Staffing suppliers are key to the success of your program, making it imperative to stay informed about their challenges and opportunities. They currently face several headwinds as sales difficulty reaches a record-high level and optimism trends downward regarding bill rates.

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 May 2024 Update report, which is based on a survey of 177 participating staffing firms and reflects US staffing trends in April. 

The Pulse Report is a great resource for enterprise buyers, according to Dawn McCartney, senior VP, CWS Council at SIA.

“Although enterprise buyers may not be engaging new contingent workers, many still have contingent workers on active assignments,” McCartney explains. “Ensuring that they are aware and informed of any challenges their staffing providers are facing is critical. Buyers want to make sure they do not find out unexpectedly that there may be an issue that would impact the worker or the project’s completion.”

Provider Landscape

Bill rates. The report offers some insight into bill rates. A net -7% of staffing firms reported an increasing trend in bill rates over the last three months, down from a 4% increase cited in the prior survey for the March 2024 report, which is based on February activity; additionally, the net percentage of staffing firms expecting an increasing trend in the next six months fell to 11% in the May report from to 18% in March. 

Spend on temp labor. Overall, spending on temporary workers through US staffing firms fell by a median 1% year over year in April among staffing firms participating in the Pulse survey, up from a 5% decrease in February. The aggregate decrease in their US temporary staffing revenue was unchanged from the prior survey at 13% in April, with larger staffing firms performing comparably worse than smaller ones.

Of note, however, median growth was positive or flat in all skill segments outside of healthcare.

Skill segments posting positive median revenue growth include locum tenens, up 21%; engineering, up 3%; and industrial, up 2%. On the flip side, the biggest declines were in the travel nurse staffing and per diem nursing skill segments, down 21% and 3% respectively.

Growth was flat in four segments: allied healthcare, legal, life sciences, and marketing/creative. Direct hire and retained search revenue was also flat year over year.

Labor market balance. Average sales difficulty increased to 3.67 in the May survey from 3.56 in March (on a scale of 1 to 5), reaching its highest level since SIA began tracking such data in 2013, outside of the start of the Covid-19 pandemic. Meanwhile, average recruiting difficulty increased to 3.18 from 2.94. 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 4% in the last three months, down from a 7% increase reported in the previous survey for the March report; a net 39% of staffing firms surveyed for May’s report expect an increasing trend in the next six months, down from 58% in the previous survey. 

Suppliers’ Challenges

The most recent Pulse survey also queried participants about actions taken in response to the current challenging staffing environment. Overall, the most common action taken was increasing sales headcount, cited by 55% of respondents, followed by increasing marketing spend and offering internal incentives for new business wins, both cited by 46%. The least common action taken was decreasing marketing spend at 8%.

Survey participants were also asked, “What is the biggest challenge that your staffing firm is currently facing?”

Of the 123 companies responding to the question, 51 companies, 41%, pointed to difficulties finding new business/job orders. Sixteen companies, 13%, referred to lower bill rates/pay rates. Eight companies, 7%, mentioned client delays.

By segment:

Commercial. Nineteen of the 33 responses, 58%, referred to difficulties finding new business/job orders.

Healthcare. Ten of the 42 responses, 26%, mentioned difficulties finding new business/job orders, and eight companies, 19%, pointed to lower bill rates/pay rates.

IT. Eight of the 20 responses, 40%, pointed to difficulties finding new business/job orders, and four responses, 20%, mentioned client delays.

Other professional or multi-segment. Fourteen of the 28 “other” responses, 50%, referred to difficulties finding new business/job orders.

The survey for SIA’s most recent Pulse Report included responses from 177 staffing firms that conduct business in the US. Selected highlights of the US Staffing Industry Pulse Survey Report: May 2024 Selected Highlights are available for download to CWS Council members.