Staffing Industry Reaches Record Levels: What HR Needs to Know

Six years have passed since the end of our last recession. The economy has been making a slow recovery as evidenced, for instance, by low unemployment rates. Still, we are faced with decreased labor force participation and 5.5 million job openings as of May, 2016.

Staffing Industry Breaks Record Levels

Yet, at the same time, the staffing and recruiting industry has been growing faster than GDP and overall employment at rates unlike any prior economic recovery.


As the graph shows, staffing employment has grown three and a half times faster than the economy and seven times faster than overall employment. Throughout 2014, U.S. staffing firms hired a total of 14.6 million temporary and contract employees, up 32.7% from 2013—returning annual staffing employment to prerecession levels.

Another barometer of staffing industry vitality is revenue. Staffing industry sales revenue includes temporary and contract services as well as search and placement services. A new industry record was set in 2014, with annual sales reaching $129.6 billion—5.9% more than in 2013. Industry analysts predict that U.S. staffing industry revenues will continue to escalate and could surpass $150 billion in 2017.

While companies continue to hire full-time staff, they are also increasingly turning to staffing services to for greater flexibility in their workforce strategies.  Optimism in the staffing industry is certainly cautious with a watchful eye on future economic volatility but is still expected to grow – especially in sectors like healthcare, IT, and accounting – for the foreseeable future.

What does this mean for staffing users, especially Human Resources? There are three important effects HR leaders need to consider, regarding their staffing partnerships:

1. Rethink your desire for the lowest rates you can get

You get what you pay for, and that’s never been more true than now in staffing. If you’re a client who is seeking the lowest rates in your market, you will lose out on the best talent. Demand is high for talent in almost every category.

The best staffing agencies are expert at finding talent but it requires significant investment in recruiters, recruitment marketing, and screening/assessment. Staffing agencies have the ability to be more selective about where they place their talent and they will not prioritize customers who want the lowest rates.

Staffing firms are also facing increasing costs, due in part to new regulations enforced by the Affordable Care Act.

2. Do your homework when selecting a staffing agency

Historically, the staffing industry has a low barrier to entry for start-ups. Starting an agency certainly requires capital but not as much as other business, like consumer products or manufacturing. When the staffing industry is in growth-mode, we see many new firms popping up, particularly in the hottest sectors such as IT.

Make sure you’re working with staffing agencies that are reputable and established. Focus on Best of Staffing winners, agencies who adhere to the highest ethical standards, and those who have proven practices and leadership.

3. Limit the number of firms you work with

With the growing number of staffing agencies, clients might be tempted to diversify and expand the number of firms they use. This is a mistake. Staffing agencies prioritize their energy into helping clients who treat them as partners and maintain more exclusive or limited relationships.

If you’re working with a large number of agencies, thinking you’re casting a wider net, the best staffing firms will recognize this and move on. Keep your relationships and loyalties to a few firms you can trust and you will get their best talent.


The staffing industry plays a vital role in the U.S. economy. Demand for temporary workers in the U.S. is expected to increase 2.3% on a seasonally adjusted basis for the 2016 third quarter, vs. the same period in 2015. This is the 26th consecutive quarter of year-over-year increases in demand for temporary workers.

Selecting and building deep partnerships with the best possible staffing agencies can be a critical component in workforce strategy, giving companies the edge as they compete for the best talent.

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Rich Diaz

Rich joined Advanced Resources as President in 2009, bringing more than 15 years of experience working for high growth, results-oriented companies. Prior to Advanced Resources, Rich was a Managing Director at SolomonEdwardsGroup (SEG), a CFO services firm offering consulting, staffing, and search services. While at SEG he was responsible for opening both the Chicago and Kansas City markets. Prior to joining SolomonEdwardsGroup, Rich was the Area Managing Director for MPS Group a $2 billion dollar professional services firm, where he oversaw the Kansas, Missouri, and Oklahoma markets. While at the MPS Group, Rich was recognized as one of the top producers throughout the company. Rich started his career with Century Personnel which was acquired by SOS Staffing a $250 million dollar staffing firm based in Utah. While at SOS Staffing he served as an Area Manager, and managed as many as 10 branch offices throughout the Midwest. Rich completed his BS Degree in Psychology from Northwest Missouri State University.


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