Help Supply Services

SIC 7363

Companies in this industry

Industry report:

This classification includes establishments primarily engaged in supplying temporary or continuing help on a contract or fee basis. The help supplied is always on the payroll of the supplying establishments but is under the direct or general supervision of the business to which the help is furnished. Establishments providing both management and staff to operate a business are classified according to the type of activity of the business. Also excluded from this industry are establishments primarily involved in furnishing personnel to perform a range of services in support of the operation of other establishments, which are classified in SIC 8744: Facilities Support Management Services. Establishments supplying farm labor are classified in SIC 0761: Farm Labor Contractors and Crew Leaders.

Industry Snapshot

Temporary employment is viewed by many economists as a leading economic indicator because businesses can instantly correct changes in demand by stepping up or scaling back their temporary help. Typically, demand for temporary works has slowed in periods of economic recession, including the mid-1970s, the early 1980s, the early 1990s, the early 2000s, and the late 2000s. After a decade of phenomenal growth--with industry revenue tripling between 1990 and 1999 and reaching an all-time high in 2000--growth in the help supply industry slowed in the economic recession of the early 2000s. After rebounding in the middle of the decade, the industry declined due to the downward turn in the economy that began in 2007.

Annual revenue of temporary help services was $63.3 billion in 2004, a 12.5 percent increase $56.3 billion in 2003 and almost equal to the $63.6 billion record previously set in 2000. After a record-setting daily temporary employment of 2.54 million in 2000, jobs were reduced 14 percent, or 360,000, to 2.18 million in 2001, the lowest since 1996. The decline continued with daily average temporary employment numbers falling to 2.06 million in 2002 before rising slightly to 2.16 million in 2003. The average jumped to 2.55 million in 2004 and reach record levels of 2.8 million in the third quarter of 2005.

In the mid-2000s, the industry was able to build revenues faster than net placement levels. Several trends contributed, including rising wages, greater numbers of higher skilled placements, and value-adding human resources services offered by staffing firms. In 2004 approximately 25 percent of all firms with over 100 employees used temporary employment services.

Staffing agencies also began making themselves more attractive, offering benefits and other perks that were not traditionally associated with temporary employment. Though the industry's core markets originally lay in clerical and light industrial personnel, sizable markets also emerged for information technology (IT) and professional temps--everything from programmers and engineers to accountants and lawyers.

The economic recession of the late 2000s hurt the staffing industry, with more than 1.4 million jobs lost in two years. According to the American Staffing Association, sales also declined, dropping more than 24 percent in fiscal 2009 alone. However, by mid-2009, staffing numbers were starting to increase again, signaling a recovery in the economy and the staffing industry. That year, revenues for the staffing industry totaled $61.4 billion, 87 percent of which came from temporary and contract staffing and the remainder from search and permanent placement services.

Leading reasons cited by companies for hiring temporary employees included unexpected increases in business, to fill a vacancy temporarily, to fill in for absent regular employees, for special projects, for seasonal needs, to screen job candidates, for assistance in peak times, to save on wage and benefit costs, and to gain special expertise.

Organization and Structure

Companies contract with staffing agencies to obtain personnel on a contingency basis. Typically the temp earns less than his or her in-house counterparts and receives benefits, if any, from the agency rather than the host employer. The company requiring temporary help usually pays anywhere from 25 percent to 50 percent of a temp worker's hourly wage to the agency to cover its fees. Although this may make temps more expensive than in-house workers on an hourly basis, in the long run companies figure they save from the flexibility and reduced administrative burdens of having a smaller in-house labor force.

As of 2010, approximately 6,000 temporary employment firms in the United States were operating about 20,000 offices. The companies managing these operations were primarily small, independent, one-office concerns, with a handful of companies operating on a national, and sometimes international, level. The relatively low investment required to establish a temporary employment business has encouraged small operators to enter the industry since its inception and accounted for the large representation of such companies.

Geographically, temporary staffing agencies are fairly evenly distributed throughout the United States. They tend to be located near their customers, and thus agencies are clustered in large metropolitan areas with strong white-collar employment bases.

