US Staffing Industry Revenue Growth Forecast for 2024

After a 15% decline in 2023 and a 3% shrinkage in 2024, bringing US staffing revenue to $184.6 billion, will 2025 mark a recovery? 

Well, after two years of steady decline, 2025 looks promising! 

According to SIA, the US staffing industry is expected to grow by 3%, reaching $189.9 billion. Moreover, a 5% growth to $198.3 billion is projected in 2025, which is in line with the overall modest growth of the US economy. 

Are you curious about what else 2025 holds, especially regarding consultant staffing revenue growth? 

This blog will explore the 2025 revenue forecast and the dynamics between temporary and permanent staffing. It will also cover sector-specific trends and the impact of technology and employment laws on the industry’s future.

Overview of US Staffing Industry Revenue Forecast for 2025

The US staffing industry revenue forecast reflects cautious optimism, with growth expected to resume after a period of decline. According to the US Staffing Industry Forecast Report, the industry’s revenue contracted by 10% in 2024 to $38.1 billion. 

However, looking into 2025, the forecast for the staffing industry has a brighter picture!

Although staffing revenue was initially projected to decline by 3.2% year-over-year, the industry has shown greater resilience than anticipated. The latest ASA survey reveals that staffing agencies expect a 2.1% revenue increase by the end of 2024. This statistic further fuels cautious optimism for the industry's performance in 2025.

This optimism suggests that despite short-term hurdles, there are signs of gradual recovery as businesses regain their footing and staffing demands shift back into gear.

Overall, while the US staffing industry is in a phase of cautious adjustment, the forecast for 2024 highlights a period of potential stabilization. With an anticipated rebound by 2025, there is a glimmer of hope for growth as market conditions improve.

Projected Revenue and Market Dynamics

After reviewing the US staffing industry revenue forecast for 2025, let's look closely at the projected market dynamics.

According to SIA (Staffing Industry Analysts), the US staffing industry saw a 10% decline in 2024, reducing the market size to $189.0 billion. This is steeper than the 3% drop initially forecasted in March 2024. Despite this, the industry is expected to recover and return to growth in 2025.

In terms of growth, analysts project a 1.3% increase in 2024 and a 2.1% rise in 2025. 

Additionally, 91% of staffing leaders anticipate growth for their firms in 2024, with many targeting 10-20% revenue increases.

Overall, 2024 may see a dip in revenue, but 2025 holds a promising outlook. SIA forecasts a 3% growth, reaching $189.9 billion, and a 5% growth to $198.3 billion, aligning with broader US economic development.

Temporary vs. Permanent Staffing Revenue Dynamics

After discussing the overview of the US staffing industry revenue forecast for 2025, including projected revenue and growth, it’s time to shift to another section. The following part focuses on the role of temporary and permanent staffing. 

So, look at the factors below that play an important role in temp vs perm staffing revenue dynamics.

1. Distinction Between Temporary and Permanent Staffing Revenue

You can differentiate between temporary and permanent staffing revenue with the help of two parameters:

• Shift in Preference Towards Permanent Staffing: Recent trends indicate a shift from temporary to permanent staffing solutions. While temporary staffing has historically been a core revenue driver, businesses increasingly value permanent staff for more financial stability and long-term benefits. Also, permanent roles are becoming more appealing due to their cost-effectiveness, reducing the need for ongoing recruitment and training, often required for temporary positions.
• Recruiter and Candidate Preferences: Candidates and recruiters are increasingly favoring permanent positions, as they offer career growth opportunities, stability, and a better work-life balance compared to temporary roles. Permanent staffing is now seen as more sustainable for companies, particularly in industries where internal recruitment methods are becoming more cost-effective.

2. Prevalence of Temporary Staffing in Revenue Generation

You can get a sense of the widespread role of temporary staffing in revenue generation, categorized into two sections:

• Temporary Staffing as a Historical Revenue Pillar: Temporary staffing has traditionally contributed to staffing agencies’ revenue streams. Its flexibility has allowed businesses to adapt quickly to fluctuating market demands without the long-term commitment of permanent employment. This has made temporary staffing particularly valuable in industries with rapidly changing project needs.
• Temporary Staffing’s Continued Role Despite Shift: Despite the shift towards permanent staffing, temporary staffing remains a key revenue source. However, its market share is facing challenges, especially in the IT and commercial staffing sectors. In this field, anticipated revenue declines of 7% and 9%, respectively, are expected. This signals a growing preference for permanent staffing but underscores that temporary staffing will still play an important role in the industry.

