When you lead an organization like TechServe Alliance, it provides you with a bird’s eye view of the industry and key trends. Spending each day connecting with owners and executives of IT staffing firms, you hear about both their opportunities and challenges.
Moving into the second quarter of an undeniably challenging year, TechServe CEO Mark Roberts sat down with Subadhra Sriram, founder and host of Workforce Observer Podcast, to share his perspective on where the industry is now, and where we’re going.
Current status: It’s complicated
Roberts points out that the current state of the industry must be viewed with some perspective. 2024 began under the continuing cloud of a potential recession. Geopolitical tensions were multiplying. And domestically, the election campaign was well underway and cast a pall over business decision-making. Additionally, the sector was still resetting after back-to-back high-growth years. “During the post-COVID high, the median firm in our industry showed double-digit growth two years in a row,” says Roberts. “That’s just not sustainable.”
The market has been correcting for the over-hiring that took place in post-COVID years. Revenue for the IT staffing industry is either flat or down for most firms, and unfortunately, 2025 has not offered much relief so far. There’s upheaval in Washington, and a great deal of uncertainty around the shift in policies impacting the economy.
Uncertainty isn’t a good thing for any industry, and it is certainly causing demand-side pressure in ours. “People don’t know where to place their bets,” Roberts says. As a result, budgets aren’t being released, or worse, they’re being scaled back. Non-essential spending is being cut.
On the supply side, the availability of talent isn’t without challenges, either. Given the uncertainty, more people are choosing security and stability, staying where they are. “Anytime movement of talent is restricted, and people are frozen in place,” Roberts says, “it’s not good for the industry.”
What does the future hold?
“There’s one thing I know about the future with 100% certainty: it’s going to be different,” Roberts says. “But saying that, I’ve never been one to adopt overly optimistic or pessimistic views.”
The biggest present-day hurdle, in Roberts’ view, is anemic client demand. He sees it in the data TechServe gathers from industry stakeholders. And that data tracks with information from the filings of publicly traded firms.
Compounding that challenge, clients are looking for firms to do more. It may be SOW work or managed services. It may be higher-level consultancy and a deeper level of understanding of their business: an expectation that IT staffing firms will do more than just provide a consultant with the needed skill set. Additionally, there’s an increasing level of competition from more traditional consulting firms to offshore resources.
This isn’t to paint a doom-and-gloom picture, however. For Roberts, it simply means that companies need to do a better job of differentiating themselves in the marketplace.
“The old line, ‘We provide wonderful people and great service,’ that’s not going to cut it anymore. What do you bring to the table that is unique or at least special? Why are you the go-to resource for your clients?”
The nature of the staffing industry is such that some companies will do very well, while others just manage. But Roberts points out one fundamental truth: “If you can solve your clients’ problems, that’s the recipe for success.”
What about AI?
“I would say that it’s probably overhyped in the short term, but underhyped in the long term,” Roberts says.
AI certainly offers the opportunity to automate manual tasks, improving efficiency for firms of all sizes.
On the other hand, there is the risk that AI may enable more clients to engage in direct sourcing, eliminating some business for the staffing sector. And of course, some IT functions – basic coding, for example – could ultimately be replaced altogether by AI. Arguably, the risk is lower for the U.S. in that respect than in some other areas of the world that rely on lower-cost labor as their primary value proposition.
Businesses are simply not yet at the point where humans can be replaced by AI at scale. But there is certainly a lot of investment in some quarters in leveraging AI and automation. Which, of course, leads to even more uncertainty going forward.
“I don’t think anyone who says with confidence that they know where we’ll be with AI in five or ten years, truly knows what will happen.”
In closing: Advice for growing your staffing business
Leading a staffing company can be a lonely and isolating role with seemingly endless front-burner priorities.
The best advice Roberts offers is this: leaders should pull away from the day-to-day periodically to take the opportunity to think strategically about the industry, their business, and their path forward; To connect with others, learning from their mistakes and successes.
This is the primary objective of the opportunities for collaboration that TechServe Alliance provides. From the annual conference, TechServe Alliance Executive Summit, to the virtual roundtables, peer-to-peer networking and education is at the core of the organization’s work — facilitating knowledge sharing between industry colleagues with the goal of accelerating growth and profitability.
In a climate of uncertainty, TechServe Alliance strives to provide a stable touchpoint and resource for the industry firms. “We define our success by the success of our members and stakeholders. If they’re better at what they’re doing, able to grow more, and able to serve their clients better … that, for us, is success.”
To listen to the full podcast, click here.
