Office Administrative 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 33,000 office administrative services companies provide a wide range of services that support the internal operation of a workplace. Firms reduce administrative burdens by providing contract talent resources and tools that enable clients to better control personnel costs by using services as needed. Service categories include bookkeeping and compilation, accounting, payroll, tax preparation, billing and record keeping, document processing and editing, copying and reproduction, strategic management consulting and implementation, information technology and network management, project management, human resources, and bundled services.
Labor-Intensive
The office administrative services industry is highly dependent on skilled workers, including accountants, bookkeepers, and experienced payroll professionals.
Increased M&A Activity in Business Process Outsourcing
US businesses are increasingly outsourcing front- and back-office functions to reduce overhead costs, generating business process outsourcing (BPO) growth that has produced strong valuations and a rise in mergers and acquisitions.
Industry size & Structure
The average office administrative services provider operates out of a single location, employs about 19 workers, and generates about $2-3 million annually.
- The office administrative services industry consists of about 33,000 firms that employ over 630,000 workers and generate about $80 billion annually.
- The industry is fragmented with the top 50 companies accounting for about 10% of industry revenue.
- Firms that generate less than $1 million annually account for over 50% of companies and 9% of industry revenue. Firms that generate $5 million or more annually account for 8% of companies and almost 65% of industry revenue.
- Large firms, such as ADP and Robert Half, may have international operations.
Industry Forecast
Office Administrative Services Industry Growth
Recent Developments
Jan 3, 2025 - CPA Leaders Warming Up to Generative AI
- More CPA decision makers are considering the use of generative artificial intelligence (Gen AI) tools, according to the fourth-quarter AICPA & CIMA Economic Outlook Survey. In Q4 2024, 56% of CPA leaders surveyed said they have considered the use of Gen AI tools compared to 38% who were considering it in Q4 2023. Between Q4 2023 and Q4 2024, the share of CPA decision makers who said their organizations have begun to experiment with Gen AI tools for business purposes rose from 23% to 30%. The share of CPA decision makers whose firms have implemented Gen AI tools for one or more business functions increased from 4% in Q4 2023 to 6% in Q4 2024.
- In December, the IRS announced several upgrades to the agency’s online offerings for tax professional accounts, according to the Journal of Accountancy. Tax pros can now view individual and business taxpayer payments and set up and revise payment plans on behalf of individual taxpayer clients. The enhancements also include a virtual assistant to aid tax professionals in resolving tax issues with the option to escalate to live chat for collection-related issues. Tax professionals now have the ability to use a checking or savings account to make up to five same-day payments on behalf of eligible clients.
- As hiring has slowed, more white-collar workers want to change jobs, according to The Wall Street Journal. A November Gallup survey of 20,000 workers showed that more than half said they were watching out for or were actively seeking a new job, marking the highest level of white-collar job seeking since 2015. However, unlike the so-called Great Resignation of 2021 and 2022, when millions found new jobs with better pay, hiring and wage growth have slowed. According to Gallup, workers are increasingly dissatisfied amid smaller raises, fewer opportunities for advancement, added responsibilities, and increased office attendance requirements. While job dissatisfaction seems to have risen, fewer workers are quitting. In September 2024, about three million people quit their jobs, compared to about 2.5 million who did so the same month a year earlier.
- While most employers are implementing return-to-office requirements, they realize the need to balance in-office work with the value that employees place on working from home, according to a recent survey by advisory firm WTW. About 61% of US companies surveyed said they had implemented a formal policy requiring employees to be in the office for a minimum number of days per week. The most cited reasons for in-office requirements included better engagement within teams (84% of respondents), reinforcing corporate culture (71%), and increasing productivity through better collaboration (64%). However, firms recognize that many workers value remote work. When asked about the leading benefit of remote work, 84% of those surveyed said attracting and retaining talent for roles that would go unfilled without remote work options, 78% said better work-life balance improved engagement, and 76% said remote work improved retention.
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