New York, NY (PRWEB) January 28, 2014
The Employment and Recruiting Agencies industry provides clients with a variety of services, including permanent placement, temporary staffing and human resources functions. Since the recession, revenue has fallen across most services, with the exception of outplacement services that help laid off employees find new work. Industry clients have brought recruitment functions in-house to reduce the cost of hiring new employees, limiting demand for industry services. In periods of high unemployment, there is a major disconnect between the high supply of qualified workers seeking employment and the businesses that limit hiring during tough economic times. This has been the fundamental challenge for the industry over the five years to 2014. However, due to gradually improving economic conditions, demand for labor among all economic sectors is slowly improving.
While improvement in the labor market is expected to cause industry revenue to increase in 2014, high unemployment slowed growth at the start of the five years to 2014. The industry did not experience overall revenue growth until 2010, when revenue increased by a negligible amount. According to Industry Analyst Nick Petrillo, “although the overall economic outlook is slowly improving, many businesses remain wary of seeking full-time employees.” Reluctance toward outsourcing employee recruitment has caused employment and recruiting agencies to see only modest growth. In the five years to 2014, IBISWorld estimates that revenue will grow at an annualized rate. This growth rate, however, was buoyed by a spike in industry revenue in 2011, a year in which the industry benefited from 2010's uncharacteristically high levels of corporate profit growth and the first decline in the unemployment rate since the recession began.
The Employment and Recruiting Agencies industry is highly fragmented, with a large number of small enterprises. In 2014, IBISWorld estimates that the top four players (including Adecco SA, ManpowerGroup Inc. and Monster Worldwide Inc.) will control less than 10.0% of the industry's revenue, indicating low industry concentration. The drop in demand for industry services during the recession caused agencies to use competitive-pricing tactics to gain new clients and retain existing ones. Falling profit margins slowed industry growth and larger players have begun acquiring smaller companies. In the five years to 2014, IBISWorld estimates that the number of industry establishments grew at an annualized rate. Moreover, “as the unemployment rate continues to decline, IBISWorld forecasts that revenue will increase at an annualized rate over the five years to 2019,” says Petrillo.
For more information, visit IBISWorld’s Employment & Recruiting Agencies industry in the US industry report page.
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IBISWorld industry Report Key Topics
The Employment & Recruiting Agencies comprises of establishments engaged in listing employment vacancies, referring job applicants to potential employers and assisting companies with employee recruitment and placement. 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
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.