Employment Services Industry

Significant Points

Nature of the Industry[About this section] [To Top]

Goods and services. The employment services industry provides a variety of human resources services to businesses. These services include providing temporary workers to other businesses, helping employers locate suitable employees, and providing human resources services to clients.

Industry organization. The employment services industry has four distinct segments. Employment placement agencies list employment vacancies and place permanent employees. Temporary help services, also referred to as temporary staffing agencies, provide employees, on a contract basis and for a limited time, to clients in need of workers to supplement their labor force. Executive search services, often referred to as headhunters, provide search, recruitment, and placement services for clients with specific executive and senior management needs. Professional employer organizations are engaged in providing human resources and human resources management services to staff client businesses. They also may share responsibility as a co-employer of workers to provide a cost-effective approach to the management and administration of the human resources functions of their clients.

The typical employment placement agency has a relatively small permanent staff, usually fewer than 10 workers, who interview jobseekers and try to match their qualifications and skills to those being sought by employers for specific job openings.

In contrast to the smaller employment placement agencies, temporary help agencies typically employ many more workers. Temporary help services firms provide temporary employees to other businesses to support or supplement their workforce in special situations, such as employee absences, temporary skill shortages, and varying seasonal workloads. Temporary workers are employed and paid by the temporary help services firm but are contracted out to a client for either a prearranged fee or an agreed hourly wage. Some companies choose to use temporary workers full time on an ongoing basis, rather than employ permanent staff, who typically would receive greater salaries and benefits. As a result, the overwhelming majority of workers in the temporary help services segment of the employment services industry are temporary workers; relatively few are permanent staff.

Executive search consulting firms work to locate the best candidates for top-level management and executive positions. Clients hire executive recruiters to save time and preserve confidentiality. Executive search firms keep a large database of executives' resumes and search this database to identify and assess candidates who are likely to complement a client's corporate culture and strategic plan. Information on these candidates is then submitted to the client for their selection. Executive search consulting firms conduct prescreening interviews as well as reference and background checks. Some executive search consulting firms specialize in recruiting for a particular industry or geographic area; other firms conduct general searches.

Professional employer organizations specialize in performing a wide range of human resource and personnel management duties for their clients, including payroll processing, accounting, benefits administration, recruiting, and labor relations. Employee leasing establishments are a type of professional employer organization that typically specialize in acquiring and leasing back some or all of the employees of their clients; they serve as the employer of the leased employees for the purpose of administrating payroll, benefits, and related functions.

Working Conditions[About this section] [To Top]

Hours. The average annual work week in the employment services industry was about 33.6 hours in 2008, which was comparable to the average for workers across all industries. Most full-time temporary workers put in 35 to 40 hours a week, although some work longer hours. Permanent employees in employment agencies usually work a standard 40-hour week, unless seasonal fluctuations require more or fewer hours.

Workers employed as permanent staff of employment agencies, temporary help services firms, or professional employer organizations usually work in offices and may meet numerous people daily. The temporary employees that are contracted out to clients typically work in a variety of environments and often do not stay in any one place long enough to settle into a personal workspace or establish close relationships with coworkers. Most assignments are of short duration because temporary workers may be called to replace a worker who is ill or on vacation or to help with a short-term surge of work. However, assignments of several weeks or longer occasionally may be offered. On each assignment, temporary employees may work for a new supervisor.

Work environment. Employment as a temporary worker is attractive to some. The opportunity to earn income while enjoying flexible schedules and an ability to take extended leaves of absence is well-suited to students, persons juggling job and family responsibilities, those exploring various careers, and those seeking permanent positions in a chosen career. Firms try to accommodate workers' preferences for particular days or hours of work and for frequency or duration of assignments. Temporary work assignments provide an opportunity to experience a variety of work settings and employers, to sharpen skills through practice, and to learn new skills. Nevertheless, many workers in temporary assignments would prefer the stability and greater benefits associated with full-time work.

