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The U.S. labor market is at an interesting point in time for staffing agencies, with a staggering 11 million job openings. In addition, the unemployment rate is as low as it’s been in decades, with national unemployment falling from 6.4 to 3.9 percent between January and December 2021. This is good news for the United States economy, but it makes it difficult for companies to find and hire the right talent.

The changing face of the labor market impacted the U.S. staffing and recruitment industry throughout 2021, as the sector continued to contend with the effects of the Covid pandemic. The Covid vaccination program signaled a new phase in the pandemic, with restrictions being eased and the economy opening up and returning to a more normal operating level. This led to renewed confidence in hiring, but labor shortages because of the ‘Great Resignation’ meant staffing agencies struggled to fill job openings—especially for qualified healthcare and tech candidates.

It’s hard to say with any certainty what the future has in store, with the emergence of new Covid variances continuing to cast a shadow over a permanent return to a more stable operating environment. But with over 207 million eligible Americans now fully vaccinated and over 73 million receiving a booster dose, employers hope the Covid vaccine will limit workplace disruptions caused by the virus in 2022.

So, what can the U.S. staffing industry expect in 2022?

Job Openings & Labor shortages

The Labor Department’s December 2021 jobs report marked the twelfth consecutive month of job growth in the U.S. labor market. As the labor market continues to rebound from the ‘Great Resignation’ of 2021 and other effects of the pandemic, various surveys and projections are generating an increasingly mixed picture of labor conditions.

However, we can expect to see labor shortages continue well into 2022. A Gartner survey released in September 2021 revealed 91% of HR leaders were concerned about employee turnover. This fear is backed up by another Gartner survey that showed over 31% of employees planned to look for a job at a different organization in the next year. Although the survey did not ask directly for people’s reason for wanting to leave their current role, it found that safety, vaccination policy, and hybrid work arrangements were factors.

This year, sourcing qualified candidates is another area that will remain a challenge for recruiters, particularly technology and healthcare workers. The U.S. Bureau of Labor Statistics estimates that employment for software developers will increase by 22% over the next decade. That’s approximately 189,200 openings for software engineers each year. This means companies will have to find creative ways to attract, engage and retain top tech talent.

As demand for healthcare continues to grow, so will the need for workers in all areas, including nurse practitioners, nurses; physicians; pharmacists; physician assistants; lab technicians, and other support staff. Besides hiring new workers, organizational leaders are seeking ways to keep their current workforce engaged and productive. However, without adequate resource to manage client demand, tackling this issue will be a challenge for recruiters and staffing agencies in the U.S.

Increase in contract and temp workers

The U.S. Labor Bureau recently reported that a record 4.5 million American workers had quit their job in November 2021. With a record number of workers quitting their job, leaving the labor market permanently and employees self-isolating because of Covid, many companies are being forced to explore alternative options to fill roles.

In the third quarter of 2021, the American Staffing Association (ASA) reported that staffing firms across the U.S. employed 2.7 million contract and temporary workers, an increase of 3.5% over quarter two. This trend looks set to continue with the ASA predicting a 19% year-on-year increase in demand for temporary and contract workers.

With this growth in mind, it would be prudent for staffing agencies to be prepared to increase contract and temp recruitment capacity in 2022.

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Employee Benefits

Besides the difficulty of finding qualified people to fill positions, employers are now competing to win over and retain the single most valuable asset they have: their employees. Employees who experienced the anxiety and stress of the coronavirus outbreak are demanding better pay, more benefits, and greater job flexibility.

A record number of job openings and the increase in remote and hybrid working models has helped remove barriers to switching jobs. Millions of Americans are quitting low-paying or otherwise unsatisfying jobs in favor of higher-paying work and better benefits, with record job turnover rates. A 2021 Gartner survey of 18,000 employees found compensation (48%) and Work-life balance (42%) were the major drivers of finding a new job, followed by location (33%).

In 2022, companies will attract the best and brightest candidates to their companies by offering a full benefits program, with flexibility at the top of the list.


The continuing competition for workers in the U.S. has forced a rise in employee compensation. Year-on-year (2020-2021), average hourly wages rose by 4.7% in December, above the 4.2% anticipated increase. Attracting and retaining good employees is not always easy, and pay is a principal reason. A survey by Joblist found that 79% of employees looking for a new role believe they can make more money by switching jobs rather than staying in their current role.

Wage increases are a trend we can expect to continue in 2022. According to forecasts, the leisure and hospitality, healthcare, and education sectors are expected to lead the way in salary increases. These sectors were among the hardest hit by the coronavirus pandemic, so their recovery will rely on how well the pandemic is brought under control.

It can be a challenge for employers to attract and retain top talent in competitive labor. Companies can attract a strong pool of applicants for job openings by offering competitive salaries and benefits.

How can staffing agencies successfully manage demand in 2022?

As the Omicron variant spreads rapidly through the United States and the rest of the world, there is no end in sight for the pandemic’s impact on the job market. And with the latest surge in Omicron-related Covid cases, it remains unclear what impact this will have on the Labor Department’s January jobs report.

With the current economy, unemployment rates are at a record low. Statistics from the U.S. Bureau of Labor Statistics project total employment will grow from 153.5 million to 165.4 million over the 2020–30 decade, an increase of 11.9 million jobs. This growth in employment will create several challenges for businesses, but it also holds great potential for staffing and recruitment agencies if they prepare and manage this change successfully.

Partnering with an experienced and proven outsourced recruitment partner can offer a lifeline during times unpredictable times for recruitment and staffing agencies. IMS People Possible provides a full-service outsourced recruitment solution, providing as much or as little outsourced recruitment support as you need—when you need it. Whether you need access to full-cycle support to cope with increased demand for temporary and contract workers or help with compliance requirements, database regeneration, job posting or resume formatting, outsourced recruitment services are a great option.