In the immediate aftermath of the Fed’s tightening cycle, staffing segments that are interest rate insensitive, such as light industrial, are likely to drive the industry’s recovery. However, in the long term, personnel-dependent segments, such as health care, will become the greatest proponent of its growth.
Identifying the next twist or turn in the trajectory of staffing employment requires knowing the next twist or turn within the labor market at large. As an industry acutely dependent upon labor demand, trends in staffing employment often follow those where job opportunities and hiring are greatest. Therefore, when considering the outlook for staffing employment in 2025 and beyond, it helps to examine the trajectory of labor demand within its five major verticals: health care; office–administrative; industrial; engineering, IT, and scientific; and professional–managerial. (Though the U.S. Bureau of Labor Statistics uses slightly different sector definitions as illustrated in the chart below.)
As the U.S. continues to transition toward a service-oriented economy, labor demand in light industrial has waned relative to other sectors. Similarly, growth within professional–managerial labor demand has also lagged given increased entrepreneurship as well as productivity eroding away at a naturally concentrated cadre of employees. Conversely, labor demand in office–administrative services, professional, scientific, and technical services, as well as professional–managerial services has doubled, or even tripled levels seen in the 1990s, and will drive staffing employment for the foreseeable future.
Ongoing disruptions engendered by technological advancements are likely to slow labor demand in professional, scientific, and technical services, as well as professional–managerial services as clients better understand long-term headcount needs. However, headcount will remain a serious challenge within the healthcare sector as rapid turnover and increased demand require more personnel. In the immediate aftermath of the Fed’s tightening cycle, staffing segments that are interest rate insensitive, such as light industrial, are likely to drive the industry’s recovery. However, in the long term, personnel-dependent segments, such as health care, will become the greatest proponent of its growth
As many are aware, staffing firms have been struggling due to reduced demand for talent. The playbook walks you through why this has been the case and how the industry has chosen to adapt, all to help you and your organization make informed, data-driven decisions.
The much-anticipated 2024 ASA Staffing Industry Playbook was released just last week. The playbook provides an overhead view of important insights relevant to the staffing industry—tailored to help your company understand the trends and drive growth. This year’s issue delivers double the data and analysis as well as a sleek new online interface.
The playbook is divided into three sections of interest focused on trends within the U.S. economy, labor market, and staffing industry. For example, and as many are aware, staffing firms have been struggling due to reduced demand for talent. The playbook walks you through why this has been the case and how the industry has chosen to adapt, all to help you and your organization make informed, data-driven decisions:
Year-to-year increases in wages and salaries are still historically elevated compared to pre-pandemic rates of growth. Workers have sought higher compensation to outpace inflation but many lack the confidence to leave their job to seek another opportunity. This had led to increased labor costs and lower labor turnover, both adverse trends that depress hiring and demand for temporary employment services. In response, staffing companies have pivoted to diversifying their streams of revenue (especially via specialty services) to make up for lost income. Staffing professionals, however, are somewhat polarized as to whether different nontraditional services raise or lower revenue. For instance, consulting services as a revenue stream top both lists of professionals who agree it has a positive (34%) and negative (27%) impact on revenue. For more insights, be sure to check out the 2024 ASA Staffing Industry Playbook.
