The State of Staffing 2023: Recruitment Trends, Challenges and Solutions

The Trends and Business Initiatives Staffing and Recruiting Firms Need to Know for 2023

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Staffing Hub’s 2023 State of Staffing Report pulls together the latest insights about the recruitment industry’s top challenges and opportunities from over 400 industry executives and 500 members of the working public.

A lot is happening in recruitment.

To navigate job market uncertainty, keep up with changing workforce trends, and protect against an economic slowdown, many agencies are reviewing existing models, expanding into new sectors, and embracing new tech.

Here we dive deep into what staffing and recruitment firms across the country are planning for 2023 and discover what sets fast-growth agencies apart from slow-growth firms.

Key Findings

Results from more than 400 staffing professionals and 500 workers surveyed by Staffing Hub in 2023.


The Great Reshuffle Continues

52% of respondents plan to look for a new job this year, up from 46% last year.


The State of Staffing 2023

56% of staffing professionals predict double-digit growth.


Top Challenges for 2023

Finding qualified candidates and getting candidates to respond are the top two recruiting challenges.


Top Opportunities for 2023

Technology and automation, building relationships with candidates and clients, and expanding into new markets were reported as the leading opportunities to capitalize on in 2023.


Digital Transformation

Respondents from fast-growth companies were 59% more likely to say that technology gives them a competitive advantage than those from slow-growth companies.


Staffing Agency Success Factors

Traditional staffing is going away. Problems have to be solved in a new, unique way.

Insights on the Great Reshuffle

“The pandemic redefined people’s relationship with work. Employees are not afraid to quit if their needs aren’t being met.”

Krista Garver, Managing Editor, Staffing Hub.

What's the top reason you would look for a new job?

To be successful in the current job climate, recruiters must develop a deep understanding of today’s job seekers’ mindset. Matching candidates with the right job openings isn’t just about matching hard skills; recruiters must consider soft skills and what candidates want from their next employer.

The survey’s results from over 500 respondents about their job search plans found:

  • Referrals (28%) and online job boards (24%) are the top places respondents found their current job. Though when respondents were asked where they would look for their next job, 54% said they would look on job boards.
  • 52% plan to look for a new job this year, up from 46% last year.
  • Higher pay is the top reason for switching jobs.
  • Beyond pay, men and women have different priorities:
  • 18% of women would switch jobs to be able to work from home, compared to 5% of men.
  • Men are more likely to switch for a better work-life balance (13% vs 8%) or for better benefits (11% vs 7%).

A key takeaway for recruiters is that more than half of job seekers will use job boards to look for their next job. As a result, job boards continue to be a critical hiring channel for recruiters. This means improving the efficiency of job postings, monitoring job boards, and being able to efficiently track and match candidates are essential for reaching top talent today.

The excellent news for recruiters is that many of the tedious and time-consuming manual tasks involved in job posting, including trawling and matching candidates, can be automated with an Applicant Tracking System (ATS).

Tracker’s ATS meets all of today’s recruitment needs. Using Tracker’s Job Board Post, Job Board Search, Watchdogs, and Auto Match, recruiters can build better candidate pipelines, increase job posting reach, and monitor and crawl job boards 24/7. In addition, auto-matching constantly matches new candidates to open jobs, freeing up recruiters to spend more time building relationships and focusing on uncovering soft skills.

Tracker’s Jobs+ feature also automatically optimizes and distributes job postings. And Job Board Search enables recruiters to search hundreds of Job Boards at the same time.

The State of Staffing Insights

The landscape

Unemployment stayed relatively low and steady throughout 2022 and it continues. According to Statista, the unadjusted unemployment rate in the United States stood at 3.6 per cent in March 2023.

In January, CNBC reported that hiring would slow in 2023, but jobseekers still hold the power. It’s a tight market, but there are plenty of roles for recruiters to fill.

Trends dominating the staffing industry this year include:

  • A continuation of the hybrid work culture
  • Diversity, Equity and Inclusion (DE&I) are gaining more prominence
  • Company reputation is increasingly important to job seekers
  • Data and tech is being used by staffing firms to drive growth and innovation
  • Increasing utilization of AI tools by recruiters
  • Candidates want a more positive recruitment experience
  • Referrals are the leading source for finding new candidates and clients

Staffing Industry Growth

After an exponential growth year in 2021, staffing industry growth stabilized in 2022, returning to pre-2021 levels. For 2023, staffing leaders expect their growth rates to be like 2022, with more than half (56%) predicting double-digit growth.

There is some uncertainty about the economy and if there will be a recession. When asked how the economy will impact their business this year, leaders in recruitment were evenly divided between positive, negative, and unsure.

This also varied by sector. For example, recruiters in the IT and healthcare fields reported positive expectations for 2023, while those recruiting for the construction and industrial sectors were more pessimistic.

Overall, there is a general positivity that talent will continue to be a driving need, and leaders of recruiting agencies are optimistic that good recruiting can win out all the while there is a candidate shortage.


