Improving business sentiment and a recovering unemployment rate will drive demand
Los Angeles, CA (PRWEB) April 19, 2013
The Office Staffing and Temp Agencies industry is a leading indicator of domestic economic conditions in that temporary employment generally declines before any economic slump is recognized. The recession negatively affected temp agencies: While the number of available workers rose alongside growing unemployment, demand for temp workers declined in line with faltering corporate profit, causing industry revenue to fall. Luckily for industry operators, the labor market has slowly improved, with revenue rising each year since 2010, says IBISWorld industry analyst Kevin Culbert. Nevertheless, revenue is expected to decrease at an annualized rate of 0.1% to $95.8 billion in the five years to 2013 due to declines during the recession. Poor operating conditions reduced profitability and forced some players to leave the industry in 2008 and 2009. However, a slow rebound has caused the number of enterprises to remain relatively flat in the five years to 2013, increasing an average of just 0.9% annually to 13,219 companies.
Temp workers are technically employed by the agency, not the company to which they are assigned to work, so declining demand for temp workers causes industry employment to fall. In 2008 and 2009, industry employment fell 10.0% and 11.2%, respectively. Nevertheless, more people are joining the temporary workforce because of family or lifestyle choices. Temp agencies supply workers across many industry sectors and occupations. Administrative and industrial workers are typically of highest demand among temp agencies' clients; however, there has been increasing demand for temp workers to fill professional and business services positions, continues Culbert. The Office Staffing and Temp Agencies industry is highly fragmented, with a low level of concentration. There is a large array of small, medium and large employer companies in this industry. In spite of some recent consolidation, concentration is expected to remain low over the next five years. This industry has few barriers to entry, so establishment and enterprise growth is expected as the industry returns to higher levels of profitability.
Factors affecting the wider economy, including business sentiment and unemployment, drive the industry. Moreover, the industry's performance improves rapidly at the first signs of any economic upswing. Although the labor market continues to waver, improving demand for temporary workers has given industry players hope for the next five years. Consequently, revenue is expected to increase 2.2% in 2013. As the economy continues to move toward recovery in the coming years, rising corporate profit will allow companies to allocate more money to labor. For more information, visit IBISWorld’s Office Staffing and Temp Agencies in the US industry report page.
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IBISWorld industry Report Key Topics
Office staffing and temp agencies supply businesses with workers for limited periods of time to supplement existing staff. Although temp workers remain employees of the temp agency, temp agencies do not provide direct supervision of their employees at clients’ work sites.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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