Employment Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 30,000 employment services firms in the US offer a wide range of employment-related services and solutions, including temporary and contract staffing, permanent placement, recruiting, outsourcing and outplacement, training, and human resource consulting. The industry is organized along three distinct segments: temporary help services, employment placement agencies, and professional employer organizations.
Internet Job Services
The proliferation of Internet job boards has made it easier for companies to advertise openings and find applicants on their own.
Growth of Flexible Workforces
Companies are placing increased value on the ability to quickly adjust to market conditions.
Industry size & Structure
A typical employment services firm has about 121 employees and annual revenues of $19 million.
- The overall industry consists of about 30,000 firms and generates around $575 billion in annual revenue.
- 56% of firms have less than 10 employees.
- The top 4 firms account for over 25% of industry revenue. The largest employment services firms include Adecco, Kelly Services, Manpower, Spherion, and Kforce.
- Workers average 34.6 hours per week, comparable to permanent employees.
- Services are provided to customers in all employment segments: Manufacturing, services, and government.
- With limited capital costs associated with start-up, there is little barrier to entry into this field.
Industry Forecast
Employment Services Industry Growth
Recent Developments
Dec 4, 2024 - Workers Seeking to Change Jobs Hits 15-Year High
- As hiring has slowed, more white-collar workers want to change jobs, according to The Wall Street Journal. A November Gallup survey of 20,000 workers showed that more than half said they were watching out for or were actively seeking a new job, marking the highest level of white-collar job seeking since 2015. However, unlike the so-called Great Resignation of 2021 and 2022, when millions found new jobs with better pay, hiring and wage growth have slowed. According to Gallup, workers are increasingly dissatisfied amid smaller raises, fewer opportunities for advancement, added responsibilities, and increased office attendance requirements. While job dissatisfaction seems to have risen, fewer workers are quitting. In September 2024, about three million people quit their jobs, compared to about 2.5 million who did so the same month a year earlier.
- According to a survey released by SmartRecruiters in December, 60% of business leaders worry that they have hired the wrong person. The survey also showed that 45% of leaders spend more than half of their time on tasks related to hiring. The leading negative impacts caused by ineffective hiring were damaged brand reputation (30% of respondents), weaker sales performance (29%), slower business growth (28%), and reduced service quality (28%). About 56% of those surveyed said the recruiting process has become more complicated in recent years due to the rises in digital nomads, international employees, and remote work. SmartRecruiters’ survey included business leaders at 500 companies in North America, the UK, and Australia.
- In mid-November, a federal judge in Texas struck down a Department of Labor (DOL) rule that expanded overtime pay for US workers. In April 2024, the DOL issued final regulations that raised the salary threshold for white-collar workers to receive overtime. As a result of the DOL rule, the annual salary threshold increased to $43,888 from $35,568. The Texas court ruling now blocks a second increase raising the threshold to $58,656, which was scheduled to take effect in January 2025. Under the Fair Labor Standards Act, employers must pay overtime for working more than 40 hours per week. However, salaried workers with some executive, administrative, and professional (EAP) duties and a minimum salary are exempt from the overtime rule. The federal judge in Texas ruled that by setting the salary threshold as high as it did, the DOL created a “de facto ‘salary only’ test for the EAP exemption.” The Texas court ruling will strip overtime eligibility from an estimated 1 million workers. The Texas lawsuit was brought by a coalition of business and trade associations led by the Chamber of Commerce in Plano, Texas.
- Some legal recruiters report that President-elect Trump’s plans to trim the ranks of government workers is prompting some rank-and-file government lawyers to look for work in the private sector, according to Reuters. One recruiter speaking to Reuters said he’s seeing five times the typical post-election volume of lawyers seeking to leave government work. According to the US office of Personnel Management, there are more than 44,000 licensed attorneys who work for the federal government. Legal industry insiders suggest lower-level attorneys with narrow areas of expertise may have trouble finding new positions in the private sector.
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