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
Feb 10, 2025 - Low Unemployment Rate Masks a Tougher Job Market
- 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.
- 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.
- 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.
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