Because temporary and leased workers are used by a variety of different businesses, the work environments can vary greatly, depending on the type of work done. For example, temporary or leased clerical workers typically work in offices and production workers typically work in manufacturing plants. Permanent employees who are responsible for the day-to-day activities of firms within the industry tend to work in offices.

The annual injury and illness rate for the employment services industry as a whole was lower than the rate for the entire private sector. Temporary workers in industrial occupations often perform work that is more strenuous and potentially more dangerous, and may have a higher rate of injury and illness.

Employment[To Top]

The employment services industry provided 3.1 million wage and salary jobs in 2008. About 45,200 of the 78,000 establishments in the industry were temporary help services firms which employed 74% of industry workers.

Employment in the employment services industry is distributed throughout the United States. Workers are somewhat younger than those in other industries—41 percent of employment services workers are under 35, compared with 35 percent of all workers, reflecting the large number of clerical and other entry-level positions in the industry that require little formal education.

Occupations in the Industry[To Top]

The employment services industry encompasses many occupations, from office and administrative support occupations to professional and production occupations (table 1). In general, occupations in the industry include the permanent staff of employment services firms, and the variety of occupations supplied through the temporary help services segment of the industry and the professional employer organizations.

Management, business, financial, and sales occupations. The staff of employment service agencies is responsible for the daily operation of the firm. Many of these workers are in management, business, financial, and sales occupations, which together account for about 9 percent of jobs in this industry. Managers ensure that the agency is run effectively, and they often conduct interviews of potential clients and jobseekers. Employment, recruitment, and placement specialists recruit and evaluate applicants and attempt to match them with client firms. Sales workers actively pursue new client firms and recruit qualified workers. Because of fierce competition among agencies, marketing and sales work can be quite stressful at times.

Office and administrative support occupations. About 25 percent of workers in this industry are in office and administrative support jobs. These positions may be either temporary or permanent. Experience in office and administrative support occupations usually is preferred for these jobs, although some persons take special training to learn skills such as bookkeeping. Receptionists greet visitors, field telephone calls, and perform assorted office functions. Secretaries perform a range of tasks, such as typing, producing reports, and answering the telephone, depending on the type of firm in which they work. Customer service representatives provide information in response to inquiries about products or services and handle and resolve complaints from customers. General office clerks file documents, type reports, and enter computer data. File clerks classify and store office information and records. Data entry keyers enter information into a computer data base. Word processors and typists enter and format drafts of documents using computers. Bookkeeping clerks compute, classify, and record transaction data for financial records and reports.

Production, transportation, and material moving occupations. Production occupations and transportation and material moving occupations together account for 39 percent of employment in the employment services industry. Few of these jobs require education beyond high school, although related work experience is an asset in many of them. Others require significant experience and on-the-job training. Highly skilled assemblers and fabricators may assemble and connect parts of electronic devices; other less skilled workers perform simpler, more repetitive tasks on production lines. Laborers and freight, stock, and material movers transport goods to and from storage areas in either factories, warehouses, or other businesses. Hand packers and packagers wrap, package, inspect, and label materials manually, often keeping records of what has been packed and shipped.

Professional and related occupations. A growing number of temporary workers are specialized professional and related workers, who account for 11 percent of employment in the employment services industry. Professional and related occupations include a variety of specialists and practitioners, some of whom require many years of postsecondary education to qualify for their positions. For example, engineers require at least a bachelor's degree. Other professionals requiring some postsecondary education include registered nurses, who administer medication, tend to patients, and advise patients and family members about procedures and proper care. They usually work in hospitals, but they may be assigned to private duty in patients' homes. Licensed practical nurses provide basic bedside care to patients. Computer programmers write, test, and maintain computer software, the programs that computers follow to perform functions. Although computer programmers are not required to have postsecondary education, formal training is an asset.

Service occupations. Service workers employed on a temporary basis also include a number of healthcare support occupations. Home health aides usually work in the home of an elderly or ill patient, allowing the patient to stay at home instead of being institutionalized. Becoming a home health aide generally does not require education beyond high school. Nursing aides and orderlies also seldom need education beyond high school, but employers do prefer previous experience. These workers assist nurses with patient care in hospitals and nursing homes.