This optimism is reflected in growth projections, with most respondents across all verticals expecting to see moderate to fast growth over 2023.

So, how can recruiting agencies ensure that predicted growth trajectories are achieved, or that slow growth or no growth projections can be outperformed?

Operationally, recruiters must continue to focus on strategies that will boost growth. With economic uncertainty a key theme, staying agile is imperative. Now more than ever, agencies must be adaptable and able to pivot quickly.

“History shows the staffing industry increasing in some markets during recessions, and in some markets decreasing. So, we truly have to be prepared for that shift in business.”

Survey respondent

Tech and Automation

It’s no longer enough for recruiters to post jobs up and wait. The utilization of tech is critical. While the survey reported several perceived challenges around tech, it also showed that staffing agencies have been adopting new tech at a rapid pace.

Automation in staffing can keep teams efficient and lean and help recruiting staff improve their engagement with candidates rather than getting bogged down with the day-to-day. Automating day-to-day tasks reduces the time to hire and improves the quality of hire, both essential in today’s competitive landscape. In recruitment, speed and accuracy are the name of the game. Tech is crucial to innovation and growth.

The benefits of using Tracker’s recruiting software include the following:

  • Automation of tasks boosts activity and skyrockets productivity.
  • Speeds up the recruiting process.
  • Supercharges communications to keep candidates engaged throughout the hiring pipeline
  • Reduces admin work.
  • Easy collaboration.
  • Increased hire quality – automated resume parsing and the trawling of 1000s of job openings lead to a refined candidate matching process.
  • Easy nurturing of prospects and progressing leads.
  • Fast updating of records across the business through web forms, surveys and more.

Communication and candidate engagement

Growth and success depend on effective communications and candidate engagement strategies.

In today’s market, sourcing the best candidates and keeping them interested through the hiring pipeline is tough. So here are a few tips to improve candidate engagement:

  • Use a tech stack to work faster and smarter - candidates won’t wait forever for a call-back.
  • Keep unsuccessful candidates on your radar - while a candidate may not be a good fit for a current position, they may be an ideal candidate for the next one.
  • Use video interviewing to give candidates time to prepare and build confidence. Video interviews can also better help you identify soft skills.
  • Keep candidates informed throughout the hiring process with automated emails and texts.

Top Challenges for 2023

This year’s survey found that recruiting new talent and finding new business is getting more difficult. Survey respondents also rated their lead sources for both new candidates and new clients as less effective than in the past.

Finding qualified candidates and getting candidates to respond were reported as the top two recruiting challenges. In addition, both fast- and slow-growth agencies are experiencing more difficulty compared to last year on every activity assessed in the survey.

Additional recruiting challenges included finding great recruiters and training recruiters on software and workflows. Read more about the essential skills of successful recruiters ®

Recruiting agencies must find new ways to be creative, including leveraging growth through tech. The survey found that ATSs and recruiting automation systems are the top solutions agencies plan to implement.

To illustrate the power of applicant tracking, here’s how Tracker’s ATS helps to solve some of the critical challenges staffing agencies face today.


Finding (and placing) qualified candidates

In recruitment, building solid relationships with candidates is vital. Automation frees up recruiters’ time so they can focus on nurturing connections. Tracker automates tasks like updating candidate status and availability, gathering and updating resumes, sending notifications and updates, collecting compliance data and job preferences, sending event-triggered surveys, updating lead status, and more.

Tracker’s Sourcing and Job Board features also help to build better candidate pipelines and increase job posting reach. For example, Tracker’s Auto Match and Watchdogs put recruiters on the front foot, sourcing relevant candidates and matching them to open jobs with zero-touch.

Getting candidates to respond

When it comes to communication, automation is king because it supercharges comms processes. For example, with Tracker, candidate engagement sequences are timed to perfection with automated emails and texts, keeping candidates informed and engaged throughout the hiring process.

Everything from welcoming new applicants to notifying candidates of interviews, providing status updates, sending surveys and onboarding can be automated via text or email. Timely comms reduce the chances of top talent dropping out.

Training staff on

In addition to being loved for its myriad of impressive features, Tracker also impresses when it comes to ease of use and personalized customer support. Providing various training and learning options, Tracker ensures your team is set for success from the outset.

Tracker’s webinars, podcasts, library of insights, weekly virtual classroom training, and dedicated support team ensure you get the most out of Tracker from day one.

Top Opportunities for 2023

The three most significant opportunities revealed in the survey were:

  1. Technology and automation
  2. Building relationships with candidates and clients
  3. Expanding into new markets

Building relationships and expanding into new markets are both hugely important opportunities, but both depend on getting tech and automation right.

Referrals and LinkedIn were reported as the most effective sources for finding new candidates across all agencies. Referrals were also rated as the top source for finding new clients.

