Employment Services

The 30,745 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.

Online Job Sites and AI

The proliferation of Internet job sites and the increasing incorporation of AI to screen candidates and do mundane administrative work 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.

Aug 24, 2026 - Career Growth Stalls for One in Four Professionals

• A large share of white-collar workers are finding that simply staying employed no longer means moving ahead. A study by the Burning Glass Institute and New York University found that roughly one in four professionals experiences a midcareer stall, going at least five years without a meaningful raise or promotion. The problem cuts across industries and has persisted even during strong labor markets, while today’s slower hiring and corporate efforts to trim management ranks are making advancement tougher. Early career momentum appears especially important: workers who later stalled averaged just 30% wage growth during their first decade, compared with 71% among those who continued progressing. The trend raises concerns about employee retention and engagement, particularly when organizations have fewer leadership positions available and employees see limited opportunities to build skills, take on broader responsibilities, or move into higher-paying roles.
• The US labor market is increasingly constrained by a shrinking labor pool and widening skills gap, making hiring alone an inadequate solution. According to the Bureau of Labor Statistics (BLS), the economy lost 23,000 jobs in July, while previously reported May and June gains were revised downward by 103,000 jobs. Gartner’s Jamie Kohn notes that falling labor force participation alongside declining unemployment indicates fewer people are available to work. Employers also face a skills mismatch: only about 3% of job postings currently list AI skills, according to Gartner, even as workers increasingly need capabilities to perform complex tasks and oversee AI output. Labor mobility is also weak; BLS data shows the quit rate at its lowest sustained level since 2020, while Gartner’s employee intent-to-stay index fell from 100 in Q1 2024 to 80 in Q1 2026, suggesting many workers are staying because of economic uncertainty rather than engagement.
• After more than a year of hiring freezes and workforce reductions driven by economic uncertainty and expectations that AI would replace workers, many large employers are beginning to hire again. AI works best alongside people rather than instead of them. The Wall Street Journal reports that companies including Alphabet, CSX, Booz Allen Hamilton, ServiceNow, and Snap-on have recently announced plans to expand headcount in areas such as AI, cloud computing, cybersecurity, sales, and transportation. Booz Allen, whose workforce fell 7.5% year over year to about 30,900 employees after federal contract cuts, said it now needs to accelerate hiring to meet demand. Human resources software provider Lattice says many employers are also resuming entry-level recruiting after realizing AI still requires human oversight and AI-skilled workers. The shift suggests companies are recalibrating expectations about AI's near-term impact on employment rather than preparing for widespread workforce replacement.
• Despite a seemingly strong US labor market, nearly 2 million Americans have remained unemployed for six months or longer, highlighting a growing divide between improving headline job numbers and the experience of many job seekers. The Labor Department reported that 27.3% of unemployed workers had been out of work for at least 27 weeks in June, near the highest share since late 2021 and up four percentage points from a year earlier. Economists say employers remain in a "low-hire, low-fire" mode, with hiring rates largely unchanged for the past two years despite steady job growth and a 4.2% unemployment rate. White-collar fields, including professional services, finance, information technology, and government, have been hit especially hard, leaving many experienced workers struggling to find new roles. Extended unemployment can erode skills, drain savings, reduce lifetime earnings, and increase pressure on workers to accept lower-paying jobs or change careers altogether.

Industry size & Structure

A typical employment services firm has about 255 employees and annual revenues of $18 million.

• The overall industry consists of about 30,745 firms with 7.9 million employees and generates around $556.1 billion in annual revenue.
• About 58% 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.
• Temp workers average 35 hours per week per the US Bureau of Labor Statistics.
• Services are provided to customers in all employment segments.
• With limited capital costs associated with start-up, there is little barrier to entry into this field.