Background and Development

The need for temporary or emergency employment presumably has existed ever since industry and commerce in the United States reached substantial proportions; employees have always fallen ill, businesses have always experienced surges of growth and spasms of decline, and a certain percentage of the national labor pool has always been idle. On a theoretical level, therefore, the maturity of the U.S. economy should have induced the emergence of a class of workers willing to satisfy the sometimes fleeting employment needs of corporate America.

The genesis of the temporary employment industry, however, lagged far behind the establishment of the national economy. Although distant progenitors of the industry began emerging as early as 1910, the basic, modern structure of the industry as it exists today did not develop until after World War II. Undoubtedly, businesses and industries had relied on temporary help in some form much before this time, but the industry, as a definable and organized entity, did not appear until the immediate post-war years when two temporary employment companies integral to the industry's organization and growth, Kelly Girl Service and Manpower, Inc., first formed.

Once a need for temporary employees had been identified by these two early entrants in the industry, other similar business were formed in rapid succession. Entry into the industry required little capital investment, with costs incurred from recruiting, advertising, and rent standing as the only significant financial exigencies for the would-be owner of a temporary employment agency. Consequently, with virtually no initial need for fixed investment, and the latent demand for the type of service provided, a majority of the companies that would lead the industry for the next 20 years--Olsten based in New York, Employers Overload in Minneapolis, and Western Girl in San Francisco, in addition to Manpower and Kelly Girl--were already established by the early 1950s.

As the number of industry participants proliferated during the early 1950s, by infiltrating new, untapped markets, the range of services offered by the industry also broadened. Initially, temporary employment agencies provided employees to perform primarily office and clerical duties, the one notable exception being Manpower's industrial niche, but other companies began operating in the early 1950s that focused on providing technical workers, such as engineers, designers, and draftsmen, on a temporary basis. This trend prompted the creation of a new breed of temporary employees that would prove to be a highly lucrative component of the industry. Moreover, some temporary help companies added sales divisions during the decade to perform marketing and promotional assignments, further widening the scope of the industry's services.

The industry received its greatest surge of growth, however, from geographical expansion, as companies already established in the industry extended their reach across the country. Manpower, for example, had opened 21 company-owned branch offices in 13 cities by 1954, six years after it first opened its doors. That same year, Manpower also began offering a franchising program, followed by Kelly Girl Services, which enabled franchise ownership under the Kelly name a year later, in 1955. Expansion was not restricted to domestic markets but stretched overseas, when Manpower opened offices in London and Paris in 1956. By the end of the decade, the temporary employment industry generated annual revenues of approximately $100 million.

For the industry, which essentially had been in existence for only 10 years, these initial developments--the broadening range of services it provided, the proliferation of new companies, and the dramatic growth of existing companies--established a firm foundation for the industry's future, validating the assumptions of the industry's founders that, indeed, American business and industry had a large appetite for temporary employment help.

As the industry headed into the late 1950s and 1960s, a period during which temporary help companies, on the whole, enjoyed phenomenal success, its clients began utilizing temporary help for different reasons. Originally, the demand for temporary personnel stemmed almost exclusively from the need to replace sick or vacationing employees, but gradually employers began using temporary employment agencies to fulfill more strategic needs. Historically, companies experiencing an upturn in business hired additional labor on a permanent basis to meet deadlines during peak periods of activity, but once business activity returned to normal levels, the added employees remained, saddling the company with excess staff. By utilizing temporary employees, however, companies could quickly hire and dismiss a portion of their staff according to the dictates of their business cycle. This payroll fluidity enabled personnel managers to incorporate temporary employees into management plans, rather than relying on them only in panic situations, which underscored the necessity of the temporary employee in the American workplace.

