Staffing Services Industry Overview

Excerpt from Staffing Services Report

Companies in this industry act as intermediaries providing temporary, permanent and contract employees to clients based on employers' needs. Major companies include ADP TotalSource, Insperity, Kelly Services, and Manpower (all based in the US), along with Adecco (headquartered in Switzerland) and Randstad (the Netherlands).

Competitive Landscape

Job growth drives demand for the personnel staffing industry. The profitability of individual companies depends on good marketing and availability of qualified employees. Large companies enjoy economies of scale in marketing and back-office operations. Small companies can compete successfully by specializing in an industry or a job function. The industry is fragmented: the 50 largest companies generate about 40 percent of industry revenue.

Products, Operations & Technology

The industry is divided into three major segments: temporary help services (about 50 percent of industry revenue), professional employer organizations (about 45 percent), and placement agencies (about 5 percent). Temporary help services provide workers for customers for limited periods, often to substitute for absent permanent workers or to help during periods of peak demand. These workers, who are employees of the temporary help agency, will generally fill clerical, technical, or industrial positions. Professional employer organizations (PEOs), sometimes known as employee leasing agencies, contract to provide workers to customers for specific functions, often related to human resource management. In many cases, a customers' employees are hired by a PEO and then leased back to the customer. Placement agencies, sometimes referred to as executive recruiters or headhunters, find workers to fill permanent positions at customer companies. These agencies may specialize in placing senior managers, midlevel managers, technical workers, or clerical and other support workers.