IT & Engineering Staffing Firms Posted Double-Digit Growth and Strong Profitability in 2022
Alexandria VA, June 14, 2023 –IT and engineering staffing firms chalked up an impressive double-digit growth in 2022 amid an economy that was sending mixed signals, according to the 2023 TechServe Alliance Operating Practices Report (OPR), the industry’s foremost benchmarking analysis.
The just-released report highlights several long-standing and newly emerging industry trends:
Last year was the second consecutive year that technology staffing firms posted such robust top-line growth and profitability. A few key highlights from the report include:
- High-Profit Firms achieved their above-average profitability from a combination of commanding higher gross margins, better productivity from their teams relative to compensation, and lower expenses.
- Are job boards dead? Job boards continue to decline as a source of candidates with LinkedIn cited as the recruiting source for the majority of positions filled.
- The new norm is here to stay: Staffing firms continue to reduce their real estate spend; remote and hybrid work for both internal teams and billable consultants is here to stay.
“Although there was some softening in the back half of 2022, especially in the fourth quarter, our benchmarking report shows that the industry out-performed expectations during a turbulent economic period,” said Mark Roberts, CEO of TechServe Alliance. “Clearly, technology staffing firms play a critical role in enabling their clients to be at the forefront of emerging technologies that are transforming every industry today. And while we don’t expect similar results in 2023, we still see resiliency among technology staffing firms going forward.”
This comprehensive benchmarking report covers a wide range of metrics including newly captured data points on operating in a work-from-anywhere-sell-to-anywhere world:
- Gross Margin & Bottom-line Profitability Based on Size
- Gross Margins and Close Rates associated with Direct Client Relationship, VMS/MSP with Hiring Manager Contact, and VMS/MSP Without Hiring Manager Contact
- Direct Hire Revenue and its Impact on Gross Margins and Pre-tax Profitability
- SG&A Expenses—what areas of expense control can help drive higher profitability
- Performance Expectations Including Virtual Activities & Compensation for Sales & Recruiters at Three Levels of Experience
- Benefits Offered for Internal Staff, Hourly and Salaried Consultants
- Industry Trends such as client insourcing
- And much more!
Learn more about the 2023 Operating Practices Report here. A Sales & Recruiter Metrics Report will be released in the future.
About TechServe Alliance
TechServe Alliance is the national trade association of the IT & Engineering staffing and solutions industry. IT & Engineering staffing and solutions firms and affiliated professionals count on TechServe Alliance to keep their leadership informed, engaged, and connected. TechServe Alliance serves as the voice of the industry before the policymakers and the national and trade press. By providing access to the knowledge and best practices of an entire industry and tapping the “collective scale” of companies, TechServe Alliance supports its members in the efficient delivery of best-in-class IT & Engineering staffing and solutions for clients and exceptional professional opportunities for every consultant.