In the 1960s, the temporary employment industry flourished, as the benefits accorded to companies utilizing interim help dovetailed with favorable market conditions on the whole to exponentially increase the industry's revenues. Aside from the personnel flexibility that temporary employees provided, client companies also profited from reductions in unemployment compensation costs, the creation of investment tax credits, and an increase in consumer spending. Although hiring a temporary worker generally cost more per hour than hiring a permanent employee, savings were realized by not having to pay for fringe benefits, which typically averaged 30 percent of an employee's total wage. Also, the use of temporary labor could dramatically reduce the amount of unemployment tax a particular company was forced to pay. Companies are taxed a certain percentage of their total payroll for unemployment compensation, the amount of which is determined by the layoff record of a particular company. For example, if a company hires additional staff to meet increased production demands and subsequently releases those employees, then the company's compensation percentage is increased. By using temporary employees, however, companies can still respond to various business cycles, but their unemployment compensation percentage is not affected, because temporary employees are not considered part of the regular workforce.

Benefiting from these advantages that temporary employment gave to businesses of all types, the industry's participants thrived during the 1960s. The bulk of the industry's growth, however, occurred after 1963 into the late 1960s. The industry's ascension was attributable, in part, to the diminished labor force of the nation as a whole. Unemployment dropped during the middle of the decade due to the overall health of the nation's business community and government programs specifically designed to winnow unemployment levels. Additionally, the Vietnam War began to drain an appreciable portion of the country's workforce while at the same time infusing more money into the economy. The effect of these circumstances tightened the nation's labor supply, which improved the temporary employment industry's position. Growing at a 25 to 30 percent annual rate, the industry's leading companies, those founded in the early 1950s, helped push the industry's revenues to $500 million by 1967, more than twice the amount recorded four years earlier.

By the beginning of the 1970s, however, the industry's growth had slowed. Geographic expansion had fueled, in large part, the growth of the industry, with small, independent companies sprouting up in cities bereft of temporary employment companies and the larger, national companies opening offices at a rapid rate. Concurrent with the near saturation of the sundry temporary employment markets, the nation's economy soured in late 1969, causing the temporary employment industry, for the first time, to falter. Lacking new markets to move into, companies involved in the industry were left with no way to offset the slackening demand for their services, and the industry, consequently, suffered a decline in revenues.

The damage to the industry, however, was short-lived and the effects negligible, as temporary employment companies in their recovery demonstrated a characteristic unique to the industry--as general economic conditions worsened, the temporary employment industry's position improved. When the economic downturn of 1969 and 1970 developed into a full-fledged recession in the early and mid-1970s, businesses began to lay off workers to combat soaring inflation and depressed business activity. While personnel managers reexamined staffing needs, sometimes discharging too many workers, or discovering certain positions did not warrant full-time employment, temporary employees were often sought to fill particular employment gaps, which helped mitigate the awkward process of arriving at an efficient number of employees. Moreover, the difficult financial conditions forced individuals that voluntarily excluded themselves from the nation's workforce, housewives in particular, to seek part-time, temporary employment. Buoyed by these depressed economic conditions, temporary employment companies began to focus on broadening the range of services they provided to other industries. Because geographic expansion could no longer be relied on to stimulate sales, companies began concentrating on recruiting professional temporaries and specially trained laborers.

The result of these changes, both outside and within the industry, protected, to a large extent, temporary employment companies from the pernicious economic conditions affecting the rest of the nation. In 1974, while many industries struggled to generate profits, the approximately 2,000 companies involved in the temporary employment industry recorded more than $1 billion in revenues. However, the deleterious financial conditions did take their toll on the industry; total temporary payroll, for example, dropped 18.3 percent in 1975, but the industry demonstrated an ability to quickly recover from a downturn. The industry by this time supplied nearly 3 percent of the nation's total labor force, with Manpower alone drawing from a reservoir of 500,000 temporary workers.

