Every company needs corporate employees of all types to manage and coordinate their operations, from accounting and finance to customer service, clerical, and marketing. These roles are critical for any organization, regardless of industry, to remain successful and running smoothly.
When a company is growing, there is almost a universal uptick in hiring for these roles. However, the current economy is sending mixed signals. And when companies get nervous for the future, it is these same occupations that are often the first to go. If not the people in them, then the open positions that were previously posted for these roles.
Over the course of the last few months, we’ve focused on top-of-mind staffing verticals in our State of Staffing Series.
We started out taking a closer look at IT demand, highlighting that job postings for these workers are largely outside of the tech industry and that their wages are actually quite competitive. Next, we dove into light industrial’s shifting demand and emphasized how diversification supports business through the ups and downs of economic cycles. Rounding it out, we addressed healthcare staffing, noting that the times that supported high bill and pay rates have now passed, and staffing companies need to adjust their strategy.
Now, we are taking a more broad sector approach, looking at roles that every type of company employs.
Different departments like clerical, creative, finance, HR, and recruiting are the backbone of business and support the daily function and operation of an organization. All companies need these people. However, the demand for their positions can change because of different factors, whether economic conditions or internal strategies.
In 2021 and early 2022 a perfect storm occurred. Venture capital investments in the US broke records. In 2021, the value of VC funding equated to about $345 billion, nearly twice as much as the previous year. There was a surge in the formation of companies, increasing demand for the operations roles that supported those endeavors. Additionally, many legacy companies were also seeing record profits and growth and were trying to capitalize by hiring. It was an all out talent war, and staffing companies provided many people to meet the need.
As we’ve pointed out in our other sectoral reviews, while overall postings and demand are now down, levels generally align with historical trends and wages are continuing to increase or hold firm.
Looking into the office and clerical staffing sector, we see that active postings are down substantially from March of 2022, currently sitting at about 570,000 active postings, which is not far off from pre-pandemic and historical levels. Meanwhile, advertised wages for these roles have increased by 22.6% over the past three years.
However, we see a very different story when it comes to staffing demand.
When we look at these same positions being advertised by staffing companies, we can see that there are currently about 45,000 active postings. In contrast, these levels are about 70% below their historical and pre-pandemic levels. Like so many sectors, companies still need these workers, but they aren’t using staffing services to get them.
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Let’s dive into one of the occupations within the office and clerical sector often filled using staffing services—Customer Service Representatives (SOC 43-4051).
Postings for this occupation have leveled off to historical posting levels, with over 145,000 active job postings in the US. This trend is consistent with the sector overall, but only about 8,000 are being advertised by staffing companies. And since last August, staffing companies’ postings have fallen by 65%.
However, when we look into specific industries, we can see there are some opportunities.
While staffing companies do not have a historical desire to supply workers for retail or hospitality, the top company posting for Customer Service Representative is Walgreens. At an industry level, Pharmacies and Drug Retailers experienced extreme growth throughout the pandemic, nearly doubling their posting levels for this position, and that demand has remained. Accommodation and Food Services is another industry with sustained demand for this role. Postings have increased by 50% from historical and pre-pandemic levels and may be a pathway worth re-exploring.
Non-staffing companies currently have eleven times more postings for Secretaries and Administrative Assistants than staffing companies.
Let’s consider another occupation within the office and clerical sector, Secretaries and Administrative Assistants (SOC 43-6014), but only look at postings by staffing companies. In March of 2022, there were 26,100 active postings. Last month, there were about 7,300 active postings, which represents a 70% decrease. Meanwhile, looking at postings by non-staffing companies, demand has fluctuated over the past three years and is now returning to more historical levels. And these posting levels are much higher than staffing companies’, eleven times more.
Let’s look to the professional sector, which includes roles like Sales Representatives, Human Resource Specialists, and Marketing Managers.
For this occupation group, we see that demand by staffing companies has dropped below pre-pandemic levels after nearing historic peaks in 2021, falling from 240,000 to just 80,000 postings. These represent only 8% of total postings for professional occupations.
Finance and accounting is following suit, reaching extremely high demand levels, but now returning to less than historic trends.
Let’s look specifically at the occupation of Accountants and Auditors (SOC 13-2011). After reaching a height of over 100,000 active monthly postings in the middle of 2022, there are currently about 62,000 active postings in the US, with advertised wages having increased by 9.7% over the last year. Wages advertised by staffing companies for accountants have only increased by 3.5% in the same period, but their postings have remained fairly steady after leveling off last year and currently sit at well over 10,000 active postings.
Overall, we’re seeing a similar story across the board in the professional and office sector.
Demand for office and professional occupations has experienced its share of ups and downs, with recent months leaning towards a downturn. There was an overshot in expansion and hiring, and now the market is correcting, even over correcting in some cases. Concerns will linger until companies regain confidence that the Federal Reserve has ceased its interest rate hikes. Significant amounts of venture capital and private equity funds are sitting idle. When these investments return, the war for talent could feasibly intensify.
What does this mean for your staffing strategy?
Always consider trends in context, both historically and across industry lines.
Companies, whether in your traditional vertical or ones you haven’t previously worked in, will always need to hire. And in a challenging labor market, staffing companies who can illustrate the full picture to clients using concise, contextual data will be able to explain and advise on their unique situation.
When analyzing labor market trends, it’s important to place them in a broader historical context and consider their implications across industries. As we’ve illustrated in our State of Staffing series, while some industries are cooling down, others might be heating up, so be agile to diversify. Regardless of whether it’s in a sector you’re familiar with or exploring new horizons, the constant is that companies will always require staffing solutions.
As the job market evolves, demands shift, and wage dynamics impact rates, staffing companies need to remain adaptable and informed to navigate the landscape effectively. When you arm yourself with the right data, you can do just that.
Why does this matter?
During challenging times, different staffing companies react in different ways. Some choose to right-size their operations, while others opt to diversify. Some sell off and merge with competitors instead of waiting out an uncertain future. Ultimately, the right course of action for your business is something only you can determine. However, one thing will always be true: the more you know, the better decisions you will make.
