New orders, bill rates and more: Pulse report suggests growth ahead
CWS 3.0 - Contingent Workforce Strategies
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Staffing suppliers are integral to your ability to keep your organization supplied with the appropriate contingent workers, so it is imperative to keep informed about the challenges and opportunities they face and the conditions they are navigating in the market.
For example, providers participating in SIA’s recent Staffing Industry Pulse Survey expressed optimism that bill rates and orders will pick up in the next six months, indicating contingent workforce program will see increased contingent workforce use and costs.
The optimism that the providers have is not yet the same at the enterprise buyer level.
“Many organizations are still in a ‘hold pattern’ when it comes to the hiring of employees and contingent workers,” says Dawn McCartney, senior VP of SIA’s Contingent Workforce Strategies Council. “We were not sure if the Fed’s interest rate cut would prompt any movement, and although fairly new, most Council members we speak with are not seeing the rate cut sparking workforce demand.”
As McCartney noted in her keynote address last month at SIA’s CWS Summit North America, companies have cut back tremendously with projects, investments, technology and hiring; however, they cannot continue to withhold investing in their organizations, their products and services, and their people and still expect to remain relevant and competitive.
“Now we wait to see if it is the results of the US presidential election, another possible interest rate cut or the new year that brings that supplier optimism to a reality,” she says.
Here are trends discoverable within the report.
Provider Landscape
Bill rates. A net 1% of staffing firms reported an increasing trend in bill rates over the last three months, an increase from the -4% decrease cited in the July 2024 survey, which was based on activity in June. In addition, the net percentage of staffing firms expecting an increasing trend in the next six months more than doubled, rising to 13% in the September report from 6% in July.
Published every other month, SIA’s US Staffing Industry Pulse Survey Report provides contingent workforce program managers with insight into the supplier’s environment and how it affects their organizations. This article covers results from the September 2024 Update report, which is based on a survey of 185 participating staffing firms and reflects US staffing trends in August.
Spend on temp labor. Overall, spending on temporary workers through US staffing firms fell by a median 8% year over year in August among staffing firms participating in the Pulse survey, a further decline from the 4% decrease in June. However, all staffing segments outside of healthcare were flat or up sequentially in August compared to June.
Per diem nursing saw the biggest year-over-year decline in median revenue, down 26%, followed by travel nursing, down 23%.
On the flip side, locum tenens staffing posted the largest increase, up 7% year over year. The engineering and industrial skill segments also saw increases, up 5% and 4%, respectively.
Growth was flat in four segments: IT, finance/accounting, legal and marketing/creative. Direct hire revenue was also flat year over year.
Labor market balance. Average sales difficulty decreased to 3.52 in August from 3.58 in June (on a scale of 1 to 5). Meanwhile, average recruiting difficulty at 3.01 in August is in line with the 3.00 reported in the previous survey. Recruiting difficulty minus sales difficulty remains negative, indicating an unusually loose labor market after a period in which it was historically tight.
New orders. The survey found new orders increased a net 22% in the last three months, up from a 20% increase reported in the previous survey for the July report. And staffing firms expect the market to heat up further, with a net 59% of staffing firms in the September survey reporting they expect an increasing trend in the next six months, up from 55% in the previous survey.
Biggest Challenges
The survey for the September Pulse report also asked firms about the biggest challenges their staffing firms are currently facing. Difficulties finding new business/job orders topped the list, cited by 90% of firms, while 19% mentioned difficulty finding/retaining talent and 15% referred to bill rates being down/not keeping up with cost increases.
For the biggest challenges question, 122 firms responded; the full survey included 185 staffing companies. The survey was conducted in September.
“This report helps to inform contingent workforce buyers. Understanding the opportunities and the challenges that your staffing partners have allows you to be a more educated buyer and better partner,” Matt Norton, says SIA’s workforce solutions research director. “This not only benefits your program and your organization but also benefits the staffing partner and contingent workers. The results highlights some positive signs for the coming months after a sluggish 2024 to date.”
The survey for SIA’s most recent Pulse Report included responses from 185 staffing firms that conduct business in the US. CWS Council members can download selected highlights of the US Staffing Industry Pulse Survey Report: September.
