How the Southern U.S. Dominated the IT Staffing Market in 2022
In 2022, the Southern U.S. emerged as the dominant region in the U.S. IT staffing market, capturing over 38% of the market share. This information comes from a research report by Arizton, a leading market research firm. The report also predicts that the U.S. IT staffing market will grow at a compound annual growth rate (CAGR) of 5.82% between 2022 and 2028.
The IT staffing market plays a crucial role in the overall staffing industry in the United States. In recent years, the demand for IT staffing has been fueled by the increasing need for scalability, flexibility, and risk reduction. The rise of a contingent workforce, driven by these factors, has contributed to the growth of the IT staffing market. Additionally, consistent investments in the IT sector, economic stability, and technological advancements have created a positive environment for the temporary staffing market.
However, the growth of the IT staffing market in the U.S. is not without challenges. One major challenge is the increasing salary of IT personnel. The evolution of technology, the growing demand for updated and secure IT solutions, and the shortage of skilled IT professionals have led to a higher demand for IT staffing across various functions and departments. While some skill sets may experience slower salary growth, others are in high demand and command higher compensation.
Several states, including California, Texas, Florida, New York, and Illinois, have a large number of small businesses. These businesses are increasingly focused on employee hiring and training to enhance productivity and reduce operational costs. This trend is expected to boost the demand for IT staffing in the country.
The U.S. boasts robust connectivity infrastructure, witnessing a significant increase in internet data traffic in recent years. Organizations are increasingly adopting cloud-based services to achieve their goals, and broadband usage is growing rapidly. The introduction of 5G technology also contributes to the market’s growth, as faster internet speeds will provide better cloud infrastructure.
In recent years, the growth of freelancers and the gig economy has become a new factor driving the success of IT staffing firms. Many firms now hire freelancers for short-term contracts or project-based work, allowing them to quickly and efficiently carry out specific tasks. The gig economy has seen significant growth, with close to 50 million people in the United States taking up gig work in 2017, contributing to a total market value of over $800 billion. The gig workers bring valuable skills and can be quickly hired and released as needed, which adds flexibility to staffing arrangements.
The U.S. IT staffing market is highly competitive and fragmented, comprising both national and local staffing firms. Local firms are typically operator-owned, and each region has one or more significant competitors. These vendors also face competition from other consulting and advisory firms, including accounting, strategic consulting, and systems implementation firms. Factors such as expanded reach, physical presence in large markets, concentration of service offerings, and reputation play a significant role in gaining a competitive advantage. Pricing pressure is also a significant challenge, as vendors need to navigate competitors’ pricing strategies.
The IT staffing market is witnessing specialization as a key focus area for vendors. Major players focusing on STEM skill sets are experiencing growth and profit. Furthermore, mid-tier firms are emphasizing specializations across industries. Client industries such as technology/telecom, banking, financial services, and healthcare contribute to a strong and positive outlook for the recruitment market. Companies that can realign their business models to cater to these industries will likely thrive in the future.
In conclusion, the Southern U.S. has emerged as the dominant region in the U.S. IT staffing market in 2022, capturing over 38% market share. The market is expected to grow at a CAGR of 5.82% between 2022 and 2028. Factors such as the rising contingent workforce, increasing demand for updated IT solutions, and the growth of the gig economy have contributed to this growth. Challenges include the increasing salary of IT personnel and intense competition in the market. However, opportunities lie in the expanding small businesses sector and the country’s robust connectivity infrastructure. Overall, the U.S. IT staffing market presents both challenges and opportunities for vendors and offers a positive outlook for the future.
Summary:
The Southern U.S. dominated the U.S. IT staffing market in 2022, accounting for over 38% of the market share. The market is expected to grow at a CAGR of 5.82% between 2022 and 2028. The increasing contingent workforce, demand for scalability and flexibility, and technological advancements have fueled the growth of the IT staffing market. Challenges include the rising salary of IT personnel, while opportunities lie in the expanding small businesses sector and the country’s robust connectivity infrastructure. The market is highly competitive and fragmented, with specialization being a key focus for vendors.
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The Southern U.S. dominated the U.S. IT staffing market share in 2022, accounting for over 38%.
According to Arizton’s latest research report, the US IT staffing market will grow at a CAGR of 5.82% during 2022-2028.
