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Updated: How could Trump’s executive orders impact staffing?

Updated: How could Trump’s executive orders impact staffing?

SIA Editorial Staff
| January 31, 2025
Silhouette of President Donald Trump
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(This story will be updated regularly. Please check back for more insights and information.)

With a flurry of executive orders issued almost immediately after he took office on Jan. 20, US President Donald Trump put corporate America on notice that business was likely to change. The global staffing industry is no exception — and it is preparing for what could be tumultuous upheaval.

Here are the administration’s new executive orders that are most likely to impact staffing sectors, according to SIA analysts and staffing industry executives.

Tariffs

On Feb. 1, US President Donald Trump signed three orders that were set to impose 25% percent tariffs on Canadian and Mexican imports and 10% on goods from China. If enacted fully, the tariffs are expected to raise prices for US consumers on automotive supplies and cars as well as certain foods. Trump also said tariffs may be imposed on goods from the European Union, Bloomberg reported.

On Feb. 3, Trump said he would pause tariffs on Mexico for one month. 

Possible impact. Tariffs often raise the costs of imported goods, which may hurt business growth at companies such as automakers.

As a result, staffing companies that supply workforce solutions to such companies may see some staffing demand decline.

“US manufacturers, especially automakers, rely on complex, border-crossing supply chains and tariffs are applied at each border crossing, leading to additive impacts on costs,” said Michael Schultz, economist at Staffing Industry Analysts. “Tariffs will squeeze profit margins, raise prices for consumers, and lead to lower employment and reduced production activity.”

Yet company cost-cutting may also lead to increased contingent hiring in regions with lower labor costs or non-tariffed regions, providing opportunities for staffing companies.

“The dynamic and fluid environment — tariffs announced, enforced briefly or not at all — all the uncertainty may encourage manufacturers to increase their reliance on temporary and contingent labor to mitigate cost impacts on their operations,” Schultz added. 

Tariffs could further complicate the US economic landscape, Giacomo Santangelo, economist at Monster, said in a press release.

“As many US companies contemplate relocating their operations from China, it remains uncertain whether these roles will return to the US, be automated or transition to other markets with lower labor costs,” Santangelo said.

Diversity, Equity and Inclusion (DE&I)

President Trump signed an executive order that dismantled DE&I initiatives within federal agencies and among government contractors. Executive Order 14151: Ending Radical and Wasteful Government DEI Programs and Preferencing led to the closure of DE&I offices, put affected employees on paid leave and terminated DE&I-related contracts.

Possible impact. This order could cut demand for DE&I training and consulting services, which staffing firms often provide. It could also alter hiring practices for government contractors, impacting staffing firms that ensure compliance with diversity requirements.

SIA’s calls to global staffing firms revealed that leaders were concerned and monitoring the situation, but they were not willing to speak publicly until there was more clarity.

There’s little indication that diversity initiatives will disappear, said Francesca Profeta, a research analyst at Staffing Industry Analysts.

“DE&I initiatives have become increasingly commonplace,” she said. “The World Economic Forum’s Future of Jobs Report indicates that these initiatives are especially popular among companies based in North America, with a 96% uptake rate. DE&I is not fading away; rather, it is evolving. Organizations that prioritize equity, inclusion and the well-being of their workforce will be better positioned to attract and retain top talent, ensuring long-term resilience and success in an unpredictable future.”

Read more: Trump order targets federal contractors over diversity

“The current labor market is marked by considerable uncertainty and a lack of confidence among both workers and organizations,” Santangelo said. “Recent executive orders issued by President Trump have the potential to significantly affect the workforce. One particular order seeks to reverse diversity, equity and inclusion initiatives, which could transform workplace dynamics.”

He continued, “Historically, many organizations did not prioritize DEI efforts until recent events highlighted their importance. Should these initiatives be rolled back, it is likely that more companies may opt out, potentially resulting in a less inclusive work environment. According to a poll conducted by Monster, 72% of workers indicated that DEI is ‘not very important to them,’ while 26% stated they might consider leaving their current employer for an organization that demonstrates a stronger commitment to DEI.”

Read more: ‘No change’ in diverse candidate demand yet, says legal exec search firm

Federal Hiring Freeze

President Trump signed an order for an immediate freeze on federal hiring, though some national security, public safety and military positions were exempt.

Possible impact. Since this order halts the creation of new positions as well as filling vacancies, staffing firms that supply temporary or contract workers to federal agencies could see a sharp decline in demand. More diversified companies may see less of an impact.

 “Our exposure to federal government is very low,” said Keith Waddell, Robert Half’s CEO, in response to a question posed during a conference call after the company released its quarterly financial results on Jan. 29. “In our public sector work, to the extent we do government work at all, it’s substantially state and local, not federal. And so, while we don’t have zero exposure, it’s a very small number.”

Return-to-Office Mandates

With Executive Order 14152: Return to In-Person Work, federal employees have been told to return to full-time in-office work, ending remote work arrangements.

Possible impact. This policy shift may cause private sector organizations to reevaluate their own remote work policies, potentially affecting the demand for staffing services related to remote work support and management.

RTO mandates can disproportionately hurt certain groups that include working mothers and employees with disabilities due to transportation and office accessibility challenges, said SIA’s Profeta, as well as potentially allowing for discrimination.

“Flexibility is now the norm, and organizations that impose strict workplace rules must be prepared for repercussions such as workforce attrition,” she said.

Read more: What will the new Trump administration mean for employers?

Trump could be positive for jobs market, Randstad CEO says

Immigration Policy Changes

The administration has issued several orders related to immigration that enable mass deportations and stricter visa regulations.

Possible impact. Staffing firms serving sectors that rely on immigrant labor, such as agriculture and manufacturing, may face challenges in sourcing adequate labor.

“These executive orders will result in far fewer available candidates to be placed in market sectors that rely on immigrant labor,” said Tim Szuhaj, SIA legal research analyst.

Monster’s Santangelo said immigration policies will impact construction, agriculture and efforts to rebuild after the Southern California wildfires.

“The deportation of these workers could disrupt supply chains and escalate costs, as demonstrated by the recent delays and challenges encountered in rebuilding efforts following the California wildfires,” he said

Federal Employee Buyouts and Workforce Reduction

To cut civil service employees, Executive Order 14150: Reforming the Federal Hiring Process and Restoring Merit to Government Service offers buyouts to almost all 3 million federal employees, encouraging resignations by Feb. 6.

Possible impact. A shrunken workforce may cut opportunities for staffing firms to supply temporary or contract workers to federal agencies.

This order, as with others, may be legally challenged, said SIA’s Szuhaj.

“In an unprecedented move, the new administration is aggressively reducing all DE&I initiatives and related employees, which will likely lead to individual lawsuits challenging this sweeping initiative,” he said.

Overall, these orders, if fully enacted, could influence the availability of talent and the demand for staffing services across an array of industries.