Staffing Industry Trends – February 2026

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Staffing Stats: Early 2026 Trends

Staffing activity began in 2026 on a softer note, with the American Staffing Association reporting that its Staffing Index fell from 88 in late December to 81 by late January, signaling reduced demand. At the same time, layoff announcements spiked to 108,435 cuts, while job growth remained modest, and labor force participation continued to hover near 62%, reinforcing ongoing talent scarcity and workforce pressure for employers.

👉 Learn more trends to watch in staffing.

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The Evolution of Workplace Drug Testing- What Employers Need to Know for 2026

With more States legalizing marijuana and the strong possibility that marijuana could be reclassified as a Schedule III drug, the legal landscape for workplace drug testing is likely to see some significant changes in 2026.

This National Law Review article outlines key federal and state policy shifts, emerging employer challenges, and steps businesses can take to prepare for 2026.

👉 Read the article from The National Law Review

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Manage Client Expectations in 2026

Managing client expectations is more than good practice; it’s a competitive advantage for staffing agencies in today’s tight labor market. This article from All Things Staffing shares practical strategies to strengthen client relationships, improve communication, and support long-term partnerships.

👉 Read the full article to learn how to better align with clients and protect your reputation.

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Create Demand by Asking the Right Questions

Are clients saying they don’t have the budget to bring on new hires? As we move through Q1, staffing clients assess their hiring needs. Some will be ready to bring on new hires, and others will stall based on “wait and see” factors in the economy. Ask the right questions and lead them down the path of “self-discovery” that they need resources and a better process to hire!

Here’s how to uncover their paint and be resourceful in finding budget for new hires:

• What is your budget $ annually for staffing – contract and perm?
• What is your fiscal year, and what is your annual budgeting process?
• How do you determine which initiatives get priority?
• If you have no staffing budget, can you redirect funds from another unused area, line item, or department?
• Do you ever bring contractors on board? They can absorb the extra workload and ramp up quickly. (Educate on the benefits of contractors.)
• Do you bring on contractors using a Statement of Work (SOW) or a PO?
• Are you short-staffed right now?
• How is the work getting done?
• What impact and cost does that have on you, the team, and the business?
• Are deadlines slipping or being missed?
• Are people working overtime to get the job done, and are any a flight risk?
• What will you do if this short-staff situation continues?
• How long are you willing to wait?
• Provide market, geographic, and skill-set information to help them justify new perm/contract hires in 2026!

Need help transforming your staffing sales performance? Contact Kim Henderson, staffing sales trainer & professional speaker at Cobalt Compass Solutions, LLC.

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Cash Flow Strategies to Stay Flexible While Scaling

Meeting weekly payroll while waiting 30, 60, or even 90 days for client payments remains one of the biggest financial pressures for staffing agencies. With margins tightening and growth slowing, managing that cash flow gap is critical to staying competitive in 2026.

This article breaks down how invoice factoring works and why it remains a practical solution for staffing firms navigating payroll demands and extended payment terms.

👉 Read more to see how factoring can help stabilize your cash flow.