The past few years have been a whirlwind for the staffing industry. After a boom period from 2020 to early 2022, growth has drastically slowed down over the past 18 months. But as interest rates stabilize, inflation cools, and the economic outlook begins to look brighter, many believe the staffing industry is poised for a rebound.
The team here at Sense wanted to know exactly what the future holds so we went to the source and asked more than 130 staffing leaders for their insights on a variety of topics. The results of our survey are compiled in our “2024 State of Staffing Report” along with a detailed analysis of the key goals, challenges, and metrics driving staffing strategies.
In this blog post, we’ll reveal the high-level trends from the report that will shape the staffing industry in the coming year.
The overall sentiment among our survey respondents can be described as “cautiously optimistic.” A staggering 91% of respondents are anticipating their firms will grow in 2024, with the majority aiming for modest growth targets between 10-20%. About a third of respondents are hopeful they’ll grow as much as 30%.
But despite the optimism, staffing leaders are aware that their challenges aren't fully behind them. Even with the economy showing signs of resilience, some headwinds persist. Nevertheless, the positive outlook suggests that the worst is over and the industry is set for a gradual recovery and renewed growth in the coming year.
As the staffing industry prepares for a year of growth, it's no surprise that staffing leaders have their sights set on winning new business and boosting revenue in 2024. Over 60% of survey respondents identified client acquisition as their top priority, significantly ahead of other goals like increasing client retention, improving productivity, and reducing costs.
After navigating a period of slow job growth, staffing firms are now eager to capitalize on the expected economic recovery and expand their businesses. However, sales and marketing efforts present their own set of difficulties that are apparent in other trends from our survey (more on that to come).
While optimism is high, the reality is that running a staffing firm and recruiting talent remains incredibly challenging. Our survey respondents revealed a wide range of hurdles they anticipate they’ll face in 2024.
Attracting new clients topped the list of challenges, again reflecting the industry's focus on growth. It was followed closely by numerous other challenges, including sourcing talent, increasing efficiency, and staying ahead of the competition, to name a few. The obstacles facing staffing firms are vast and extend across the business from growth and client services to internal operations and talent acquisition.
The takeaway from this trend is clear—firms will need to be adaptable in 2024 and constantly evolve their strategies to overcome challenges and take advantage of the opportunities this year will bring.
With client acquisition emerging as the top goal and challenge heading into 2024, it was important we also gain insight into the sales and marketing process. Decreased demand for staffing services came out as the top challenge for the second consecutive year—cited by 38% of our survey respondents. However, we can expect this challenge to subside in 2024 if the staffing industry does indeed rebound.
Generating sales leads, long sales cycles, and increased competition are other obstacles that are hindering business growth for staffing firms. These challenges are likely here to stay and will require sales and marketing teams to leverage the right technology to connect with potential clients, automate the sales process, and provide personalized messaging that aligns with each prospect’s needs and goals.
The focus on client acquisition might be the most prevalent staffing trend of 2024. If staffing leaders hope to drive growth, they must embrace technology to overcome these challenges and meet ambitious sales targets.
As we move into 2024, attracting the right talent is a critical trend for those focused specifically on the recruiting side of the business. Our survey results show that a majority of recruiting teams are prioritizing quality over quantity, aiming to identify individuals who best fit their client's needs.
However, achieving this goal will be difficult. Nearly half of our survey respondents cited sourcing as the most time-consuming stage of the recruiting process. Further adding to this challenge, 52% of respondents reported a decline in job board effectiveness, indicating that they’ll need to explore alternative candidate-sourcing methods to connect with in-demand talent.
Another trend that emerged from our survey is that candidate expectations are on the rise. Candidates have always expressed frustration with lengthy hiring processes and infrequent communication but poor experiences will likely lead to even more drop-off and ghosting in 2024.
AI-powered recruiting automation is the key to attracting the right talent and providing them with an outstanding experience at each stage of their journey. It helps recruiting teams make more placements while personalizing the recruiting experience for individual candidates.
Artificial intelligence (AI) has taken the world by storm and its impact on the staffing industry has been undeniable. AI solutions became commonplace in recruiting and staffing in 2023, with an astonishing 75% of survey respondents saying they use either free Generative AI tools or comprehensive AI-powered platforms like Sense.
Beyond its current applications, three-quarters of our survey respondents believe AI will revolutionize recruiting in the future. But in reality, recruiting AI is already transforming how staffing professionals work and engage talent.
Looking ahead to 2024, AI is poised to play even more of a pivotal role. Here are a few ways staffing professionals can use it to overcome challenges and capitalize on trends:
The AI revolution is already upon us. Staffing firms must embrace it to outpace the competition and connect their clients with great people.
See how Sense AI can change how you attract, engage, and hire talent
There are exciting times ahead for the staffing industry. New opportunities and emerging technology will position forward-thinking firms to acquire new clients, attract top talent, and grow and thrive in 2024 and beyond.
We’ll conclude with a quick recap of the “2024 State of Staffing Report” statistics featured throughout this blog post:
Want to dig into these trends more? Check out the "2024 State of Staffing" Report.