Sector-Specific Revenue Outlook

After analyzing temporary vs. permanent staffing revenue, we now focus on the sector-specific outlook, particularly for IT and commercial staffing industries.

This section explores projected 2025 revenue trends, highlighting growth areas and potential challenges across staffing sectors.

1. Tech & IT: 2025 Market Value and Growth Projections

The tech and IT sector continues to be a powerhouse in the staffing industry, with a notable 7% growth anticipated year-over-year. This sector's market value is expected to hit $43.2 billion in 2024.

Additionally, the projected market value of IT staffing in 2025 is approximately $46.2 billion, assuming a 7% growth in 2025.

Also, the IT staffing market is projected to grow from USD 118.95 billion in 2024 to USD 142.37 billion by 2029. This represents a CAGR of 3.66% over the forecast period (2024-2029) as per Modor Intelligence.

The robust demand for talent and technology investments to maintain competitiveness fuels such growth. However, challenges such as tech unemployment fluctuations and unfilled positions highlight the complexities within this sector.

2. Engineering Aspect

The engineering sector presents a positive trajectory with an anticipated 8% growth, reaching a market value of $10.4 billion in 2024. So, the estimated market value of the engineering staffing sector in 2025 is approximately $11.23 billion, based on an 8% year-over-year growth from 2024.

Moreover, increased investment in infrastructure projects requiring skilled engineers across fields like construction and manufacturing essentially drives this growth.

3. Finance and Accounting

This sector will likely see a 4% growth, driven by the stabilization of financial markets and improved hiring activity. As a result, the market value is projected to reach $9.1 billion in 2024.

Similarly, the expected market value of the finance and accounting staffing sector in 2025 is $9.46 billion, based on a 4% growth from 2024.

The expected rebound in finance and accounting suggests optimism for staffing firms operating in this area.

4. Life Sciences

The life sciences sector is projected to grow by 5%, driven by continual research and development in pharmaceuticals and biotechnology. Moreover, the 2025 market value would be approximately $10.5 billion.

Also, the global biotechnology market is expected to reach around USD 4.61 trillion by 2034. Furthermore, it’s expanding at a CAGR of 11.5% from 2025 to 2034.

This sector's emerging innovations highlight its importance for staffing firms looking to capitalize on future growth.

5. Education

Analysts expect the educational sector to see a significant 10% growth. As per Business Wire, the US education market is estimated to reach US$1.96 Trillion in 2025. It is expected to accelerate at a CAGR of 3.77% from 2019 to 2025.

Substitute teachers and support staff demand creates numerous opportunities for staffing agencies to fill roles vital to school systems nationwide.

6. Marketing

The business's increased marketing efforts, predicted to grow by 5%, reflect the marketing sector's increasing demand for marketing professionals.

Moreover, assuming a $5 billion market value in 2024, the 2025 market value would be $5.25 billion, considering the marketing staffing industry.

Influence of Staffing Trends on Revenue

Building on the sector-specific revenue outlook, it’s crucial to explore how broader staffing trends shape overall revenue growth and influence the industry's trajectory.

1. Growth of the Gig Economy and Its Revenue Implications

The growing demand for flexibility and autonomy among workers is driving the expansion of the gig economy. More professionals opt for freelance and project-based roles, shifting away from traditional employment models. 

This trend creates new revenue opportunities for staffing firms as they increasingly focus on meeting the needs of modern job seekers who value flexibility. 

However, this shift presents challenges as well. Staffing agencies must enhance their technological infrastructure and adapt their recruitment methods to keep up with the rapid pace of the gig economy. 

Agencies that embrace this shift will be well-positioned to capitalize on emerging revenue streams.

2. Rise of Temporary Employment Affecting Revenue

In contrast to the gig economy's growth, the traditional temporary employment model is experiencing a plateau. 

Economic uncertainties and changing corporate strategies are causing companies to become more cautious about hiring. Many businesses delay or defer additional hiring in anticipation of potential market fluctuations. 

