US Staffing Industry in Review 2021
Remote work, vaccine mandates, and COVID-19 restrictions have been dominant trends within the US staffing industry in 2021. But it's not all doom and gloom, huge opportunities have arisen thanks to surging demand for recruiters help to source quality candidates in the midst of the talent shortage and great resignation.
Not only this, but the ability to source talent with minimal geographical restrictions amongst the 50 US states due to clients being more open to remote work has heightened opportunities.
Watch our video above for a snapshot of what's been happening in the US staffing industry in 2021 from our Director of Strategic Operations and Growth, Amy Davies, or keep reading, to help you review and plan for 2022.
US Recruiters Have Access to a Larger Talent Pool
A large number of contractors were working remotely work in the US in 2021, meaning the majority of recruiters now have access to a much wider talent pool across the US and the ability to source high-quality candidates beyond domestic borders.
End clients have become much more comfortable with hiring their contractors on a remote working basis. Remote work has consequently reduced costs for remote hiring end clients, as they no longer need to pay for office space and equipment.
US Temporary jobs Increased for the Majority of 2021
US temporary help services jobs increased for the majority of 2021, further highlighting the demand for contract staffing. For example, according to Staffing Industry Analysts, temporary jobs increased by 49,000 in February 2021, 35,000 in June, 10,600 in August, and 5,200 in September, on a month-on-month basis.
Some of the most in-demand temporary staffing skill segments within the US staffing industry in 2021, included, technology and IT, life sciences, marketing/creative, and finance. With the momentum built in 2021, revenue generated by these temporary skill segments is only expected to grow higher in the US staffing industry in 2022.
The ‘Great Resignation’ and US Talent Shortage is Boosting Demand for Recruiters
A record 4.4 million Americans left their jobs in September 2021, accelerating a trend that has become known as 'The Great Resignation.' In fact, in September 2021, the number of US workers who quit their jobs exceeded pre-pandemic highs for six straight months. To add more context to the situation, there were a record-breaking 10.9 million open vacancies in the US at the end of July, with it only dropping to 10.4 million in September.
The ‘Great Resignation’ opportunity for recruiters
Despite these alarming numbers, recruiters should be looking at the bright side as it is making the US staffing industry a great place to be operating within. Companies struggling to fill positions are likely to turn to the experts at sourcing talent… recruiters.
The Great Resignation brings with it an opportunity for recruiters to increase their revenue by offering a contract solution to their clients in the US. More than ever, companies need to fill vacant roles fast, and one way to do this is by engaging contractors.
Trending: The talent shortage in the US
In addition to the rising resignations companies faced in 2021, a talent shortage has been trending in the US. The talent shortage in 2021 was driven by:
The availability of federal unemployment benefits
Enhanced federal unemployment benefits, part of the $1.9 trillion American Rescue Plan, provided unemployed US citizens with an extra $300 weekly in payments in response to the pandemic. These benefits were still available in the majority of states during the first half of 2021. As a result of this supplemented income, many workers chose not to return to the workforce.
In an effort to encourage Americans to return to the workforce, federal unemployment benefits ended in over 26 states in June 2021, before their scheduled end date on September 6th. Despite this, the US Chamber of Commerce’s poll involving 529 Americans who become unemployed during the pandemic, found that in November, 53% stated they are only somewhat active, or not very active at all, in looking for work.
Post pandemic hiring growth
Companies are ready to hire again as post-pandemic growth continues. This has increased the urgency in the search for quality talent.
Candidate uncertainty
Some candidates are uneasy about leaving their current jobs due to the threat of COVID-19 new variants and general uncertainty surrounding restrictions still relevant.
City shortages
During peak lockdowns, people fled traditionally popular cities in favor of areas that gave them a better quality of living. Not only this, but some candidates do not want to return to offices and favor remote work. This has resulted in application shortages for roles that require in-person candidates.
Vaccine mandates in the US
COVID-19 vaccine mandates in some states are causing a decrease in the availability of workers.
All these factors increased hiring difficulty for employers in the race to secure and retain top talent in 2021. As a knock-on effect, many hiring managers are seeking help from specialized staffing agencies to secure skilled professionals, especially for IT specialized roles.
States and Companies Offered Incentives to Lure Talent in 2021
Company sign-on bonuses
The intense competition for talent pushed companies in the US to offer sign-on bonuses, especially for specialty jobs. GlobalData witnessed an enormous 454% increase in job advertisements across all sectors offering sign-on bonuses. Some companies have resorted to offering up to $100,00 to attract quality candidates.