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The IT staffing market continues to be an integral part of the overall staffing industry in the US. The trend of a rising contingent workforce driven by the need for scalability, flexibility, and minimized risk has been fueling the growth of the IT staffing market in recent years. The temporary staffing market remains positive due to consistent IT sector investments, economic stability, and technological advances. However, the growth of the IT staffing market in the US has been the increasing salary of personnel. The evolution of technology, the ever-growing demand for updated, secured, and quick IT solutions, and the shortage of skilled workforce push the demand for IT professionals across functions and departments. Although certain skill sets continue to observe sluggish growth in salary increases, some specific ones get paid off more than expected owing to high demand.
California, Texas, Florida, New York, and Illinois are a few states that account for the highest number of small businesses in the US. These businesses are increasingly focusing on employee hiring and training. Hence, they are increasingly looking for ways to enhance their productivity and reduce the cost of operations to be highly competitive in the market. The above factors are expected to boost the country’s IT staffing demand. The US has one of the finest connectivity infrastructures, and the country is witnessing increasing internet data traffic in recent years. Organizations are increasingly looking at various cloud-based services that can help them achieve their goals. Broadband usage in the country is growing rapidly. Moreover, the country now has 5G. All these factors are expected to drive the market further as better internet speed will provide better cloud infrastructure, leading to market growth during the forecast period.
Also, over the last few years, one of the new growth factors for IT staffing firms has been the growth and expansion of freelancers and the gig economy. Firms hire freelancers who want to work on short-term contracts for single or multi-project associations to carry out specific tasks. Gig/contingent workers are hired for assignment-based, limited-duration tasks and released post-completion. The major driving factor for staffing firms in the US is the connection of the gig economy with web-based labor platforms. Close to 50 million people took up gig work in the US in 2017, pushing the total market value for gig economy spending to more than $800 billion. The numbers above are enough to highlight the implications of using gig workers for IT projects in the future. These workers bring added benefits such as a wide array of skills and the ability to be hired quickly and then relieved of their services as soon as the task gets completed. Although certain challenges, such as hiring the appropriate talent, were there previously, the new day business model in staffing allows the selection platforms to thoroughly scan the skills that a candidate (freelance/gig) will bring into the organization.
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Competitive Overview
The IT staffing market in the US is a highly competitive and fragmented industry comprising large national and local staffing firms. The local firms are typically operator-owned, and each region generally has one or more significant competitors. Vendors in the market also face competition from national and regional accounting, consulting, advisory, national and regional strategic consulting, and systems implementation firms. Several factors, such as expanded reach within the US, physical presence in large markets, the concentration of service offerings in areas of most significant demand, and reputation in the market, all provide a competitive advantage. Vendors also face significant pricing pressure due to competitors’ pricing strategies.
With specialization being one of the key focus areas for vendors in the IT staffing market, major players concentrating on STEM skill sets continue to enjoy growth and profit. Apart from major players, a few mid-tier firms emphasize specializations across industries. Client industries such as tech/telecom, banking, financial services, and healthcare accounted for 61% of the recruitment and offered a strong and positive outlook during the forecast period. This is expected to draw the attention of market vendors looking to realign their business models in the future.
About the Report
The U.S. IT staffing market is provided for forecast years 2023 to 2028 and the base year of 2022. The market is segmented as skill set, end-user, and region for the years considered. The strengths and strategies undertaken by the players have also been mentioned. The report provides a holistic approach to the U.S. IT staffing market to enable customers efficiently analyze the industry.
Key Company Profiles
- TEKsystems
- ASGN Incorporated
- Insight Global
- Randstad
- Kforce
- Experis (ManpowerGroup)
- Acro Service Corporation
- ALKU
- Innova Solutions
- Artech
- Beacon Hill Staffing
- BGSF
- Collabera
- Compunnel
- Consulting Solutions International
- Dexian
- DIVERSANT
- Modis
- Mastech Digital
- MATRRIX
- Mindlance
- NTT DATA
- Optomi
- Robert Half International
- Rose International
- System One
- VACO
- vTech Solution
Market Segmentation
Skill Set
- Software Engineers/ Developers/ DevOps
- Project Management
- Business/Systems Analyst
- Help Desk/ Technical Support
- Software Architects
- QA/Testing
- Networking
- Security
- Data Analytics
- Cloud Computing
- Mobile App Developers
- Others
End-user
- Tech/Telecom
- Banking/Financial Services/Insurance
- Healthcare
- Manufacturing
- Retail
- Others
Region
- United States
- South
- West
- Northeast
- Midwest
Key Questions Answered in the Report
- How big is the U.S. IT staffing market?
- What is the growth rate of the U.S. IT staffing market?
- What are the growing trends in the U.S. IT staffing market?
- Which region holds the most significant U.S. IT staffing market share?
- Who are the key players in the U.S. IT staffing market?
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