This week’s StaffingHub Brief covers a fragmented labor market sending conflicting signals ahead of the official jobs report, a landmark Conference Board survey that puts AI at the top of the CEO risk list, a DOL proposal that redraws the independent contractor line, candidate fraud crossing into operational liability, and new data on why the Great Stay keeps making staffing’s recovery hard to call.

Key takeaways:

  • 📊 Staffing hours hold near YTD highs through the holiday. The SIA | Bullhorn Staffing Indicator fell from 75 to 74 during Presidents’ Day week but held 2% above the same week in 2025, the best year-over-year gap in two years. Commercial hours posted their strongest YoY performance since late 2024.
  • 📈 ADP shows 63,000 private sector jobs added in February, but read the fine print. Education and health services drove the headline. Professional and business services shed 30,000 jobs. The pay premium for switching employers hit a record low.
  • 🤖 For the first time, CEOs rank AI as their biggest business risk. A Conference Board quarterly survey found AI edged out geopolitical instability by one percentage point and cyber by four. The share of CEOs planning to increase capital spending jumped from 22% to 35% in a single quarter.
  • ⚖️ The DOL just proposed a new worker classification rule. The February 26 proposal replaces the Biden-era independent contractor standard with a more business-friendly “economic reality” test. Public comments close April 28.
  • 🔍 Candidate fraud is no longer a recruiting inconvenience. SIA’s Staffing Trends 2026 report found 41% of staffing buyers believe their organization is experiencing candidate fraud challenges. Generative AI has made synthetic resumes and coached interview responses a volume problem.
  • 💼 The Great Stay has hard numbers now. First-year turnover dropped from 23.7% in 2024 to 12.1% in 2025, a 48.9% decrease. And healthcare, the industry still propping up the labor market, is narrowing who it’s willing to hire.

📊 The market is sending mixed signals, and the next 13 weeks will tell us more

  • Staffing hours held near year-to-date highs despite Presidents’ Day. The SIA | Bullhorn Staffing Indicator fell from 75 to 74 during the holiday week but held 2% ahead of the same week in 2025, the best YoY gap in two years. Commercial hours posted their strongest year-over-year result since late 2024. Notably, in both 2024 and 2025, the last week of January marked the first-half high-water mark. That pattern hasn’t held in 2026, which SIA flags as a potential sign of a stronger trajectory ahead. The holiday-free stretch through Memorial Day should give staffing leaders the clearest market read they’ve had all year. (Learn more)
  • ADP’s February report showed 63,000 private sector jobs added, the best result since November 2025. Education and health services led with 58,000 new positions; construction added 19,000. But professional and business services shed 30,000 jobs. Small firms drove 60,000 of the gains while large employers added only 10,000. The pay premium for switching jobs hit a record low. Workers who aren’t moving aren’t generating replacement demand.[(Learn more)
  • Revelio Labs’ February data shows a net loss of approximately 17,000 jobs, with retail and leisure and hospitality driving the decline. Healthcare, professional services, and financial activities posted positive growth. Salaries in new job postings dipped 1.4% from January. (Learn more)

Why it matters: The professional services contraction is a direct hit to staffing’s higher-margin segments. Firms still weighted toward white-collar contract work need to be watching this gap widen.

🤖 Your clients just declared AI their number-one risk

  • For the first time, CEOs rank AI as the biggest risk to their businesses, ahead of geopolitical instability, cyber, and financial uncertainty, per the Conference Board’s Q1 2026 quarterly survey published February 26. AI edged out geopolitics by one percentage point and cyber by four. In response, the share of CEOs planning to boost capital spending surged from 22% last quarter to 35% this quarter. CEO confidence also reached its highest level since Q1 2025. (Learn more)
  • On the operations side, staffing leaders are actively deploying AI, not piloting it. StaffingHub’s latest piece profiles five concrete applications firms are using right now, from AI-powered resume parsing to automated outreach to real-time market intelligence. (Learn more)

Why it matters: When your clients rank AI as their top risk and simultaneously accelerate capital spending, staffing firms that can’t speak to AI-driven workforce strategy at the C-suite level will get routed to procurement.

⚖️ The DOL just rewrote the contractor test

  • On February 26, the DOL proposed a new rule replacing the Biden-era worker classification standard. The proposal returns to an “economic reality” test and identifies two “core factors” as the most reliable indicators of employee status: the degree of control a worker has over their work and their opportunity for profit or loss. Wage and Hour Division Administrator Andrew Rogers said the rule would “improve compliance, reduce misclassification and reduce costly litigation.” The proposed rule was published in the Federal Register on February 27. Public comments are due April 28, 2026. (Learn more)

Why it matters: This is an active compliance window, not a background development. Firms using IC arrangements should audit classification practices now, before the final rule lands and the comment period closes.

🔍 Candidate fraud has crossed from recruiting headache to operational risk

  • 41% of staffing buyers report their organization is experiencing challenges with candidate fraud, per SIA’s Staffing Trends 2026 report. Remote hiring lowers barriers to impersonation; generative AI makes fabricated resumes and AI-coached interview responses easy to produce at volume. Amazon disclosed blocking more than 1,800 job applications from suspected North Korean operatives. Traditional ATS tools weren’t built for this threat level. Staffing firms are the first line of defense for their clients, and they typically carry the reputational and operational liability when a fraudulent placement gets through. (Learn more)

Why it matters: Firms that build layered verification into their process can sell it as a differentiator; firms that wait for a high-profile incident will pay for it in client trust.

💼 The Great Stay is real, the data is in, and it’s making recovery harder to call

  • First-year turnover dropped from 23.7% in 2024 to 12.1% in 2025 (a 48.9% decrease), based on data from 6,640 companies using Jobvite, Lever, and JazzHR, per Employ Inc.’s 2026 Hiring Benchmarks Report. BLS data confirms the trend: quits remain flat and unemployment is steady. Workers are staying put out of fear, not satisfaction, compressing the replacement demand that staffing firms depend on. (Learn more)
  • Healthcare has backstopped the labor market, but its hiring aperture is narrowing. Indeed Hiring Lab analysis published March 3 shows non-healthcare-oriented roles made up just 35% of job postings at healthcare employers in January 2026, down from 43% in 2018. Healthcare is concentrating its hiring on clinical roles only, shrinking its capacity to absorb workers displaced from other sectors, and reducing opportunities for staffing firms placing non-clinical talent into health systems. (Learn more)

Why it matters: The Great Stay suppresses replacement demand across the board. Growth has to come from workforce augmentation, project-based staffing, and skills-gap fills, not churn.

The StaffingHub Brief provides weekly insights for staffing agency leaders and publishes every Friday. Want to get essential staffing industry news delivered to your inbox? Sign up for our weekly and daily newsletters.

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