Demand for temporary employees will decline as the unemployment rate falls
Los Angeles, CA (PRWEB) November 12, 2013
Temporary warehouse staffing services have a buyer power score of 4.1 out of 5. Following the recession, buyers primarily had high negotiation power because of future production uncertainty; therefore, they were less likely to hire new employees. The uncertainty initially was due to reduced manufacturing levels as a result of lower consumer spending. In effect, staffing agencies had to make their prices more competitive with alternative options to attract buyers. According to IBISWorld procurement analyst Aileen Weiss, “Even as industrial production and corporate profit increased, many businesses were hesitant to make the long-term investment of hiring permanent employees”. Therefore, temporary employees were preferred, and average prices for services slowly rose, but still remained low in the three years to 2013.
Another factor that contributed to the temporary warehouse staff market's high negotiation power was the national unemployment level's drop to a three-year low in 2013. Thus, a greater supply of temporary employees has allowed agencies to be more selective about choosing candidates, which provides the buyer with higher-quality workers. In the three years to 2016, as confidence in the economy is restored, businesses will change their hiring process to incorporate both temporary and permanent employees. “Some will elect to bring their hiring in-house and others will select alternative employment options”, adds Weiss. As such, temporary employment agencies will face less demand for services, forcing them to lower their prices.
On a regional level, negotiation power varies by the staffing agency's size. If a buyer has multiple operating locations, a larger agency with several branches may offer the buyer just one favorable price for all locations. However, using many small agencies may be harder to secure lower prices for each location. Overall, buyers should select an agency that will provide them with various employment options and that will conduct in-house and human resources services to keep up with changing employment trends. While the buyer already has high negotiating power due to the competitive nature and excess of employment services, long-term contracts with exit clauses will be most beneficial as employment needs change. The four largest players in the market are Adecco, Manpower, Allegis Group Services, and Kelly Services.
For more information, visit IBISWorld’s Temporary Warehouse Staff procurement research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of temporary warehouse staff. Temporary warehouse staffing firms provide warehouse workers to buyers that require the moving, shipping and inventory of products. Suppliers generally provide warehouse workers on a temporary basis for specific jobs, and the individual workers provided are employees of the employment placement agency. Temporary warehouse staffing includes the following positions: assembler, forklift operator, freight handler, inventory work, janitorial worker, machine operator, packager, and shipping-receiving clerk. The report excludes the placement and staffing of permanent employees and contract workers.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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