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 28,200 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 137 employees and annual revenues of $20 million.
- The overall industry consists of about 28,200 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
Recent Developments
Apr 4, 2024 - Steady, Moderate Industry Growth
- The US employment services industry is forecast to notch steady growth for the next several years following expected sluggishness in 2024. The industry’s year-over-year sales increased by 13.5% in 2022 and 7.6% in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth is projected to slow to 4.1% in 2024, then rise to 6.6% in 2025. The industry will then see stronger and steady average annual growth of about 7.7% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
- Amid an overall cooling of the tech jobs market, hiring for roles related to artificial intelligence (AI) is proving resilient, according to The Wall Street Journal. In January 2024, AI job listings were up 42% compared to December 2022; overall, IT job listings declined 31% over the same period, according to an AI job tracking tool developed by researchers at the University of Maryland. The tracker defines AI jobs as requiring skills in AI models or algorithms. After overhiring during the pandemic, some tech firms are reallocating resources to emphasize AI and are paying higher salaries to lock in top talent. According to listed pay ranges for openings on job site ZipRecruiter, AI-related jobs can command tens of thousands of dollars more than tech jobs in other fields.
- In April, payroll firm ADP issued a report indicating US private sector payrolls increased by 184,000 in March 2024, up from the upwardly revised 155,000 in February. Job gains in March marked the biggest monthly gain in employment since July 2023. Medium-sized businesses added 93,000 positions, and large establishments saw 87,000 new jobs. Small companies saw a job boost of 16,000. Among specific sectors, leisure and hospitality posted the most significant gains in employment, with 63,000 new jobs, followed by construction (33,000), trade/transportation/utilities (29,000), education and health services (17,000), and financial services (17,000).
- US average shift work volume increased by 0.9% in March compared to the prior month, according to data compiled by HR solutions firm UKG. March marked the second consecutive month of shiftwork gains, and UKG noted that the labor market remains strong despite economic uncertainties. Except for healthcare, which saw shift work drop 0.1%, all major industry sectors tracked by UKG saw shift work grow in March. Retail, food service and hospitality saw the largest gains in March, with a rise in shift work of 1.5%, followed by manufacturing (1.3%) and services and distribution (0.8%). The UKG Workforce Recovery Scale, which compares shift activity to pre-pandemic levels, rose to 99.7 in March compared to 97.2 in February.
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