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
Mar 20, 2025 - Salary Bumps for Job Hunters Decrease
- 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).
- Diversity, equity, and inclusion (DEI) practices are being slashed at large companies given the political climate and the Trump administration’s slew of executive orders banning DEI initiatives across the federal government. Wall Street is fearful of running afoul of anti-DEI forces among the feds which are banning DEI programs from federal contractors and directing authorities to investigate “illegal DEI” practices at public companies. High profile DEI scalebacks include Amazon, Meta, Walmart, Starbucks, Ford, Boeing, McDonald’s, and Target. Other companies, however, have doubled down. Apple asked its shareholders to retain its DEI policies, and Costco’s board of directors convinced 98% of stockholders to retain its initiatives. Cancelling DEI can also receive significant pushback, as Target after it cut the initiative after touting it as a company policy for years. Some shareholders have filed a fraud lawsuit against the retailer as a result.
- 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.
- Return-to-office mandates continue to increase as employers increasingly sour on employees working from home. A KPMG survey from 2024 found that among 400 US CEOs, about 80% thought employees would be back in the office full time by the end of 2027. Big employers that have recently mandated a return to full time in-office work include Amazon, JPMorgan Chase, WPP, and AT&T. Employees, though, after finding more work-life balance during and after the pandemic, still favor remote or hybrid work in some form. The issue has become a heated push and pull between employers who want more in-person collaboration, and employees who have grown accustomed to the flexibility remote work provides. Per LinkedIn, 1 in 10 workers want to change jobs over the issue. Industries where remote/hybrid job listings increased last year included non-profits, insurance, finance, and technology, according to ZipRecruiter.
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