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 28,500 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 107 employees and annual revenues of $15 million.

    • The overall industry consists of about 28,500 firms and generates around $430 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 34-35 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

                            Oct 24, 2022 - Survey Reveals Decline in Job Engagement
                            • A workforce survey from The Conference Board polled the first week of September 2022 found that nearly a third of workers, predominately office workers, reported decreased engagement - the commitment and connection that they feel to their work - compared to six months ago. More women, Millennials, and individual contributors reported lower engagement than men, older generations, and executives. Workers’ intent to stay at their jobs decreased for 37% of respondents, however, only 12% were actively planning to leave with 29% reporting that the imminent recession has them thinking twice about quitting. Besides a competitive salary, 70% of respondents said options for workplace flexibility, which includes location and houses, were among the most important job factors followed by company contribution to a retirement plan (65%) and generous paid time off (61%). Just under half of workers said pay was not the most important part of choosing a job.
                            • Recruiters for the tech industry are seeing a pull-back in demand as the economy slows and tech industry executives focus on reining in costs to protect profits, according to The New York Times. A decade-long tech boom that fueled high stock prices, salaries, and valuations created fierce competition for workers, and the industry turned to recruiters to lure the best talent. But as the economy has weakened, some tech firms have become more cautious. Netflix, Tesla, Peloton, Shopify, Redfin, and Oracle have laid off staff. Other major tech firms have slowed hiring, announced hiring freezes, or rescinded job offers. Some recruiters have reduced their rates by as much as 30% or turned to consulting to make ends meet.
                            • As of October 20, 2022, job postings on Indeed were 49.9% higher than on February 1, 2020 – Indeed’s pre-pandemic baseline. Many sectors are experiencing steady growth in job postings, including pharmacy (+77.9%), production & manufacturing (+89.2%), logistics support (+65.2%), human resources (+60.6%), banking & finance (+58%), construction (+67.1%), and childcare (+72.1%). Sectors performing close to the average for all US postings included software development (+55.8%), cleaning and sanitation (+55.1%), and driving (+53.1%). Sectors that showed weaker than average growth included arts & entertainment (+31.5%), food preparation & service (+37.3%), retail (+36.8%), hospitality & tourism (+17.3%), and beauty & wellness (+13.9%).
                            • Staffing platforms are likely to help fuel the growth of the gig economy, according to Staffing Industry Analysts (SIA). The US gig economy is currently valued at $1.7 trillion. Staffing platforms – two-sided marketplaces that use an employer-of-record model to connect workers with clients – are expected to experience strong growth. Temporary staffing platforms grew 190% in 2021, led by the healthcare sector. The SIA suggests the growth in healthcare staffing is a strong signal of the future for other industry sectors. Staffing platforms currently have more than 20% of the healthcare staffing market. According to the SIA, the gig economy includes temporary workers from staffing firms, directly-sourced temporary workers, platform-related work, statement-of-work consultants, and independent contractors.
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