys webpage.