State incentives to improve unemployment rates
A huge 91% of state and local chambers of commerce stated that worker shortages are holding back their economies during 2021. Instead of paying the unemployed federal benefits, over 10 states decided to offer return to work bonuses to bridge the gap between vacancies and those willing to work. Many of these incentives we're still on offer up until September 2021.
For example, Colorado's program offered up to $1,600 incentive payments to unemployed people who return to work full time, which reported initial success. According to the state's department of labor, over 14,100 people applied for the program by the end of June.
Despite a large number of unemployed Americans still not keen to return to the workplace in the US Chamber of Commerce’s November poll, a hiring bonus was one factor that may change their mind.
Additionally, 46% of unemployed Americans stated a hiring bonus of $1,000 remains the top incentive most likely to encourage them back to the workplace in November, up from 39% in May. Remote work and flexibility were also still attractive incentives to many unemployed Americans.
COVID-19 Vaccine Mandate in the US
On September 9th, 2021, President Biden signed an Executive Order requiring employers of 100 or more employees to implement and enforce a mandatory COVID-19 vaccination policy (Vaccine Mandate).
The president announced that any employers with more than 100 workers would need to make sure that all their workers were vaccinated and if they chose not to get vaccinated, they are required to get tested weekly, at their own cost, and provide proof of a negative COVID-19 test.
Enforcement of the vaccine mandate halted and uncertain
We have probably seen one of the biggest fightbacks among the states that we've ever seen in history. Since November 5th, 2021, multiple legal challenges have been filed in federal circuit courts throughout the United States. Although the Federal Court in the 5th Circuit has halted the enforcement of the Vaccine Mandate, there is still an immense amount of uncertainty around whether the mandate will be upheld.
We'll continue to monitor the situation
We will continue to monitor developments and provide updates accordingly for our clients. In the meantime, it is best to keep up to date with the OSHA website for more information concerning the vaccine mandate in the US.
US COVID-19 Travel Restrictions Lifted in November 2021
For the majority of 2021, COVID-19 travel restrictions put in place in March 2020 on non-immigrant visa holders into the US were still in place. To many international businesses’ delight, these restrictions were lifted on November 8th, 2021.
There are still rules and terms of entry into the US, including vaccination status and the presentation of a PCR test, which could change by the time of reading.
The lifting of the travel ban is great news for international recruiters considering making placements in the US staffing industry. Those interested in the US can now go out in search of potential office space and recruit new team members who are American nationals over there.
US visa wait times for international recruiters
One of the big impacts of the US travel restrictions in 2020 and 2021 is the knock-on effect it has had on wait times for visas. A lot of our clients who relocate their recruiters from the UK to the US have experienced increased wait times. Pre-COVID, typical wait times would be approximately two months for an E visa. We are now seeing wait times going up to 9 to 12 months.
The reason for this is that there needs to be a face-to-face appointment at a US embassy to secure an appointment, so the embassies are still working their way through a massive backlog. However, due to widespread vaccination uptake and easing of restrictions, we are hopeful that in 2022 US visa wait times will reduce.
One takeaway from 2021, is that if you have plans to physically land and expand by placing contractors in the US staffing industry in 2021, or you have got intentions to relocate employees over to the US, it is worth starting your plans now to make the US visa process as easy as possible. You can begin this process by seeking advice from an immigration lawyer.
US Staffing Industry in Review 2021: Revenue Reached Record-Breaking Levels
With the race for quality talent heating up in 2021, and companies still struggling to fill positions throughout the US, the stage is set for demand for recruiters in the US staffing industry to continue to soar in 2022.
Staffing Industry Analysts originally estimated that by the end of 2021 US staffing revenue will grow by 16%, to reach a record total of $157.4 billion. The final 2021 US staffing revenue figure, ended up being much higher than expected at $177.1 billion. In addition to this, nearly all segments experienced double-digit growth.
If you’re not yet operating in the largest staffing market in the world, the US, or want to offer your clients a greater pool of talent, there is no better time than now to get started. Our employer of record solution empowers you to make compliant contract placements in any state.
Want to Learn the US Staffing Trends for 2022 & 2023?
The US staffing industry is only set to grow in 2022 and 2023. Learn more insights on how the US could be part of your growth plans in our US Staffing 2022 & 2022 - Temporary Trends to Watch Report.