Jan 03, 2023

What You Need to Know About Staffing Trends for 2023

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Inflation, wage increases, and shrinking talent pools? Oh my.  2022 was a whirlwind of economic change, leaving many businesses concerned about what 2023 has in store for the staffing industry.

To succeed in today’s competitive marketplace, staffing agencies have had to optimize their candidate experience, adopt new technology, and stay ahead of industry developments.  

What do you need to know to reach your goals in today’s uncertain marketplace?

We’re sharing the top trends in staffing for 2023 to help your company thrive. 

Workers will return to the job market, but the candidate shortage will persist 

Today’s massive labor shortage has had a profound impact on many staffing companies. “Shortages were already a concern before 2020, but the pandemic amplified them,” says Staffing Consultant Darin Pasch. Baby boomers retired early, and many parents—overwhelmingly women—left the workforce to care for children at home. “These shortages have also impacted the light industrial and clerical workforce more than ever before.”  

Amid economic uncertainty and fears of a recession, some workers who previously left the job market are likely to return. The November report from the Bureau of Labor Statistics shows 5.6 million job seekers in November 2022, up from 5 million in February 2020. Still, with over 10 million jobs available, there’s no end in sight for the candidate shortage. 

2021 and 2022 brought significant periods of growth to staffing companies. Despite this, the candidate shortage remains—and it isn’t going anywhere. To be competitive, staffing companies will need to invest in technology that enhances their recruitment efforts. 

Wages have increased, but inflation has outpaced gains 

Wage increases are still on the rise, fueled by the talent shortage and the highest inflation rate we’ve seen in 40 years. SHRM expects the average U.S. pay increase to hit 4.6% in 2023. 

Still, while workers gained increased wages in 2022, these did not keep up with the rapidly rising inflation rate (and cost of living). The consumer price index hit 9.1% in June 2022, falling to 7.1% as of November 2022. Economists and government officials predict these numbers will come down significantly in 2023, but the impact on businesses and workers will be lasting. 

As you consider your bill rates and wages for temporary/contract workers, keep in mind the changes to cost of living. 

Flexibility and work-life balance remain priorities for workers 

While many workers fear a potential recession, they still have the upper hand due to the ongoing talent shortage.  

As a result, staffing companies can expect to continue accommodating for flexible schedules that cater to candidate needs. This might mean splitting shifts between different workers, resulting in increased administrative burden on your team.  

Work-life balance became more important to workers across industries during the pandemic. “People realized what was most important, and they shifted their priorities,” says Pasch. “Now, it’s about building your work schedule around your life—not the other way around.” 

What does this mean for staffing companies? Well, when it’s inconvenient to apply for a job, schedule an interview, or show up for work, candidates are more likely to ghost you before they even start—or leave your firm for a competitor. “If it’s time-consuming or confusing to get onboarded or receive a paycheck, they’re more likely to go work for a different staffing firm,” notes Pasch. “You’ll need the right set of tools to streamline the candidate journey and compete in the marketplace.” 

Relationship-building will be key to staying competitive 

Even as staffing companies adopt more tech tools, you will need to prioritize relationships in order to gain an edge in today’s competitive market. The good thing is: the right technology will enable your team to spend more time building relationships and putting people to work (and less time on paperwork and repetitive administrative tasks). 

Tools such as mobile engagement apps and messaging capabilities help you stay connected with candidates and current employees. Notify a current worker about a new opportunity before their current assignment ends to prevent them from leaving for a competitor. Survey workers to measure satisfaction with their job assignments. Together, technology and the authentic relationships you cultivate are essential to growth in the staffing industry.

Choosing the right technology will matter more than ever 

Facing an uncertain economy and labor shortages that are sure to persist for years to come, staffing companies are turning to advancements in technology. With many providers and tools to choose from, it’s more important than ever to make sure you get it right. 

“Staffing firms are looking to leverage technology to gain competitive advantages in the marketplace,” says Pasch. “Having the right tools allows you to make it easy to apply for a job, get onboarded, come to work, and receive a paycheck. That’s going to be essential to hiring and retention efforts.” 

A successful tech stack will enable your staffing firm to build stronger, more personal relationships with your clients. “Having the right technology frees up time for your recruiters to spend the time engaging with the talent and building relationships,” says Pasch. 



Looking for software, payroll funding, or consulting services to propel your staffing firm to success in today’s competitive market?
We’d love to connect. 

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