Agencies should therefore be considering their Net Promoter Score (NPS). The NPS for agencies dropped from an industry average of 75 last year to 58 this year, making this year’s scores closer to 2020. The biggest declines were for fast- and moderate-growth agencies.

Candidate NPS (cNPS) provides vital evaluation. Remember, rejected candidates are the ones that will reveal the most about what you need to do to improve in your candidate journey.

The Digital Transformation

The environment for digital transformation and tech upgrades in recruitment is ripe, with agencies looking to spend more on tech in the coming year. ATSs and recruiting automation systems are the top solutions they plan to implement.

Fast-growth agencies are significantly more likely to view technology as a competitive advantage and be early adopters. For example, fast-growth agencies are more likely to use chatbots, automated referral management (ARM) platforms, and talent management systems.

Survey respondents rated all technologies more valuable compared to last year. Though with so many options available, respondents also said that finding and implementing the right tools is getting more complex.

The three top technology-related challenges staffing agencies are facing right now:

  1. Selecting the right tools for digital transformation
  2. Choosing the right sourcing tools
  3. Integrating staffing technology

Most valuable technology

Key findings:

  • Applicant tracking systems were rated the most valuable technology in the staffing tech stack.
  • LinkedIn is the most valuable sourcing platform.
  • Selections vary widely by vertical because of the unique needs of each industry. Tracker rated most highly in the Creative and Marketing sectors and Information Technology (IT).
  • More agencies are using automated marketing and recruitment tools, with Sense being the most used (14% market share).
  • 20% of respondents said their agency doesn’t use automated recruitment tools.
  • Text messaging tools are used by 64% of respondents (Sense holds the top spot for market share).
  • One-third (38%) of agencies provide a mobile app for candidates.
  • 20% of agencies use a chatbot.
  • 17% of agencies are using automated referral management (ARM) tools.
  • ATS, Recruiting Automation, CRMs, and mobile apps top the list for planned implementations in 2023.

Staffing Agency Success Factors

Key Performance Indicators

  • Fast-growth companies fill 15% more of their job orders than slow-growth companies.
  • On average, fast-growth agencies take longer to fill their job orders.
  • Fast-growth agencies have a redeployment rate 17% higher than slow-growth agencies.
  • The average cost per hire for fast-growth agencies is 30% higher than for slow-growth firms.
  • Margins are higher (+45%) at the fastest-growing agencies.
  • Recruiters are paid 61% more at fast-growth companies.
  • Fast-growth agencies respond more quickly to leads.

The Ideal Recruiter

Agencies also rely on the skills of their people. The two top attributes of an ideal recruiter were identified as being:

  • relationship-oriented
  • goal-oriented 

Interestingly, respondents from fast-growth companies were more likely to prioritize relationships over goals. For slow-growth companies, the pattern was reversed.

This leads us nicely to why we built Tracker.

 The idea for Tracker came into being when we were looking for the best possible software to run our own recruitment company efficiently and profitably.

We couldn’t find it, so we built Tracker!

We aimed to develop a platform with ‘Relationships First’ at its core. Our vision grew from this idea – to help recruitment and staffing firms grow their businesses by using Tracker to build better relationships and run their operations more effectively.

Many tedious and time-consuming hiring tasks, such as background checks, candidate screening, applicant tracking, and managing and scheduling the interview process, can be automated by Tracker, enabling recruiters to get on with some of the deeper ‘relationship-building’ work. The ideal recruiter needs the right environment to thrive.

Conferences and Resources for New Agencies

Networking is vital for recruiters, especially since this year’s survey found that almost all sources for finding new candidates and clients were rated less effective than last year.

Respondents voted the best conferences to attend as:

The most valuable resources were voted as:

Top recommendations and advice for new agency owners included:

  • Be open to learning and trying new things
  • Understand your processes before you automate
  • Be adaptable and flexible
  • Work with clients who see talent as an investment, not an expense
  • Be patient, the staffing industry is constantly changing

Recruiting agency success in 2023 with Tracker

Tracker’s ATS & CRM are designed to address the challenges faced by recruiting agencies head-on. Our full suite of automation tools rocket boosts your activity and gets you better results. Tracker ensures you optimize and streamline your communications, processes, and outcomes. And our highly developed reporting and analytics functionality gives you all the insights you need to ride the wave of success and stay ahead of the competition.

We won’t break the bank or your processes. See the power of Tracker for yourself. Book a Demo.

Key Findings

Top 2023 Recruitment Trends

Expecting 2023 Growth
56% of staffing professionals predict double-digit growth
Attitudes towards technology
59% of fast-growth agencies stated technology provides a competitive advantage for their business
The great reshuffle continues
52% of workers surveyed said they plan to look for a new job this year

Results pertaining to staffing and recruitment firms surveyed by Staffing Hub for the State of Staffing Benchmarking Report 2023.

Start Building Better in 2023.

Check out how our integrated ATS, CRM and Recruitment Automation Software helps your team create better relationships, processes, and more.