The employment services industry also employs workers in such fields as farming, fishing, and forestry, as well as installation, maintenance, and repair.

Table 1. Employment of wage and salary workers in employment services by occupation, 2008 and projected change, 2008-2018. (Employment in thousands)
Occupation Employment, 2008 Percent Change,
2008-18
Number Percent
All Occupations 3,144.4 100.0 19.1
Management, business, and financial occupations 197.8 6.3 27.8
Professional and related occupations 355.8 11.3 23.2
  Registered nurses 84.9 2.7 23.6
  Health technologists and technicians 54.1 1.7 24.2
Service occupations 275.1 8.8 23.0
  Nursing aides, orderlies, and attendants 41.4 1.3 23.6
  Food preparation and serving related occupations 68.7 2.2 22.5
Office and administrative support occupations 778.3 24.8 13.2
  Bookkeeping, accounting, and auditing clerks 36.4 1.2 23.6
  Customer service representatives 95.1 3.0 35.9
  Receptionists and information clerks 48.6 1.5 9.5
  Secretaries and administrative assistants 121.8 3.9 9.4
  Data entry keyers 45.9 1.5 -4.2
Construction and extraction occupations 172.1 5.5 28.6
Production occupations 603.4 19.2 22.4
  Assemblers and fabricators 227.0 7.2 22.4
  Metal workers and plastic workers 82.8 2.6 19.0
Transportation and material moving occupations 609.4 19.4 13.2
NOTE: Columns may not add to totals due to omission of occupations with small employment.

Training and Advancement[About this section] [To Top]

The employment services industry offers opportunities in many occupations for workers with a variety of skill levels and experience. The majority of temporary jobs still require only graduation from high school or the equivalent, while some permanent jobs, such as those in management, may require a bachelor's or higher degree. In general, the training requirements of temporary workers mirror those for permanent employees in the economy as a whole. As the industry expands to include various professional and managerial occupations, a growing number of jobs will require a bachelor's or advanced degree.

Some temporary help services firms offer skills training to newly hired employees to make them more marketable. This training often is provided free to the temporary worker and is an economical way to acquire training in important skills such as word processing. Agency training policies vary, so persons considering temporary work should ask firms what training they offer and at what cost.

Advancement as a temporary employee usually takes the form of pay increases or greater choice of jobs. More often, temporary workers transfer to full-time jobs with other employers. Turnover among temporary workers within temporary help services firms usually is very high; many accept offers to work full time for clients for whom they worked as temporary workers. Some experienced temporary workers may be offered permanent jobs with help firms, such as training others for temporary jobs.

Staff of employment placement agencies and permanent staff of temporary help services firms typically are made up of employment interviewers, administrative support workers, and managers. The qualifications required of employment interviewers depend partly on the occupations that the employment placement agency or temporary help services firm specializes in placing. For example, agencies that place professionals, such as accountants or nurses, usually employ interviewers with college degrees in similar fields. Agencies specializing in placing administrative support workers, such as secretaries or data entry keyers, are more likely to hire interviewers with less education, but who have experience in those occupations. Staffs of professional employer organizations include professionals in human resources management, payroll, risk management, legal services, financial management, employment compliance, and administration.

Although administrative support occupations, such as receptionists, usually do not require formal education beyond high school, related work experience may be needed. Sometimes, staff experienced in administrative support occupations advance to employment interviewer positions. Most managers have college degrees; an undergraduate degree in personnel management or a related field is the best preparation for these jobs. Employment, recruitment, and placement specialists often advance to managerial positions, but seldom without a bachelor's degree.

Outlook[About this section] [To Top]

Wage and salary employment in the employment services industry is expected to increase at a relatively fast pace over the next decade. Opportunities should be plentiful because of significant turnover in this industry.

Employment change. Wage and salary employment in the employment services industry is expected to grow 19 percent over the 2008 to 2018 projection period, compared to the 11 percent growth projected for all industries combined. The industry is expected to gain about 599,700 new jobs over the period.