Throughout the remainder of the decade, the industry's sales growth rate was somewhat less than the prolific pace enjoyed during the 1960s, but it was still an enviable 10 to 15 percent. By 1978, the industry employed roughly 2.5 million temporary employees for 500,000 customers and had annual revenues in excess of $1.5 billion. By the late 1970s, 8 of 10 American companies used temporary employees to fill an assortment of positions, including such markets as health care, corporate management, marketing, and science--although secretarial and clerical business still accounted for 70 percent of the industry's placements. The movement away from using temporary workers only in emergency situations had gained momentum since the late 1950s, accounting for 40 percent of the industry's business in the late 1970s compared to the 90 percent figure that once represented the use of temporary employees in earlier panic situations.

By the early 1980s, the temporary employment industry was the third-fastest growing industry in the country. Revenues eclipsed $5.1 billion in 1982, while more than 90 percent of American companies used temporary workers on a regular basis. Despite, or perhaps due to, this pervasive presence in the nation's business community, recessive conditions struck the industry once again in the early 1980s. However, at this time the industry was insulated by the diversity of services it offered, and temporary payroll fell by only 1 percent.

By the mid-1980s, temporary employees filled more than 700,000 jobs a week, considerably more than the 470,000 per week recorded in 1983. According to the National Association of Temporary and Staffing Services (NATSS, later renamed the American Staffing Association), the number of temporary employees on any given day in 1995 was over 2 million. Low initial investment coupled with the tremendous success the industry had enjoyed over the past 40 years continued to attract more and more competition, raising the specter of market over-capacity, but the bulk of the recent additions to the industry consisted of small, one-office operations, only serving customers in close proximity. By 1985, there were 2,300 companies engaged in the industry, operating nearly 7,500 offices, up from the 2,000 companies and 5,000 offices in existence three years earlier. Ten years later, in 1995, more than 16,000 help supply offices were operating in this industry nationwide.

Revenues mushroomed throughout the mid-1980s, nearly tripling from 1982's volume to more than $15 billion in 1987, as other industries increased their use of temporary employees with specialized skills. This trend led not only to significant increases in sales, but also widened the profit margin earned by temporary employment companies. From 1986 to 1989, the industry recorded an annual growth rate of 18 percent and stood, by the beginning of the 1990s, as an industry inseparably woven into the employment structures of an overwhelming majority of American businesses. Between 1990 and 1993, the industry experienced a 25 percent increase in growth. And, in the one-year period between 1994 and 1995, temporary help receipts rose by 12.9 percent.

According to the observations of one economist, a rise or decline of 50,000 temporary employees usually augurs a parallel shift of roughly 1 million permanent, or payroll, employees a month or two later. This portentous characteristic of the industry became apparent once again in the late 1980s and early 1990s as a global recession quaked the foundations of a majority of industries. Temporary employee placements peaked in 1988 at slightly over 1 million, remaining flat through 1989, then rebounded in 1990, becoming for client companies an effective way to combat vacillating production demands. During the ensuing months of the recession, while other industries floundered, the industry fared comparatively well. The industrial component of the industry demonstrated particularly strong growth, with daily temporary placements for manufacturing positions rising from 224,000 in early 1992 to 348,000 by the end of the year.

As temporary employment companies charted their course toward the mid-1990s, the dynamics of the industry were changing, echoing the changing relationship between employers and employees in general that was prompted by mounting global competition and the concerted push for more efficiency in the American workplace. Increased pressures on American businesses to assiduously monitor expenditures persuaded many companies to reexamine their personnel needs in the wake of the recession of the early 1990s. As a result of this introspection, business operations were streamlined nationwide, leaving a considerable number of companies with reduced payrolls and convincing some observers of the national economy to prognosticate that the focus on efficiency and trend toward smaller staffs may not be just a temporary answer for depressed economic conditions but may reflect a permanent shift in management philosophy. Manufacturers, for example, once produced an excess of goods, holding the surplus in storage or building up sizeable inventories, but after the deleterious economic climate of the early 1990s, they preferred to manufacture products only when quantifiable demand could be measured.

In 1998 the help supply industry generated more than $80 billion in revenues, according to Census Bureau statistics. Quarterly agency surveys by the American Staffing Association suggest that of that amount, about $58.7 billion, or 73 percent, came from temporary staffing services. The rest came from employee leasing services, which involve longer-term co-employer contracts and other minor staffing-related activities. In 1999 the temporary segment was estimated at $64.3 billion, a 9.5 percent gain over the year before.

