By Marshall Murphy
Managing Director and HRM Practice Leader
The nation’s tight labor market is boosting staffing industry business, as the pandemic labor pullback begins to dissipate.
Temporary staffing industry companies reported a median 27% year-over-year increase in their U.S. temporary staffing revenue in October, according to Staffing Industry Analysts, with the red-hot travel nursing segment reporting median year-over-year revenue growth of more than 100%, according to SIA.
The country’s economic expansion is forecast to continue into 2022 with an estimated 3.5 percent year-over-year growth although some headwinds will remain, according to The Conference Board Leading Economic Index. Jobless claims fell to a new pandemic low for the week ended Nov. 13, according to the U.S. Labor Department, and continuing claims dropped below 2 million for the first time since the pandemic began the following week.
We believe staffing shortages will likely persist into 2022 with childcare, retirements and COVID-19 limiting the labor supply, which means businesses will continue to seek out staffing firms to alleviate their employee shortages for the foreseeable future.
The Federal Reserve’s Beige Book, released Dec. 1, reported robust demand for labor but persistent difficulty in hiring and retaining employees. Several districts noted that despite strong demand, growth was constrained by supply chain disruptions and labor shortages.
Worker shortages were reported across a number of industries, including manufacturing and construction with some businesses limiting operating hours due to labor shortages.
The newly discovered omicron COVID-19 variant, which has dominated the news cycle in recent days, adds another level of uncertainty that has yet to be reflected in recent staffing and employer labor surveys.
Employers have also expressed concerns that the Biden administration’s vaccine mandate could further exacerbate hiring difficulties in the coming months.
We will be keeping an eye on all of these developments and their prospective impacts on the staffing industry.