Should labor costs trend upward again, employers may be forced to pull back on plans for even short-term headcount like temporary workers. This means that the recovery of staffing employment is likely to be a bumpy one due to inflationary disruptions like elevated geopolitical tensions.
The recent rebound in staffing demand owes to months of progress on lower labor costs. While labor costs are high enough to limit growth across the labor market at large, they have meaningfully receded to a point where employers have the capacity to onboard some workers. At this point, hiring temporary workers is a preferable option because they can be brought aboard for a fixed period of time, allowing the employer to fill critical gaps without making long-term personnel commitments.
However, the downward trajectory of labor costs, as well as the consequent gains in temporary help services, could be short-lived. Tuesday’s Consumer Price Index report revealed a second major spike in inflation largely due to higher food and energy prices as a result of the conflict in Iran. Should the Strait of Hormuz remain closed indefinitely, higher labor costs are likely to follow as employers have to pay their employees more to maintain their cost of living. That is why labor costs usually tend to follow movements in CPI inflation.
Should labor costs trend upward again, employers may be forced to pull back on plans for even short-term headcount like temporary workers. This means that the recovery of staffing employment is likely to be a bumpy one due to inflationary disruptions like elevated geopolitical tensions. Staffing firms, having navigated this landscape for the past three years, will have to remain vigilant about acquiring new sales and demonstrating their value to clients while the labor market weathers this latest challenge.
With nine in 10 HR professionals reporting their organizations have no formal or informal recruitment programs targeting older workers according to SHRM, there is an opportunity for staffing companies to bring expertise in this domain to clients.
Despite anemic hiring demand, the U.S. unemployment rate is still relatively low, historically-speaking. This underscores the fact that in the long term, job growth may well be constrained by the availability of workers for open roles. One important driver of this trend is that the U.S. population, and by extension its workforce, is getting older. Nearly one-quarter of the labor force (23.1%) was 55 years of age or older in 2024, up from 15.6% in 2004. As the workforce evolves, employers must ensure all talent pools are open to them.
One barrier to employment for older workers is age discrimination. In a survey of employers by the Transamerica Institute, when asked about the age at which a worker would be too old to hire a majority said “it depends on the person” (56%) and handful were unsure (9%), but of the remainder that did provide an age, the median was 58 years old. According to a 2025 survey of U.S. adults aged 50 or higher by AARP, two-thirds feel it would be difficult to find a new job if they were looking for one today, and of those two thirds, 35% (the largest category) believe age discrimination would be the main factor causing difficulty in their job search.
Despite bias among at least some employers against older hires, a multigenerational workforce offers key benefits to employers. A study by LinkedIn and AARP found that workers aged 50 or older bring several key advantages to employers
At the same time, older workers have been increasingly investing in disruptive tech skill training as they seek to adapt to AI in the workplace. Data from LinkedIn Learning revealed that the gap between younger and older workers engaging in tech training narrowed from 31.1% in 2022 to 10.7% in 2025.
As the labor force continues to age and workers stay in the workforce longer, companies that optimize for multigenerational staff will be in the best position to compete for talent. With nine in 10 HR professionals reporting their organizations have no formal or informal recruitment programs targeting older workers according to SHRM, there is an opportunity for staffing companies to bring expertise in this domain to clients.