In the late 1990s the industry went through a spell of significant consolidation. Mergers and acquisitions were fueled in part by slowing growth in the overall market, but also by two strategic trends. For one, large clients seek single-vendor relationships with comprehensive service providers that can fill niches that formerly several different agencies might have. Second, with labor in tight supply and companies increasingly doing business across international borders, large international temp agencies can better meet the needs of multinational firms by having access to labor pools in many different places.

Part of the shift toward providing integrated, comprehensive services was the growth of so-called vendor-on-premises (VOP) services. Under these arrangements, staffing agencies provide management or coordination staff and other resources at the customer's worksite. Used primarily in large contracts, VOP services ease the administrative burden of using temps for the customer and can make the agency more responsive to the client's needs--the agency assumes some of the risk in the deal. Although the practice is not necessarily more profitable for staffing agencies, it is part of the industry's strategic thrust toward providing more value-added and comprehensive solutions to customers' needs. It also makes staffing agencies more important when the job market is tight, as it was in the late 1990s, because they serve additional functions besides simply finding enough bodies to meet the customer's quota. Customer reactions were largely favorable.

VOP services became much more prevalent from the mid-1990s on. From 1994 to 1999, the number of U.S. workplaces using VOP programs more than quadrupled, reaching 4,500 in 1999. Revenues associated with such sites using VOP rose accordingly, from $2 billion to approximately $8.8 billion (those figures include the salaries of all the temps placed at a VOP site). At that level, VOP programs were linked to about 13.5 percent of total U.S. temporary staffing revenues as of 1999.

In 2001, revenues in the temporary help services industry totaled $56 billion, down 12 percent from $64 billion in 2000. Permanent place revenues declined some 25 percent to nearly $10 billion in 2001. All told, staffing industry annual revenues in 2001 dropped 14 percent from the previous year to $66 billion. Temporary staffing agencies employed 9.6 million people in 2001, with an average of 2.18 million temporary and contract employees working on an average day that year. Average daily employment dropped 14 percent from 2000--when a record 2.54 million temporary employees worked on an average day--and the lowest number since 1996. Some agencies estimated job placement requests have declined up to 25 percent. Turnover among temporary employees decreased in 2001 to 341 percent from 418 percent in 2000, with temporary workers finding increased competition for a smaller number of full-time positions. The average length of employment in 2001 was 11.8 weeks, up from 10 weeks the previous year.

In the early 2000s, the temporary help services industry was faced with the worst market it had seen in years. With massive layoffs and a recession, there were fewer positions and more qualified workers looking for jobs. In such a climate, employers had the luxury of waiting to find an ideal candidate, rather than just a qualified, available one. Employers also contacted several agencies looking for the best candidate at the lowest price. The increasing competition among agencies for fewer positions caused many temp firms to cut costs, including lowering markup rates on employees. The focus also shifted from recruiting new employees to attracting and maintaining clients.

According to some industry estimates, the recession of the early 2000s reduced the number of temp help agencies by as much as 30 percent as demand dried up and profits evaporated. Many companies reduced their employee base during the recession due to cost-cutting measures, but when the economy began to turnaround in 2003, those companies began cautiously to rehire. By 2004 temp agencies were once again busy filling positions as hiring picked up steam. Real gross domestic product increased by 3 percent in 2003 and 4.4 percent in 2004, the strongest showing since 1999, signaling a growing economy.

According to the American Staffing Association, during 2004 U.S. staffing companies hired 11.7 million employees, which takes into account a traditionally high turnover rate of 360 percent. Of those 11.7 million, approximately 8 million transitioned into permanent positions. Although industrial and clerical/secretarial positions--accounting for 35.1 percent 20.4 percent, respectively-- continued to dominate the temp job industry, demand for positions that required more skill, education, and training were growing in numbers. Twenty-one percent of temporary and contract employees filled managerial positions; 9.3 percent, information technology; 7.8 percent, healthcare; and 6.4 percent technical.

