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
Oct 3, 2024 - A Third of Workers Expect AI-Related Job Displacements
- In a recent poll by Flexjobs, 34% of workers said they thought artificial intelligence (AI) would lead to job displacement over the next five years. Nearly half (49%) of respondents said they do not use AI, and 21% said they use AI for work-related and professional purposes. Almost 20% (19%) of those surveyed said they rely on AI to support their job searches, including writing cover letters and résumés. About a quarter of Millennials (24%) said they use AI for professional or personal purposes, followed by Gen X (21%) and baby boomers (16%). About 9% of those surveyed said they expect AI to make their current job obsolete within the next five years.
- In September, Amazon’s CEO announced that starting January 2, 2025, the company’s corporate staff would have to return to the office full time, according to The Wall Street Journal. Since the end of the pandemic, hybrid work models have persisted, often due to management concerns that top performers might leave if they were required to spend more time in the office. However, as the labor market has tightened, the balance of power has shifted to favor employers, and some are eager to use their upper hand to require five days of in-office work. However, over the last year, the number of companies requiring five days in the office has fallen by 15%, according to Flex Index, which tracks the work policies of about 6,300 firms. A recent survey of CEOs by KMPG showed that 80% expect corporate employees to return to the office five days per week within three years.
- Wage reductions that swept through the white-collar workforce in 2023 are taking hold in several blue-collar sectors, according to The Wall Street Journal. During the pandemic, when employers were starving for workers, recruits were lured by generous pay. However, the power dynamic has shifted as the labor market has softened, and many employers are offering lower wages. Among 20,000 different job titles listed on ZipRecruiter, so far in 2024, average posted pay has dropped in retail, agriculture, manufacturing, food, and transportation and warehousing. Some of the biggest declines in advertised pay offerings were in retail (down nearly 60%), agriculture (-24.5%), and manufacturing (-17.3%). Some white-collar positions are also seeing new-hire wages drop. Wages for new hires in finance have fallen 9.2% in the past year, professional services wages are off 2.4%, and insurance pay has declined 1.6%, according to payroll and benefits software firm Gusto.
- The technicians who oversee data centers are in high demand amid the rapid growth of cloud storage and generative AI, according to The Wall Street Journal. Experienced data center technicians can command six-figure salaries, and entry-level positions are available for applicants with just a high-school diploma. The job requires a unique mix of mechanical ability and an understanding of technology, including programming. Typical tasks include repairing and maintaining servers and heating and cooling systems. Data technician pay has increased by 43% in the last three years, according to training and certification firm CompTIA. Job postings for data center technicians have increased by 18% since 2020, while overall tech job postings have fallen by half.
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