Staffing agencies have always lived with a timing problem: they pay workers weekly, then wait weeks or months to get paid by clients. When key client industries slow hiring, automate roles, or run into financial trouble, that timing gap quickly turns into a serious collections and cash‑flow risk.
A new report by The Kaplan Group analyzes recent data from LinkedIn’s Economic Graph and the American Staffing Association showing that this pressure is not spread evenly across the economy. Some of the sectors staffing firms were built on are shrinking or automating away traditional roles, while a smaller set of industries is still adding staffing talent.
Key Takeaways
- Administrative and Support Services put the most pressure on staffing agencies, with staffing talent jobs down 29% from July 2022 to July 2025.
- Traditional industrial clients are also squeezing agencies, as staffing talent jobs fell 24% in Manufacturing and 22% in Transportation, Logistics, Supply Chain and Storage over the same period.
- Staffing demand is shifting rather than disappearing, with staffing talent jobs rising 182% in Hospitals and Health Care, 145% in Construction, and 314% in Utilities between July 2022 and July 2025.
Industries Squeezing Staffing Agencies
A handful of core client industries are doing most of the damage to traditional staffing models: light industrials, administrative/support services, and broad white‑collar sectors.
- Light industrials are pulling back hard. From July 2022 to July 2025, staffing talent jobs fell 24% in Manufacturing and 22% in Transportation, Logistics, Supply Chain and Storage.
- Administrative work is being automated out. Administrative and Support Services show the steepest decline in the entire chart at ‑29% in staffing talent jobs over the same period.
- White‑collar and professional sectors are compressing demand.
- In higher‑end markets, staffing talent jobs are down 16% in Financial Services and 6% in Professional Services between July 2022 and July 2025.
- At the same time, the share of contract job postings rose 24% from June 2022 to June 2023, then 10% in 2024 and 7% in 2025, while full‑time posting share moved +3% in 2023, ‑4% in 2024, and 0% in 2025, and part‑time posting share swung +74% in 2023, then ‑10% in 2024 and ‑3% in 2025. That shows that white‑collar clients are still hiring, but for fewer, more specialized, more flexible roles, which squeezes agencies built around high‑volume generalist search.
Taken together, these numbers show that some of the legacy pillars of the staffing business, industrial, administrative, and broad white‑collar, are now the sectors applying the most sustained pressure to agency revenue and cash flow.
Where Staffing Still Works
Not all industries are bad news for staffing firms. In several sectors, staffing talent jobs are growing rapidly, even as overall labor‑market churn has cooled.
The industries with the largest increases in staffing talent jobs are (July 2022–July 2025):
- Utilities: +314%
- Accommodation and Food Services: +260%
- Hospitals and Health Care: +182%
- Construction: +145%
- Government Administration: +99%
- Education: +49%
- Consumer Services: +26%
- Oil, Gas, and Mining: +11%
For agencies with strong exposure to these industries, the numbers mean that while some legacy segments are shrinking, parts of the staffing market are still expanding aggressively. Utilities (+314%), Accommodation and Food Services (+260%), Hospitals and Health Care (+182%), and Construction (+145%) are effectively propping up portions of the staffing industry by continuing to add contract roles.
These “survivor sectors” are also structurally different from the pressure sectors:
- Work is more hands‑on and harder to automate.
- Demand is driven by essential services or chronic shortages, not discretionary projects.
- Clients continue to rely on contract workers as a core part of how they operate.
For staffing firms deciding where to grow, these sectors represent some of the safest places to concentrate new business development.
How Flexible Work Reshapes Staffing Risk
Staffing risk today comes as much from how clients hire as from whether they hire at all. Contract work is now a core model:
- Contract job posting share rose 24% (2023), then 10% (2024) and 7% (2025).
- Full‑time posting share moved +3%, ‑4%, then 0% over the same years.
- Part‑time swung +74%, then ‑10%, then ‑3%.
More workers are moving from one contract role to another in the same industry, which signals that contract work is now built into long‑term workforce planning, not just used as a stopgap. For agencies, this means contract is here to stay. The risk comes from losing volume in specific sectors (admin, some industrial, broad white‑collar), not from clients abandoning flexible labor.
Remote and hybrid remain central:
- From July 2023 to June 2025, 22% of all members adding a new role chose a fully remote position.
- Among people with prior staffing/recruiting roles, that jumps to 30%.
- Hybrid roles make up 22% of new positions for both groups.
Staffing and recruiting professionals are more likely than average to move into remote roles, leaving agencies well placed to support clients that want flexible, remote‑friendly teams.
The staffing industry is being reshaped. Agencies most at risk are the ones still concentrated in client industries where staffing talent jobs are falling, and distress is rising. Agencies that shift toward sectors where staffing talent is growing, and work is harder to automate will be better positioned to protect their cash flow and less likely to need help collecting on invoices that never should have been left so exposed in the first place.
Methodology
ASA-LinkedIn State of Staffing Report (February 2026). The American Staffing Association partnered with LinkedIn’s Economic Graph to analyze labor market trends across the staffing industry. The report draws on data from more than 200 million U.S. LinkedIn members and approximately 500,000 professionals who have had work engagements through staffing and search companies. All figures cited in this article — including percentage changes in staffing talent jobs by sector from July 2022 to July 2025, contract posting share changes by year, remote and hybrid work figures, and observations about skill shifts and AI literacy growth — are drawn directly from this report. Figures are reported as published; no independent modeling or projection was applied.