Temporary help agencies, the largest sector within employment services, should continue to generate many new jobs. This growth will be spurred by businesses in need of workers to manage seasonal and other temporary increases in their workloads, demand for specialized workers, and those businesses seeking to expand without incurring the additional costs associated with permanent employees.

Employment in professional employer organizations is expected to grow in response to demands by businesses for changes in human resources management. The increasing complexity of employee-related laws and regulations and a desire to control costs, reduce risks, and provide more integrated services will spur more businesses to contract with professional employer organizations to handle their personnel management, health benefits, workers' compensation claims, payroll, tax compliance, and unemployment insurance claims. Businesses are expected to increasingly enter into relationships with professional employer organizations and shift these responsibilities to specialists.

Employment placement agencies are expected to continue growing, as many employers increasingly prefer to have outside agencies perform the preliminary screening of candidates. However, online employment placement agencies, which constitute a growing portion of the industry, operate without employment counselors and need fewer administrative support workers. Additionally, job postings on employer Web sites, online newspaper classified ads, and job-matching Internet sites operated by educational institutions and professional associations compete with this industry, thereby limiting employment growth.

Employment in executive search consulting firms is expected to grow because companies need to find qualified workers to replace the large number of older workers expected to retire from senior management positions in the future. Executive search consulting firms provide these companies with a way to identify and assess job candidates for these key positions.

Job prospects. Increasing demand among employers for flexible work arrangements and schedules, coupled with significant turnover in these positions, should create plentiful job opportunities for persons who seek jobs as temporary or contract workers through 2018. In particular, suppliers of medical personnel to hospitals and other medical facilities should continue to perform well, as demand for temporary healthcare staffing grows to meet the needs of aging baby boomers and to supplement demand for more healthcare services throughout the country. Also, businesses are expected to continue to seek new ways to make their staffing patterns more responsive to changes in demand. As a result, firms increasingly may hire temporary employees with specialized skills to reduce costs and to provide the necessary knowledge or experience in certain types of work.

Most new jobs will arise in the largest occupational groups in this industry—office and administrative support, production, and transportation and material moving occupations. However, the continuing trend toward specialization also will spur growth among professional workers, including engineers and healthcare practitioners such as registered nurses. Managers also will see an increase in new jobs, as government increasingly contracts out management functions. In addition, growth of temporary help firms and professional employer organizations—which provide human resource management, risk management, accounting, and information technology services—will provide more opportunities for professional workers within those fields. Marketing and sales representative jobs in temporary staffing firms also are expected to increase, as is the competition among these firms for the most qualified workers and the best clients.

Earnings [About this section] [More salary/earnings info] [To Top]

Industry earnings. In 2008, earnings among nonsupervisory workers in employment services firms were $15.00 per hour and $504 per week, lower than the $18.08 an hour and $608 a week for all private industry.

Earnings vary as widely as the range of skills and formal education among workers in employment services. As in other industries, managers and professionals earn more than clerks and laborers. Also, temporary workers usually earn less than workers employed as permanent staff, but some experienced temporary workers make as much as or more than workers in similar occupations in other industries. Wages in the largest occupations in employment services appear in table 2.

Table 2. Median hourly wages of the largest occupations in employment services, May 2008
Occupation Employment services All industries
Registered nurses $32.77 $30.03
Employment, recruitment, and placement specialists 20.52 21.86
Executive secretaries and administrative assistants 16.26 19.24
Customer service representatives 12.73 14.36
Office clerks, general 11.46 12.17
Construction laborers 10.80 13.71
Team assemblers 9.61 12.32
Helpers—production workers 9.30 10.48
Laborers and freight, stock, and material movers, hand 9.18 10.89
Packers and packagers, hand 8.62 9.16

Benefits and union membership. Most permanent workers receive basic benefits; temporary workers usually do not receive such benefits unless they work a minimum number of hours or days per week to qualify for benefit plans. Only 3 percent of workers in employment services are union members or are covered by union contracts, compared with about 14 percent of workers in all industries combined.



*Source: Bureau of Labor Statistics, U.S. Department of Labor. Used by permission.

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