US Staffing Industry Trends to Watch 2022
Looking at the overall global staffing is a great starting point when trying to figure out the US staffing industry forecast for 2022. The US is still number one for staffing revenue worldwide and is set to continue that reign. This blog provides a snapshot of the latest data available, you can also watch the above video where PGC’s Director of Strategic Growth, Amy Davies, runs through the US staffing industry trends to watch out for in 2022.
The US Market Still Dominates the Global Staffing Industry
According to Staffing Industry Analysts (SIA), Global Staffing Market Estimates & Forecasts in 2020 the global staffing industry generated $445 billion in revenue, with the US, Japan, and the UK accounting for over 55% of that revenue. Over 31% of global staffing revenue was generated in the US alone, highlighting its global dominance which is only set to grow further in 2022 after the peak demand the industry has experienced in 2021.
Temporary and contract staffing still dominates in the US staffing industry with over 85% revenue share, as stated by Statista. Within temporary staffing, IT occupations contribute the largest amount to revenue with this segment expected to reach record highs in 2022 due to the demand for IT and tech talent within the US.
(SIA Global Staffing Market Estimates & Forecasts, May 2021)
US Staffing Industry 2021 Trends to Watch
The US staffing industry was worth a record $177.1 billion in 2021 according to SIA. The original estimate in September 2021, predicted that the US staffing industry would reach a record size of $157.4 billion in 2021. In May 2022, the final revenue size of $177.1 billion was 12.5% higher than expected.
Nearly every skill segment of the industry experienced double-digit growth on the back of record demand by the end of 2021. Temporary staffing revenue made up 88.71% of total US staffing revenue in 2021, further highlighting the benefits of offering clients a contract solution in the US in 2022.
The US temporary staffing market experienced a huge 27% year-on-year (y/y) growth from 2020 to 2021, as stated in SIA’s US Staffing Industry Forecast: May Update 2022. To put this into perspective, pre-pandemic the yearly growth from 2016 to 2019 was consecutively 3%. We go into more detail on what’s been happening in the US staffing industry in 2021 in our infographic.
US Staffing Industry 2022 Trends to Watch
With the global staffing market predicted to grow by 16% year over year in 2021, and the US already holding the number one spot for generating revenue, yearly growth and revenue are only expected to increase further in the US staffing industry in 2022. Here are some trends to watch out for in 2022.
1. Candidates continue to hold the power
It has been well documented throughout 2021 the extreme talent shortages not only the US has been facing but worldwide. The US job market has been bouncing back from layoffs experienced in 2021, which has led to record-level quit rates amongst employees who are no longer willing to settle for mediocre perks.
High quit rates in the US have thrown hiring managers into the deep end when trying to attract and retain quality employees, and often seeking help from the experts at sourcing talent… recruiters.
Candidates now have their pick of excess open vacancies across the US, giving them the power to choose which employers best meet their needs. Trends we are witnessing that attract candidates which are set to continue in 2022 include:
Salaries Increasing in 2022
Many candidates (73%) are negotiating for higher salaries in 2021, as reported by surveyed recruiters in Jobvites’ Recruiter Nation Report, up 20% from 2020. According to Robert Half's 2022 Salary Guide, starting salaries for professional occupations are expected to increase by 3.8% on average in 2022. Roles in high demand may see even larger gains.
Additionally, according to our PGC’s internal data, the average pay rate for US contractors has consistently increased since 2020. As an employer of record, we engage and payroll contract and temporary workers in the US on behalf of our international recruitment clients.
Halfway through 2022, the average hourly wage for our contract workers in 2021 has increased to $67 per hour, up 7% from $62.74 per hour in 2021. The majority of these roles we engage in the US on behalf of recruitment agencies are white-collared office-based roles. The predominant industries we have witnessed traction in are IT, life sciences, marketing, and finance.
If you are a recruiter who has not yet entered the US staffing industry, the rising salaries in 2022 make the market an even more attractive destination for growth. The higher the salary of your candidate, the larger margin (mark-up) potential for recruiters when placing candidates. Especially within contract staffing where clients are likely to extend contracts due to the inability to find permanent staff, resulting in a steady stream of income for recruiters.
Benefits and perks
Candidates are less likely to accept low-quality benefits from an employer in 2022. When there is so much competition out there for candidates, they can just look elsewhere if your benefits plan is not substantial enough. Another finding of Jobvites’ Recruiter Nation Report was that substantial benefits plans in the form of medical/dental coverage (51%) and 401(k) (41%) have been effective at attracting new candidates.
Remote work to continue trending in 2022
Work-life balance is now one of the deciding factors for candidates in the US market. Candidates seek flexibility, and many do not return to the office full-time. Offering them work-from-home flexibility is a trend set to continue into 2022.
The trend of remote work in the US can also work in the recruiter’s favor in 2022. With 18% of hiring managers willing to search anywhere for talent if they cannot source candidates locally, why not expand your search to other states to find more qualified candidates who can work remotely?
Using an employer of record solution like PGC means you can compliantly engage candidates in any state for your client and offer best-in-class benefit plans. If your clients are yet to embrace this trend, sell them the benefits of remote work and unlock the power of recruiting anywhere in the US. If you’re not sure which states are popular for recruiters making placements in the US, our Top States for Business 2022 blog is based on our client’s worker onboards.
2. Focus on a Niche Skill Segment Within the US Staffing Industry in 2022
Niche recruitment is set to be a priority within the US staffing industry in 2022. Long gone are the days of multi-tasking talking to clients and workers across various different skill sets per day. The talent shortage has shown hiring managers that specific skill sets need to be met for their roles, and with the urgency required to fill positions may only want to speak to experts at sourcing within their field.
Furthermore, in an increasingly digital world full of distractions, candidates are likely only going to make time to speak to recruiters who understand their specific sector pain points, career goals, and how they can help them achieve their aspirations. IT, accounting, life sciences, and marketing are all temporary recruitment sectors expected to soar in demand in 2022. If you’re a recruiter, make sure you pick your industry-specific focus and have a solid candidate base built up and knowledge of the roles to make your mark in 2022.
3. Automation of Recruitment Processes
The talent shortage and resignation crisis in the US will require forward-thinking staffing agencies to revamp their approach to recruitment. The pandemic has made digital on-demand services expected for nearly all aspects of life, and recruiting is to follow. The staffing industry is likely to rely on more technology products in 2022 to speed up and automate recruiting metrics such as time-to-hire, quality-of-hire, and cost-of-hire.
Technology tools that help source, screen, schedule interviews, and improve the speed of communion during the hiring process are expected to be more common place in 2022. By automating tasks, recruiters can free up time from the low-value business as usual work and instead focus on high-value, personalized outreach to candidates once they receive applications. For example, investment in automated email triggers after a candidate applies for a job or a website chatbot for a candidate’s frequently asked questions can all enhance the quantity and quality of communication.
It is important to note that staffing is unlikely to convert fully to reliance on automation, especially for roles that are difficult to recruit for that need a high level of human contact. However, automation is a worthy consideration if you want to transform your staffing processes in 2022 and beyond.
Want to Grow Your Revenue in the US Staffing Industry in 2022?
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 by engaging temporary workers in new areas across the US, our employer of record solution empowers you to make compliant contract placements in any state.
With the US staffing industry forecast to grow further in 2022 and 2023, learn more about the opportunities by downloading our US Staffing Industry 2022 & 2023: Temporary Trends to Watch report.