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 34-36 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
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            Jul 3, 2024 - Small Businesses Keep Labor Market Strong
                            • While the Federal Reserve’s inflation-fighting interest rate hikes have helped to cool the US job market, the drop in job openings hasn’t been even across all employers, according to The Wall Street Journal. Small businesses’ appetite for workers largely fuels the robust labor market. In April, companies with fewer than 50 employees had about 50% more job openings than they averaged in 2019 before the pandemic. Over the same period, large firms posted about 14% fewer new jobs. The steady demand for workers among small firms surprises some labor economy watchers as small businesses, which are dependent on bank loans for start-up and operating capital, are extremely sensitive to higher interest rates. Some experts suggest that solid consumer demand may be enough to help small businesses offset their higher borrowing costs, allowing them to keep hiring.
                            • US average shift work volume was flat in June compared to the prior month, according to data compiled by HR solutions firm UKG. June is typically a strong month for labor markets, so an early-summer slowdown in shift work could signal the hot jobs market is cooling. While most major industry sectors tracked by UKG saw growth in shift work, gains were muted. Services and distribution saw the biggest gain in June shift work with a rise of 0.5%, followed by retail, foodservice and hospitality (0.2%), and healthcare (0.1%). Shift work in manufacturing declined 0.1% in June from May. The UKG Workforce Recovery Scale, which compares shift activity to pre-pandemic levels, rose to 99.9 in June compared to 98.9 in May.
                            • More C-suite leaders are becoming sensitive to the notion of “human sustainability,” – which helps companies bring more value to the lives of their team members, according to a June report by Deloitte and Workplace Intelligence. About 80% of organization leaders surveyed said they felt more pressure from workers, customers, boards of directors, and investors to put more emphasis on human sustainability. However, there is a gap between management and labor in human sustainability perceptions. More than 80% of executives feel their organization has advanced efforts toward human sustainability, but only 56% of employees feel the same way. Strategies for improving human sustainability include offering benefits that enhance team members’ well-being and addressing burnout by increasing flexibility and reducing workloads.
                            • Fresh college graduates are entering a job market that’s still healthy, and wages continue to grow, but some companies are pulling back on hiring for entry-level positions this year, according to The Wall Street Journal. A recent survey of about 225 employers by the National Association of Colleges and Employers found that firms plan to hire nearly 6% fewer new graduates than they did in 2023. According to research and analytics firm Veris Insights, by April 2023, about a third of graduating seniors had accepted a full-time position. By the same time this year, only 25% had secured a job. Some recruiting industry observers suggest AI is impacting demand for entry-level, white-collar positions by either automating some entry-level tasks or by requiring applicants to have skills in using AI. Recent college grads are also competing with junior-level job seekers who recently lost their jobs and have more experience.
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