Staffing firms that adopted automation and AI were more likely to grow in 2023
55% of staffing firms are experimenting with AI, according to Bullhorn research
BOSTON — February 29, 2024 — Although 2023 was a challenging economic climate for the staffing and recruitment industry, firms that adopted AI and automation technologies and improved productivity were more likely to see revenue gains, according to Bullhorn’s Global Recruitment Insights and Data (GRID) 2024 Industry Trends Report.
In 2023, the number of staffing firms reporting revenue growth declined for the first time in three years. Despite market headwinds, 17% of survey respondents still saw revenue increase by greater than 10%. These high-performing staffing firms had something in common: they were further in their digital transformation journeys and shared a focus on increasing productivity and efficiency.
High performers are experimenting with AI
Across the global recruitment landscape, 55% of firms began experimenting with AI in 2023. While the adoption of AI is still in its earliest stages, those firms experimenting with AI were 31% more likely to see revenue gains than firms that have not begun experimenting with AI. High-performing firms had higher adoption rates of AI tools overall, suggesting their early adoption of AI further enhanced their productivity and profitability. These firms were more than twice as likely to report using AI-driven tools for shift scheduling and credentialing and 1.5 times as likely to be using it for gathering client requirements.
High performers used more advanced automations
Firms that saw revenue growth were 2.4 times as likely to use automation. These high-performing firms used automation to gather client requirements and screen candidates, creating a smoother experience for all. Respondents who reported “excellent” success at winning new business were three times as likely to use self-service tools, and firms that saw revenue increases were also 23% more likely to have automated new lead engagement.
High performers drove more top-of-funnel activity
Firms that saw the highest revenue gains used technology to move candidates through the recruitment process faster and ultimately make more placements. They did so in part by enhancing job classification and talent segmentation to more quickly match candidates with the right roles. The highest-performing firms placed candidates in less than 20 days and were also 40% more likely to improve their conversion rates.
Getting ahead of the competition remains a priority in 2024
The top challenge for 2024 reported by survey respondents is uncertainty over the economy and future growth (cited by 60% of respondents), although two-thirds of firms expect the economy to improve in 2024 and 65% expect their revenue to increase this year. Aligned with this outlook, the top priority of staffing firms this year is winning new business (cited by 44% of respondents), followed by digital transformation, candidate acquisition, and strengthening client relationships (each cited by 30% of respondents). Another challenge that gained increased importance this year was competition from online freelance/gig platforms, with 40% of respondents citing this as a top challenge, compared with just 12% in 2022.
“Last year was a challenging one for many staffing firms, but as we look ahead to a brighter future, there are some lessons that the entire recruitment industry should pay attention to,” said Gretchen Keefner, SVP, Global Enterprise Business at Bullhorn. “Staffing firms that make the most of technologies such as AI and automation are, and will be, in a better position to lower margins, increase productivity, and differentiate their businesses from the competition. Forward-thinking firms are looking at technology to help candidates find the best-fitting roles, help clients get workers on the job faster, and win more clients.”
Read the full report here.
About the GRID Industry Trends Report
The 14th annual GRID Industry Trends Report is based on a multiple-choice, online survey of more than 1,400 staffing and recruitment professionals working across a variety of industries and around the globe, including North America, the UK and Ireland, Benelux, DACH, and APAC. The survey was conducted in late 2023.
About Bullhorn
For the past 25 years, Bullhorn has dedicated itself to building industry-leading, cloud-based software for the staffing and recruitment industry. Through partnerships with 10,000 customers globally, Bullhorn has built a vast knowledge base of recruitment best practices and deep domain expertise to help firms scale their businesses. Founder-led and headquartered in Boston, Bullhorn employs 1,400 people across 14 countries focused on delivering an incredible customer experience – its core mission. To learn more, visit www.bullhorn.com or follow Bullhorn on Linkedin or X.
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Kara Prone
Director, Global Content and Communications
Bullhorn
media@bullhorn.com
