Outlook (excerpt from American Staffing Association's Annual Economic Analysis, April 2006)The U.S. staffing industry will grow faster and add more new jobs over the next decade than just about any other industry, according to BLS estimates.
In its most recent projections, BLS says that the employment services industry-which is primarily staffing-will grow at an average annual rate of 3.8% from 2004 to 2014, adding nearly 1.6 million new jobs.(39)
On the agency's list of the top 10 detailed industries expected to have the largest job growth, employment services ranks first in terms of number of jobs and third in terms of growth rate.
"The catalyst for [the employment services] industry's growth will be increases in the demand for temporary staffing services as flexible work arrangements and schedules continue to proliferate and businesses make their staffing patterns more responsive to market changes," wrote BLS economist Jay M. Berman in the November 2005 Monthly Labor Review.(40)
Employment in office and administrative support occupations is expected to grow more slowly than overall employment, in part because of "the greater use that organizations make of temporary workers employed by the employment services industry." In the industrial sector, BLS projects growth in construction jobs will offset a decline in manufacturing employment. "One-eighth of the new jobs [in construction]-and the fastest growth-is expected to be in the employment services industry."
While BLS estimates that manufacturing jobs will decline by more than 750,000 jobs, which is one-quarter the rate of the previous decade, Berman notes nonetheless that production "employment is projected to grow by nearly a quarter of a million in the employment services industry, which provides employees to other industries on a contract or fee basis." As for other sectors, Berman says, "Nearly 25% of all new jobs will be in the professional, scientific, and technical services sector, which includes management, scientific, and technical consulting; and accounting, tax preparation, bookkeeping, and payroll services." About 20% of new jobs are expected to be in health care.
Other leading growth sectors include education (especially at colleges) and government (mostly local). Berman also noted that "Legislation and court rulings setting standards in occupational safety and health, equal employment opportunity, wages, health care, pensions, and family leave will increase demand for employment, recruitment, and placement specialists." Because staffing professionals are already well-versed in employment law-and ASA members are kept abreast of new developments-organizations can turn to staffing companies to access specialists with that expertise.
Among the 10 major occupational groups tracked by BLS, employment in the two largest in 2004-professional and related occupations and service occupations-will increase the fastest and add the most jobs through 2014. Just these two groups are expected to account for almost 60% of the total job growth in that period, said Norman C. Saunders, the BLS economist who oversees the agency's projections.(41)
But the two groups, he noted, are also on opposite ends of the educational attainment and earnings spectrum. It's important to consider the key assumptions BLS made in developing these projections: the economy will continue to grow at a strong pace, though a little slower; inflation will be restrained; productivity growth will moderate closer to historical norms; the unemployment rate will remain steady at about 5%; and both the U.S. population and work force will grow at an annual rate of 1%.
These assumptions are important because their indicators were headed in this direction when Ben Bernanke's "Goldilocks" op-ed ran last summer, and it's where the economy was headed in the first quarter of this year, when Harris Nesbitt's Jeff Silber glowed about Goldilocks too. Moderating employment growth in the staffing industry "may actually be a good thing," Silber says, because it suggests overall employment growth may slow, which would "temper unemployment rates and keep labor markets from getting too tight."(42)
While a falling unemployment rate may boost demand for staffing and recruiting services, when it falls below 4.5%, he says, the labor market becomes too tight and growth of the staffing industry is constrained by lack of supply.
To be sure, ASA data show that the staffing industry employment growth rate dropped from double digits in 1997 to the low single digits in 1998(43) when, BLS data show, the U.S. unemployment rate fell into the 4.3% to 4.6% range.(44)
Assuming GDP of mid- to low 3% and an unemployment rate of 5%, Silber is projecting temporary staffing employment growth of 4% to 6% and revenue growth of 7% to 9% in 2006.(45) Staffing Industry Analysts Inc. estimates that temporary help revenues will grow 9% in 2006, and search and placement revenues will grow 22%.(46)
These growth rates are slightly lower than 2005's. But they are more than double the expected rate of overall economic growth. Goldilocks economy or not, what worries America's staffing professionals most is finding qualified employees to meet their customers' needs. Both already see skill shortages. This poses clear challenges-but also exciting opportunities-for an industry that specializes in finding the best talent for businesses.
How associates can benefit in the SF Network
- Create A Company in the StaffingForce Platform
- Enter A Contact = Contact Sourcing Agent – 5% Performance Percentage
- Interview A Job Seeker = Candidate Agent – 15% Performance Percentage
- Make A Match Between A Candidate & A Job - Matching Agent – 10% Performance Percentage
- Enter A Job Lead = Job Sourcing Agent – 5% Performance Percentage
- Enter A Hiring Manager = Hiring Manger Sourcing Agent – 5% Performance Percentage
- Enter A Job Description = Job Agent – 25% Performance Percentage
- Facilitate The Placement Process = Placement Agent – 35% Performance Percentage
With placement fees ranging from $10,000 to $40,000 – These are all very important items for the Associates to learn. Understanding them completely and having the ability to do them well is critical to everyone’s success.