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
Jan 6, 2025 - Job Searches Lengthen for White-Collar Workers
- While the US labor market appears healthy, unemployed white-collar workers are having to search longer to land jobs, according to The Wall Street Journal. About 1.6 million jobless workers have been hunting for at least 6 months, which is 50% longer than at the end of 2022, according to the Labor Department. While jobs are plentiful in the healthcare and hospitality sectors, white-collar positions in tech, law, and media are scarcer. Hiring for office work boomed in the immediate wake of the pandemic, but firms are now running leaner, and some workers have been replaced by AI. At the end of 2024, job postings on Indeed for marketing, data science, and software development positions were down 20% compared to pre-pandemic levels. In other pockets of the job market, hiring has remained robust. Over the last 12 months, the healthcare and government sectors have accounted for half of all job creation.
- While most employers are implementing return-to-office requirements, they realize the need to balance in-office work with the value that employees place on working from home, according to a recent survey by advisory firm WTW. About 61% of US companies surveyed said they had implemented a formal policy requiring employees to be in the office for a minimum number of days per week. The most cited reasons for in-office requirements included better engagement within teams (84% of respondents), reinforcing corporate culture (71%), and increasing productivity through better collaboration (64%). However, firms recognize that many workers value remote work. When asked about the leading benefit of remote work, 84% of those surveyed said attracting and retaining talent for roles that would go unfilled without remote work options, 78% said better work-life balance improved engagement, and 76% said remote work improved retention.
- 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.
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