The U.S. staffing industry faced a minor setback in the third quarter of 2024, with temporary and contract employment declining by 38,000 jobs compared to the previous quarter. This decrease brought the average weekly number of staffing employees to 2.1 million, according to the latest data from the American Staffing Association (ASA).
The ASA’s quarterly Staffing Employment and Sales Survey revealed that the decline in staffing employment, which was a 1.8% drop from the second quarter and an 11.7% decrease year-over-year, marks the seventh consecutive quarter of contraction in the industry. This ongoing trend reflects the broader cooling of the U.S. labor market as businesses remain cautious amid economic uncertainties.
In addition to the drop in employment, sales within the temporary and contract staffing sector also showed signs of weakening. Total staffing sales amounted to $30.7 billion in Q3 2024, reflecting a 0.7% decrease from the previous quarter and an 11.4% year-over-year decline. This shift marks a departure from the usual seasonal uptick in staffing employment seen in the third and fourth quarters, traditionally characterized by steady growth.
Despite these challenges, there is cautious optimism for the upcoming year. Staffing companies, especially larger ones, are forecasting growth in the first quarter of 2025. Private staffing firms expect a median revenue increase of 5.0% year-over-year, while companies with $100 million or more in sales are projecting a more modest increase of 2.0%.
Richard Wahlquist, CEO of the American Staffing Association, attributed the downturn to the shift in hiring patterns following the post-pandemic boom. “After the rapid hiring surge of 2021 and 2022, businesses found themselves with full talent benches. However, with increasing macroeconomic and geopolitical uncertainties, employers slowed down hiring, leading to the current contraction in staffing sales and employment,” Wahlquist explained.
He added, however, that there is hope on the horizon. “The staffing industry remains poised for recovery in 2025, with growth expected as labor market demand spreads across more sectors. As conditions stabilize, we anticipate increased hiring and a return to expansion.”
Looking to the future, the staffing industry is confident that a return to growth is on the horizon. The continued demand for flexible, temporary, and contract workers will drive staffing companies to adapt to evolving market conditions. As industries adjust and normalize, the staffing sector will continue to play a pivotal role in supporting the workforce.
The American Staffing Association remains committed to advancing the interests of the staffing industry, promoting workforce solutions, and supporting the nation’s labor force through advocacy, education, and research.
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