Artificial Intelligence Tools, Digital Automation, and the Future of the Staffing Industry: A Conversation with BJ Hoffman

BJ Hoffman is Citrin Cooperman’s Professional Services Industry Practice’s leader, and co-leader of the Staffing Industry Practice, with over 25 years of experience in audit, tax, and litigation support services. He serves clients in a wide range of industries, including closely held entities in staffing, healthcare, franchising, and law firms.

Michael Napolitano is co-leader of the Staffing Industry Practice, providing counsel and services in areas of profit enhancement, budgeting, planning, and compensation restructuring to help clients operate more efficiently for more than 25 years.

Napolitano: Can you speak about the profound changes going on right now in the staffing industry?

Hoffman: The staffing industry is at a crossroads; we've seen an annual decline in revenues from 2022 to 2025 in many of our industry verticals ranging from 10-20%. Certainly, these are challenging times, but it's important to remember that this is on the heels of what we might term “the golden years” of staffing. From 2010 through 2019, the U.S. economy was robust and there was certainly plenty of financial rewards available to staffing industry owners from the strong labor market. Even during the pandemic era, 2020 to 2022, which was troublesome for so many industries, staffing tended to do well because of governmental funds from the Paycheck Protection Program (PPP) and the Employee Retention Tax Credit (ERTC) that benefitted the industry.

Napolitano: To that end, what are some of the biggest opportunities in the staffing industry today?

Hoffman: We are fortunate to be able to work with numerous staffing companies of all shapes, sizes, and geographies throughout the United States. We are seeing a lot of opportunities right now, particularly in the AI space. AI should be thought of as a way for staffing firms to automate what would otherwise be mundane and error-prone activities, allowing internal staff to focus on more valuable, customer-centric, and consultative services. AI can also increase recruiter efficiency and enhance candidate onboarding experience.

Updating finance and accounting operations is another huge area of opportunity. It's critical for staffing leaders to have accurate and timely financial records, budgets, and benchmarks to compare against industry peers to determine where financial anomalies exist. It’s important to maintain a robust internal finance and accounting team so that management has the tools with which to make key decisions.

Napolitano: You've been in the staffing industry for a long time and have seen a lot of growth and decline. What do you see the most successful leaders doing to guarantee their success?

Hoffman: It's really important for owners of staffing firms to spend time with their data and to analyze where they stack up against their peers. Firms are at risk of becoming stale, doing business the way they did business for years, without embracing the changes necessary to avoid a decline. You need to look at your numbers. You need to talk to other specialists. I think leaders that are willing to do that are much more successful compared to those that just keep doing things the same way year after year. The days of being mere sales order takers are behind us. Staffing firms have to provide solutions to their customers for their labor needs and not just fill orders.

Napolitano: We see ERP systems and ERP implementations significantly impacting the business landscape. You’ve worked with a lot of staffing firms that have gone through the arduous and costly process of implementing new software solutions. What do you see as some of the industry best practices?

Hoffman: There's certainly a cost to implementing new IT systems, not only in the dollars invested but in the cultural and operational shift that has to occur to make these transitions successful. We see a lot of firms that refuse to make that investment and ultimately become laggards. They don't have the best equipment, they don't have the most up-to-date information, and they are operating as they did yesterday instead of as they should tomorrow. Those that do make the necessary investment and are willing to change the way they do business often find themselves with better information, better profits, and an ability to attract a better team. When making a change to a new system, there must be an investment in training and policies and procedures. Many companies make this large investment and then fail to provide the proper training, leading to a lack of full system utilization.

Napolitano: What about opportunities around digital automation and AI in the staffing industry in the next few years?

Hoffman: The future really does seem to be AI-centric and focused on transitioning mundane and error-prone tasks; the onboarding of employees, the matching of candidates against job requisitions, etc., into automated processes. This frees up internal staff and resources to focus on what's important, which is strategy, and providing amazing services to customers. That is critical and it's where everything is headed.

Napolitano: Do you see the staffing industry going to a smaller leadership core as a result of AI, with technology picking up a significant volume of tasks? Or do you see AI enabling organizations to grow their internal staff with new roles?

Hoffman: I think AI tools are game-changers, and the answer is both. AI enables you to retain your existing staff and redeploy them to more effective, value-oriented services for customers. It can also make you more profitable and allow you to invest in other business lines. I see AI and digital automation as a win-win, although it is still early and there are some risks in being an early implementer. Early implementers sometimes end up “reinventing the wheel,” which comes with added costs, and at times, some risk of failure.

To learn more about how Citrin Cooperman’s Staffing Industry Practice can help your organization thrive amidst uncertainty, please reach out to BJ Hoffman or info@citrincooperman.com.