Revenues from temporary and contract staffing services equaled $63.34 billion in 2004, up 12.5 percent from 2003 and nearly returning to the industry's peak performance of 2000, with sales totaling $63.61 billion. After 11.5 percent year-on-year growth during the first quarter of 2005, the industry posted revenues of $16.9 billion during the second quarter of 2005, up 7.3 percent year on year and exceeding the previous high set in the fourth quarter of 2004. Sales went up again in the third quarter of 2005, reaching $17.6 billion, an increase of 6.8 percent over the same period in 2004.

Although the U.S. temp industry did, as predicted, show a jump in activity that coincided with the end of the recession, some industry insiders noted that the growth rate might be limited to extent by outside factors. Elizabeth Macbride suggested in Crain's New York Business in January 2006, "The rate of growth in the employment services sector has not been as great as it was in past economic recoveries. There are a few likely explanations. One is productivity increases in the overall economy: Companies that in the past turned to temporary employees to fill demand at the beginning of a recovery have been able to squeeze more work from existing employees." Another explanation, said Macbride, was that more companies were outsourcing jobs overseas rather than turning to staffing agencies to fill positions domestically.

Current Conditions

After suffering declines in employment numbers and sales in 2008 and 2009, the staffing industry started to rebound in 2010. According to the American Staffing Association (ASA), sales in the industry were $18.1 billion in the third quarter of 2010--up 35 percent as compared to the same period a year earlier. At that time, staffing companies employed an average of 2.6 million temporary and contract workers per day, an increase of almost 25 percent from 2009. In November 2010 Richard Wahlquist of ASA stated that "During the past 12 months, staffing firms have added over a half million new jobs to the economy." He went on to say "Demand for temporary and contract help is expected to remain strong as businesses turn to flexible work force solutions to help them improve efficiency and productivity while adjusting to changing economic conditions."

According to Tech Job Watch, a service of The Wall Street Journal, jobs in IT were showing the strongest growth in the temporary employment business in 2010 and 2011. Sectors that were expected to look for temporary IT help included "data-intensive sectors," such as banking, financial services, and the healthcare industry. Melisa Bockrath of Kelly Services noted that "Basically, [Employers] are looking at a workforce solution model that gives them flexibility. And [hiring temp workers] gives them access to talent they might need."

Industry Leaders

Two of the industry's founders, Manpower Inc. and Kelly Services Inc., helped spark interest in the use of temporary employees by businesses both domestic and foreign. These companies pioneered many of the industry's developments in service and maintained consistent growth throughout the industry's history.

Initially more aggressive than Kelly, Manpower rapidly expanded during the 1950s through company-owned offices and through its franchise program. Manpower set the tone for the industry's future by supplying industrial temporaries in its first year of operation and then diversifying its services later to include salespeople. By the early 1960s, Manpower had established a technical division to provide architects, engineers, and draftsmen to its clients and operated more than 300 offices. At this point in the company's history, three of every four offices were franchise operations, bringing total revenues to $56.8 million in 1963, with 159,500 temporary workers on its payroll serving 105,000 customers.

Four years later, Manpower opened its 500th office and served 160,000 customers with 270,000 temporary employees. Its international presence by this time had greatly increased, and now included 100 offices located in Europe, Asia, South America, Australia, Mexico, and Canada. To further capitalize on its foreign involvement, Manpower created its "Push Button Global Service" program that enabled traveling businesspersons to be met by a secretary or interpreter on arrival in a foreign city.

By the early 1970s, Manpower had established a considerable lead in the industry, with temporary employment offices in 31 countries. The company's Paris office was the largest of its offices and the heart of its total global presence. Domestically, Manpower had created an assortment of programs to train temporary employees for particular jobs and catered to a diverse clientele, supplying workers trained in marketing, data processing, and a variety of other skilled and unskilled occupations.

