Revenue will improve as unemployment eases up and businesses look to hire again.
Los Angeles, CA (PRWEB) September 12, 2013
The Employment and Recruiting Agencies industry provides clients with a variety of services, including permanent placement, temporary staffing and outsourced human resources functions. Since the recession, revenue has fallen across most services, with the exception of outplacement, which helps laid off employees find new work. Furthermore, according to IBISWorld Industry Analyst Andrew Krabeepetcharat, “many clients have brought recruitment functions in-house to reduce costs, limiting demand due to the abundance of skilled workers looking for a job.” In times of low unemployment, finding qualified candidates can be difficult because most workers are already employed. Conversely, in the current economy, qualified workers are readily available and most businesses can find employees without an employment agency's help.
While improvement in the labor market is expected to cause industry revenue to increase 2.6% in 2013, inflexibly high unemployment slowed growth during the majority of the five years to 2013. In 2009, revenue declined 21.0%, and in light of an uncertain economy, many businesses have delayed hiring decisions throughout the period. This resulted in fewer placements, causing agencies to perform poorly. In the five years to 2013, IBISWorld estimates that revenue will fall at an annualized rate of 1.5% to $16.0 billion.
As a result of the drop in demand for industry services, agencies began using competitive-pricing tactics to gain new clients and retain existing ones. Nevertheless, as a result of low demand, some players left the industry during the period, and larger players have taken the opportunity to acquire smaller firms. In the five years to 2013, IBISWorld estimates that the number of firms operating in this industry will grow at an annualized rate of 1.5% to 74,846 companies. Despite the industry's struggles during the past five years, however, “its performance is expected to improve as the unemployment rate continues to decline,” says Krabeepetcharat.
The Employment and Recruiting Agencies industry is highly fragmented, with a large number of small enterprises. Small operators tend to focus on a particular geographic region or a particular industry within that region, while medium-size firms generally cover a larger region, such as a major city or state, or a niche industry market on a national basis. The largest firms operate on a national and international scale; however, only revenue generated domestically contributes to industry market share. While there are no major players in this industry, some notable companies include Adecco SA, Manpower Inc. and Monster Inc.
For more information, visit IBISWorld’s Employment & Recruiting Agencies in the US industry report page.
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IBISWorld industry Report Key Topics
Employment and recruiting agencies list employment vacancies in addition to referring and placing applicants for employment. People referred or placed are not employees of the employment agencies.
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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