Staffing companies have become a vital asset to the US economy, employing nearly 17 million workers a year . With that kind of volume it’s no wonder that there are staffing industry trends that affect the market as a whole, across industries.

In fact, the staffing market in the US is expected to rise by over 2% in 2020 .

But accommodating for an ever-shrinking supply of qualified workers is going to be  a major challenge that staffing companies will need to face head on if they want to compete at a higher level.

For 2020 expect to see 3 major US staffing trends that will continue to have a massive impact on the labor market as a whole.

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Top 3 Staffing Industry Trends and Challenges

At just 3.7%, 2019 witnessed the lowest unemployment rate in the US in 49 years. This highlights a top challenge for companies - to source and retain full-time employees to staff their growing projects.

In order to accommodate for these trends in staffing, agencies will need to be adaptable and open to new ways of doing business, such as leveraging artificial intelligence in order to expedite their hiring process - among other things.

  1. Leveraging Technology in a Changing Landscape

Staffing and recruiting is a laborious process - from pre-screening, drug testing and checking referrals, to engaging candidates, interviewing and negotiating the final offer. 

The inability to efficiently recruit, screen and on board qualified candidates is eating into staffing revenue.

A whopping 37.5% of staffing firms don’t automate the following processes:

  • Prospecting
  • Client Engagement
  • Account Management
  • Candidate Selection
  • Screening
  • Lead Nurturing

And it’s no wonder that 36% of employment agencies rank automation as a top challenge - talk about not doing the thing you know needs to be done.

Staffing professionals will massively benefit from adopting the latest technology - such as recruitment software like Shiftgig, Catalant and Upwork. Plain and simple, aging technology is throwing a wrench in their ability to attract top talent (which we know is in short supply).

But if that’s not enough to seal the deal, consider this - by 2022 chatbots could help save companies a total of $8 billion per year .

  1. Balancing Candidate Satisfaction With Client Experience

Balancing candidates and clients can be a challenge - let’s face it, up-and-coming talent are much more aware of working conditions, self-fulfillment and purpose.

Gone are the days where a good paycheck was enough - and, maybe, rightfully so.

A few questions that every staffing agency needs to ask itself are: 

  • Is an expedited (or automated) hiring process watering down the level of skilled talent we attract?
  • Are we providing the type of benefits and assurances we need to attract and retain top talent?
  • Do we have systems and tech in place that can ensure seamless recruiting and hiring?
  • All things considered, are we providing maximum value to candidates and clients?

And let’s be clear about something - creating the secret sauce that can ensure a positive experience on both sides of the spectrum (client and candidate) is not an overnight process. 

Nor is it something that’s absolute - ongoing quality control is extremely important. Surveying their experiences and making adjustments to your systems and processes will be the difference between sink or swim.

Just in case it wasn’t already clear, sinking means losing valuable referral business - roughly 18% of a staffing firms revenue comes from the referrals of happy clients.

  1. Knowing the Importance of Carving out a Niche

We’ve heard it before - “jack of all trades, master of none” - but few staffing firms can actually put this into practice. Simply put, being generic kills an employment agencies ability to do 4 things :

  1. Differentiate from the competition and close more staffing clients (from a better marketing position)
  2. Generate the right talent pool with quality workers (and the ability to adjust to talent shortages in a specific industry)
  3. Take advantage of bigger margins from higher value staffing opportunities (being specialized in anything commands a premium over being a one-size-fits-all operation)
  4. Increase revenue from a boost in efficiency and productivity (not having a clear focus means having an inefficient hiring process - this leads to opportunity cost from having to “reinvent the wheel”) 

There are clear advantages when clients and job seekers alike know exactly what to expect from a staffing company - less time and energy needed to understand what a staffing company does and how they do it.

When this is clear, it's easy to understand and make decisions. For example, if an employment agency does “admin personnel” it’s hard to drill down if their candidates would be the right fit. However, if a law firm sees that a staffing company does “admin personnel for law, accounting and marketing firms” then they can make a more definitive decision.

To top it off, if that same company is evaluating a few options they will much more likely go with the firm that calls out their industry (and will probably be willing to pay more for their services to avoid costly employee turnover). 

US Staffing Industry Trends in 2020 and Beyond

With the number of staffing companies popping up in the US - for various reasons - it has become increasingly more important for them to not only keep up with staffing trends, but become the trendsetters .


Technological advances, dwindling supply of skilled labor, candidate and client expectations, and being hyper-focused in an industry are some of the critical staffing trends that are driving the US market, today and tomorrow. 


While it can be difficult to always stay on track of market trends it’s important that staffing companies keep their thumb on the pulse of their industry - much like any other business. 

Adapting to a fast-changing environment is vital to their success , and with the information age in full force it looks like there are no signs of slowing down.

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