Workforce Solutions Ecosystem 2023
Workforce Solutions Ecosystem 2023
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Key Findings
After experiencing robust demand in 2021 and 2022 coming out of the pandemic, 2023 was a more challenging environment for many companies in the workforce solutions ecosystem, in light of inflation, high interest rates, global conflicts, and a pullback in demand from peak levels in the prior year. Nevertheless, due to demographic and structural factors, qualified workers remained scarce across many segments of the global economy, and demand for a range of workforce solutions remains strong.
We estimate the global staffing industry declined 2% in 2023 to a size of USD 640 billion. Nevertheless, we expect prospects to improve in 2024 with the global staffing industry expanding by 4%. The highly automated “staffing platform” model of staffing continued to gain traction in 2022, as such staffing revenue grew 58% y/y to reach $21.0 billion.
Online job advertising declined in 2023, with a range of job board companies laying off staff throughout the year. Nevertheless, trends were more mixed across a range of talent acquisition technologies, from VMS systems, to engagement platforms, to background check providers, to talent platforms. We estimate that talent platforms (that connect freelancers with work opportunities) grew 3% in 2023 to reach a market size of $17.3 billion.
A number of providers of payrolling and independent contractor evaluation and compliance appeared to see increasing business, with a growing focus on providing global capabilities, and substantial venture capital investments.
Rising use of artificial intelligence (AI), including generative AI, is expected to provide greater automation, lower costs, and find use cases and applications across many suppliers and vendors in the workforce solutions ecosystem.
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Why this matters
This annual report codifies and defines the various parts of the Workforce Solutions Ecosystem. It will be of use to those who operate within this Ecosystem and also those who procure services or products from it.