Key takeaways:
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Client shortage replaces talent shortage: Finding new clients is now the top challenge (23% vs. 16% in 2024), while candidate shortage concerns dropped to just 12% of agencies.
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Referrals are underutilized: Fast-growth agencies are 52% more likely to use referral software, with 86% having formal programs vs. only 60% of no-growth agencies.
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Systematic approach wins: 71% of fast-growth firms rate referrals as “extremely important” and 47% report referrals have their highest placement rates, yet 30% of all agencies still lack referral programs.
The staffing industry has officially shifted from a talent shortage to a client shortage. According to the 2025 State of Staffing report, finding new clients has become the top challenge for 23% of agencies — up from just 16% in 2024. This represents a fundamental market shift that’s catching many firms off guard.
Gone are the days when candidate scarcity dominated industry concerns. Today, only 12% of agencies report facing a shortage of candidates (down from 17% in 2024), and just 9% cite difficulties finding qualified talent (down from 12%). The tables have turned: clients, not candidates, are now the scarce resource.
The new reality: A client-focused market
This shift reflects broader economic uncertainty. As one survey respondent explained, “While there is pent-up demand for contingent and direct labor, companies remain hesitant to staff up due to economic uncertainty. Many organizations are operating with financial conservatism, almost as if bracing for an impending downturn.”
Along with client acquisition struggles, 16% of agencies cite “getting job opportunities/orders” as a major challenge — another indicator that demand, not supply, has become the bottleneck.
By April 2025, a pulse survey showed these challenges persisting, with agencies reporting:
- “Finding clients ready to hire staff”
- “Slow down in job orders with clients”
- “Job orders are low, very little direct hire, wait and see mentality”
The underutilized solution: Referrals
While agencies struggle to find new clients, many are underutilizing their most powerful acquisition tool — referrals. Though often viewed through the lens of candidate sourcing, referrals can also be valuable for generating warm client leads.
Fast-growth agencies are 52% more likely to use referral software and approach referrals with systematic precision:
- 86% have formal referral programs (vs. just 60% for no-growth agencies)
- 71% rate referrals as “extremely important” (vs. 53% overall)
- 47% report referrals have their highest placement rate
Yet across the industry, 30% of agencies still don’t have referral programs at all, and only 19% of those with programs use automated referral management platforms.
Why referrals work in tough markets
Referrals aren’t just another lead source — they’re relationship accelerators. In times of economic uncertainty, clients rely more heavily on trusted recommendations. A referred prospect comes with built-in credibility and shortened sales cycles.
The industries seeing the highest referral adoption — healthcare (80%), clinical/scientific (77%), and office/clerical/administrative (75%) — also tend to have more stable client relationships and higher placement rates.
Referrals can also spark client-side opportunities, not just candidate ones. For example, placed candidates may refer former managers who are hiring, or even bring their next employer into the agency’s orbit. Successful placements often have insight into companies that are expanding or teams needing help — a highly valuable source of warm leads.
The action plan
This isn’t about replacing human relationships — it’s about systematizing the processes that support them, including identifying how candidate relationships can lead to new client opportunities.
“In times of scarcity, both clients and candidates recognize the value of a personalized, high-quality approach. Those who prioritize relationships, expertise, and true partnership will stand out and thrive.”
For agencies struggling with client acquisition, the solution is to work smarter, not harder:
- Formalize your referral program: If you don’t have one, you’re leaving money on the table.
- Automate referral management: Use technology to track, nurture, and reward referral sources.
- Measure referral ROI: Focus on quality of hire (31% of agencies call this their top metric) rather than just cost-per-hire.
Want the complete client acquisition playbook? Download the full 2025 State of Staffing report for detailed strategies, industry benchmarks, and proven tactics from agencies that are winning despite the challenging market.