Toward the end of the 1970s, Manpower created a petroleum division to supply gas-pumping attendants for approximately 700 service stations in the United States. Through its 750 worldwide offices, the company generated $383 million in revenues in 1977, more than twice as much as its nearest competitor, Kelly Services. By the mid-1980s, with revenues totaling $1.5 billion, Manpower continued to increase its presence domestically and internationally, operating 650 offices in the United States and 450 offices abroad. In 2005, Manpower operated 4,300 offices in more than 70 countries. That year, the company recorded a 7.7 percent annual gain in revenue, making $16.08 billion worldwide. Manpower maintained this level of sales throughout the late 2000s, and in 2010 reported revenues of $16.03 billion. By then, the company operated in 80 countries and was placing about 4 million people a year in temporary positions.

Kelly Services.
Slower to diversify its services than Manpower, Kelly Services initially supplied only one type of temporary employee--female office workers. By the early 1960s, however, Kelly Services, originally Kelly Girl Service Inc., had begun a pilot program of providing male temporaries for industrial jobs. The company was also slower in establishing additional offices, especially in international markets, taking until the early 1960s to even consider foreign expansion, and then it did so only on a limited scale in Canada. Despite these differences, Kelly Services' revenues roughly approximated Manpower's revenues throughout the 1950s and 1960s, the first full decades both companies were in operation. By the close of the 1960s, Kelly Services had nearly 300 offices in operation, a majority of which were franchises like Manpower, and had annual revenues of nearly $80 million.

The company eventually broadened its line of temporary employees, establishing marketing, labor, and technical divisions within its operations during the 1960s; and by the early 1970s, Kelly supplied a selection of temporary workers as diverse as Manpower's. Its clerical workers, still the company's specialty, were trained in 125 skill classifications, blanketing the full spectrum of office and clerical temporary needs, one of which was supplying businesses with data processing workers.

In the late 1970s, Kelly Services, with annual revenues hovering around $160 million, branched out into the health care field, supplying licensed practical nurses and hospital orderlies on a temporary basis. This foray into providing temporary health care workers proved to be a lucrative and prudent move by Kelly Services, enabling the company to carve a niche in a market that would become a boon for temporary employment companies in the 1980s and early 1990s. The company continued acquiring smaller providers throughout the 1990s, including a number in Europe, where it also aggressively opened its own branches in the late 1990s. By 2005 Kelly supported 2,400 offices in 26 countries. Kelly Services had revenues of $5.29 billion in 2005, marking a 6.1 percent rise. Revenues fell slightly through the late 2000s, with sales reaching $4.3 billion in 2009, but the company continued to expand its line of services, adding such employees as lawyers, scientists, substitute teachers, and teleservices personnel. In 2010 the firm placed about 480,000 temporary employees.


In 2009 the temporary employment industry employed about 3.1 million people. According to U.S. Bureau of Labor statistics (BLS), about 39 percent of these had jobs in production, transportation, and material moving; 25 percent were in office and administrative support positions; management, business, financial, and sales occupations constituted 9 percent; and 11 percent had professional and related positions. The BLS predicted that employment in all sectors would increase by 19 percent by 2018, with the strongest growth in the management, business, and financial field and the construction field.

America and the World

Since the genesis of the modern temporary employment industry following World War II, American temporary employment companies have maintained a strong presence in international markets. Manpower Inc., the first U.S. company to aggressively pursue foreign business, paved the way for other industry participants to follow, leading to a broad global representation of American temporary employment companies in the late twentieth and early twenty-first centuries.

By the late 1990s, the business was thoroughly internationalized. All the major U.S. firms had extensive operations in other countries, particularly Europe, which was the second-largest regional market for staffing services behind the United States.

Particularly in the wake of mergers in the mid- and late 1990s, European firms rank alongside U.S. agencies in terms of size and global reach. Indeed, the world's largest staffing agency in the 2000s was Switzerland-based Adecco S.A., which was the product of several key mergers and acquisitions. In 2009 Adecco maintained over 5,500 offices worldwide and reported revenues of $21.2 billion.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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