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
Apr 3, 2025 - Job Cuts Spike in March Led by DOGE
- Layoffs in the US job market spiked by 205% in March 2025, the third-highest level ever recorded, according to outplacement staffing firm Challenger, Grey & Christmas. The majority of job cuts came from the federal government with billionaire Elon Musk’s Department of Government Efficiency (DOGE) firing 216,000 federal employees. (The previous highs in job cuts were both in 2020 when the pandemic shut down the US economy.) So far this year DOGE has cut 280,000 federal employees across almost 30 agencies, while another 4,500 employees - mainly at non-profits and health organizations - lost their jobs through the cancellation of federal contracts or aid. Challenger’s data also shows that hiring at private sector US companies is slowing with an expected drop of 16% from the same period last year.
- Recruiters and HR professionals are overwhelmed with job applications as layoffs in the tech sector and the Trump administration firing huge swaths of government professionals is leading to a “white-collar recession,” according to recruitment site Appcast. With so many white-collar professionals out of work, recruiters are increasingly turning to AI to help them sort through the massive amounts of incoming resumes. According to HireVue, so far in 2025 about 72% of HR professionals use AI weekly, compared to 54% in 2024. Also contributing to the flood of applications is the wider acceptance of remote work, which no longer restricts job applicants by geography, and workers being less picky about the jobs they do take for fear of a possible recession. While corporations use AI more, job seekers are wary of it, with about 67% saying they didn’t trust it to make hiring decisions, per a recent survey from ServiceNow.
- Leaving your current job for one with better pay is becoming harder to do, according to a survey of US labor statistics by the Federal Reserve Bank of Atlanta. Workers who stayed on the job in January and February 2025 increased their pay by 4.6%, while job leavers increased their pay by 4.8%. It is the narrowest margin between the two groups since 2023 when the salary increase gap was 5.5% for stayers compared to 7.7 for leavers. The tech industry, in particular, has seen contraction in pay increases for job hunters last year, compared to the post-pandemic hiring boom and the bigger salaries that went with it. Given the lower starting salaries and rising layoffs in the overall job market, the 39.6 million Americans who quit their jobs in 2024 fell 11% compared to the year prior (per the US Labor Department).
- The US unemployment rate hovered around a low 4% for most of 2024, but that still translates to roughly 7 million Americans out of work - and 1.6 million of those have been unemployed for more than six months, according to data from the US Department of Labor. The number of workers out of a job that long has risen by 50% in the last two years. Another four million workers are underemployed - those working in part-time or temporary jobs as they continue to look for a full-time position. Other unwelcome job market stats include an average of one job posting per unemployed worker, down from two in 2022, and wage growth that shrank from 6% to 4% year-over-year in November 2024. Healthcare and hospitality industries are still experiencing strong hiring, while office jobs in technology, media, and legal services have been hit with layoffs as employers cut costs.
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