As a result, staffing agencies face the challenge of adjusting their strategies to align with this more cautious approach. 

Agencies must promote strong client relationships, be adaptable, and leverage market insights to ensure sustained revenue generation despite the shifting preferences in employment models. 

This transition presents challenges and opportunities for staffing firms to innovate and diversify their offerings.

Impacts of US Employment Laws on Revenue

Following staffing trends and their revenue impact, examining how changes in US employment laws influence the industry's financial outlook and operations is essential.

1. Effect of State-Specific Employment Laws

The effects of state-specific employment laws are as follows:

• Minimum Wage Increases: Twenty-five states have raised their minimum wages, directly impacting staffing firms' payroll strategies and labor costs. Staffing agencies must adjust their rates accordingly, affecting pricing and client negotiations.
• Pay Transparency Laws: States like Hawaii and the District of Columbia have enacted pay transparency laws requiring staffing agencies to disclose compensation details in job listings. This necessitates redesigning job listings and implementing new compliance systems.

2. Regulatory Challenges Impacting Revenue Growth

Below, you can find the regulatory loopholes impacting revenue growth:

• Paid Leave Mandates: States such as California and Minnesota have introduced paid leave mandates that increase operational costs for staffing firms. These laws require staffing agencies to provide additional benefits, potentially raising employment costs.
• Noncompete Agreement Restrictions: Minnesota's restrictions on noncompete agreements require staffing firms to rethink employee retention strategies, especially in industries where mobility and talent movement are key.
• AB5 and Worker Reclassification: Laws like California's AB5, gaining traction in New York and New Jersey, are reclassifying contract workers as employees. This shift could increase operational costs for staffing agencies that rely on freelance and contract-based roles.
• Department of Labor Proposed Changes: The Department of Labor’s proposed hikes in the minimum salary threshold for exempt employees could increase labor expenses for staffing firms. While legal challenges may arise, agencies must prepare for potential changes in compliance.
• Workplace Safety and Anti-Discrimination Regulations: Evolving regulations around workplace safety and anti-discrimination practices require constantly updating staffing firms’ internal policies and practices. It ensures that they remain compliant with shifting legal requirements.

Technological Advancements and Revenue Growth

After addressing the impacts of employment laws, it’s essential to explore how technological advancements can drive revenue growth and enhance operational efficiency for staffing firms.

1. Adoption of Online Staffing Platforms

Adopting online staffing platforms, such as Vendor Management Systems (VMS) and Robotic Process Automation (RPA), is revolutionizing the US staffing industry. 

These platforms automate key processes, such as resume sorting and candidate screening, improving efficiency and reducing operational costs. They also enable smaller businesses and startups to access staffing solutions previously limited to larger firms. 

Mobile optimization is another crucial feature, expanding candidate pools by catering to job seekers on smartphones. The data analytics capabilities of these platforms help staffing firms make more informed decisions, optimizing recruitment strategies and enhancing client satisfaction.

2. Impact of Platform Models on Traditional Staffing Revenue

Platform models like VMS and RPA are reshaping traditional staffing revenue streams by streamlining operations and reducing time plus costs associated with manual recruitment tasks. 

Automation allows staffing firms to reallocate resources to more strategic functions, enhancing client relationships and improving service quality. The scalability of these platforms opens up new revenue opportunities, even for smaller businesses.

By leveraging advanced technologies, staffing firms can cut costs, improve efficiency, and increase client retention, driving revenue growth in a competitive market. 

However, firms must continuously adapt to the fast pace of technological innovation to maintain a competitive edge.

Conclusion

In conclusion, while the US staffing industry faces economic uncertainties, talent shortages, and shifting employment preferences, opportunities for consulting staffing revenue growth in 2025 and beyond remain strong. 

Technological advancements, the gig economy, and evolving employment laws will shape the industry's future. Staffing agencies must embrace innovation to stay competitive. 

Activated Scale offers the perfect platform for startups and small businesses to navigate these changes. We specialize in fractional sales talent and provide cost-effective "try before you hire" solutions. With expertise in lead generation and sales cycle management, we help businesses scale efficiently.

Looking for a consultant staffing revenue growth expert?

Get started with us today to boost your sales!