Employment Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Quarterly Insight, 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
Coronavirus Update
Apr 4, 2022 - Great Resignation Continues
- New COVID-19 cases caused by the Omicron variant fell as quickly as they rose, giving many employers hope that more of their white-collar workers return to the office. However, the return to offices has been slow. During the first week of December 2021, about 40% of workers had returned to offices in the ten cities monitored by security firm Kastle Systems. By March 23, 2022, the percentage of workers in the office was still stuck at 40%. Hybrid working models are expected to be the new norm, with long-lasting impacts on office occupancy. “It’s hard to imagine, when you look at office workers who can do their jobs remotely, that those numbers are going to get above 60% to 65% nationwide,” said Brian Kropp, chief of human-resources research for advisory and research firm Gartner.
- As of March 18, 2022, job postings on Indeed were 58.8% higher than they were on February 1, 2020 – Indeed’s pre-pandemic baseline. Many sectors are experiencing a major boom in job postings, including software development (+129.3%), human resources (+129%), production & manufacturing (+108%), and logistics support (+99%). Sectors performing close to the average for all US postings included childcare (+66.9%), cleaning and sanitation (+66.4%), pharmacy (+63.7%), and arts & entertainment (+63.9%). Sectors that showed weaker than average growth included food preparation & service (+40.9%), retail (+33%), hospitality & tourism (+25.3%), and beauty & wellness (+2.3%).
- The US economy added 431,000 jobs in March 2022, according to the Bureau of Labor Statistics (BLS), and the unemployment declined to 3.6% compared to February. March’s gains were slightly less than economists expected but still robust, considering inflation and concerns of a recession were on the rise. Economists surveyed by Dow Jones had expected March to bring 490,000 jobs. March job growth was led by the professional and business services sector (+102,000), retail (49,000), and manufacturing (38,000). Other sectors showing strong growth included social assistance (+25,000), construction (+19,000), and financial activities (+16,000).
- US average shift work volume fell 0.6% in March compared to the prior month, according to data compiled by HR solutions firm UKG. While overall shiftwork in March was down slightly, activity surged strongly in the second half of the month, boosting optimism for a robust uptick in shift work in April. By March 2022, more than 98% of pre-pandemic shiftwork had returned. All major sectors tracked by UKG saw shift work declines in March, led by sector & nonprofit, which dropped by 3%. Other drops in shift work included retail, hospitality, & foodservice (-0.9%), services & distribution (-0.4%), manufacturing (-0.3%), healthcare (-0.1%). The UKG Workforce Recovery Scale, which compares shift activity to pre-pandemic levels, fell to 100.9 in March compared to 103.6 in February. UKG noted several durable shiftwork trends as the country adapts to the “next normal,” including stronger shift work growth for large firms than for small ones, men have returned in larger numbers than women, and job openings far outnumber applicants.
- Glassdoor developed a dedicated COVID-19 job search hub and a hiring surge explorer, so job seekers can filter and see industries and cities where hiring is strong. Job seekers can also filter listings for work-at-home jobs. Working from home was born out of necessity for many companies at the onset of the pandemic. As some types of jobs become less tethered to physical workplaces, employment services may have to adapt to locating the best candidates regardless of where they live. According to a recent survey by management consulting firm Advanced Workplace Associates, only 3% of white-collar workers want to return to offices five days per week. More than 85% say they want to work from home at least two days per week.
- On a seasonally adjusted basis, about 4.4 million workers quit their jobs in February 2022, according to the US Bureau of Labor Statistics. In 2021, more than 47 million people voluntarily left their jobs in what is being termed “The Great Resignation.” February’s quit figures marked the eighth consecutive month when job openings outnumbered the number of unemployed persons. Employment services insiders suggest workers are quitting to look for better-paying positions or ones with better benefits. Some economists say the labor shortage is due to a combination of factors, including older workers opting for early retirement at the onset of the pandemic, high household savings rates, reduced immigration during the pandemic, and worker demands for more flexible working conditions. As of February 2022, there were 0.6 unemployed persons for every US job opening. In April 2020, there were five unemployed persons for every job opening.
- US hiring activity grew slightly in the fourth quarter, according to the latest quarterly Business Conditions Survey conducted by the National Association for Business Economics (NABE) and released in January. The survey showed that 32% of NABE member respondents said employment at their firms increased in Q4, up from 30% who reported employment growth in Q3. The percentage of respondents who expect their companies to increase hiring over the next three months rose to 50% in Q4 compared to 30% who expected an uptick in hiring in Q3. While the intent to hire is up, firms are still reporting significant labor shortages. Nearly 25% of those surveyed said they were experiencing shortages of unskilled labor; 57% of firms report skilled labor shortages.
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