IPA Provides Useful Information about the Employment Services Industry
- Employment services ranks among the industries projected to grow the fastest and to provide the most new jobs.
- Most temporary jobs in this industry require only graduation from high school, while some permanent jobs may
require a bachelor’s or higher degree.
- Temporary jobs provide an entry into the workforce, supplemental income and a bridge to full-time employment for
NATURE OF THE INDUSTRY
Although many people associate the employment services industry with temporary employment opportunities for
clerical workers, the industry matches millions of people with jobs, providing both temporary and permanent
employment to individuals with a wide variety of education and managerial and professional work experience.
Occupations in the industry range from secretary to computer systems analyst, and from general laborer to
nurse. In addition to temporary jobs in these occupations, permanent positions in the industry include
workers such as employment interviewers and marketing representatives who help assign and place workers in
jobs. Nearly half of all jobs in employment services are at large establishments with 250 or more workers.
The employment services industry has three distinct segments. Employment placement agencies list employment
vacancies and place permanent employees. Temporary help services, also referred to as temporary staffing
agencies, provide employees to other organizations, on a contract basis and for a limited period, to
supplement the workforce of the client. Professional employer organizations are engaged in providing human
resources and human resources management services to staff client businesses. They also assign workers to
client locations, thereby assuming responsibility as an employer while providing a cost-effective approach
to the management and administration of the human resources functions of its clients on a contract basis.
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 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 temporaries; relatively few are permanent staff.
Professional employer organizations specialize in performing a wide range of human resource and personnel
management duties for their client businesses, including payroll processing, accounting, benefits administration,
recruiting and handling labor relations. Employee leasing establishments, which are a type of professional
employer organization, typically acquire and lease back some or all of the employees of their clients and serve
as the employer of the leased employees for payroll, benefits and related purposes.
Traditionally, firms that placed permanent employees usually dealt with highly skilled applicants, such as
lawyers or accountants and those placing temporary employees dealt with less skilled workers, such as
administrative support occupations. However, temporary help services firms increasingly place workers who have a
range of educational backgrounds and work experience because businesses now are turning to temporary employees to
fill all types of positions—from administrative to managerial, financial, professional and production.
The average annual work week in the employment services industry was about 32.6 hours in 2002, compared with the
average of 33.9 hours across all industries. The low average work week reflects the fact that a temporary employee
could work 40 or more hours a week on a contract for an extended period and then take a few weeks off from work.
Most full-time temporary workers put in 35 to 40 hours a week, while some work longer hours. Permanent employees
in employment agencies usually work a standard 40-hour week, unless seasonal fluctuations require more or fewer
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. Temporaries 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 temporaries 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.
Employment as a temporary is attractive to many. The opportunity for a short-term source of 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.
The annual injury and illness rate for the employment services industry as a whole was 3.6 cases for every 100 full-time
workers in 2002, lower than the rate of 5.3 for the entire private sector. Temporary workers in industrial occupations often
perform work that is more strenuous and potentially more dangerous, so they may have a higher rate of injury and illness.
The employment services industry provided 3.2 million jobs in 2002, about 2.2 million of them in temporary help services
firms. Professional employer organizations employed 790,000 and employment placement agencies employed another 281,000.
Although about 36,000 of the 62,000 establishments in the industry are temporary help services firms, they employ 2 out
of 3 industry workers.
Employment in the employment services industry is distributed throughout the United States. Workers are somewhat younger
than those in other industries—44 percent of employment services workers are under 35, compared with 36 percent of all
workers, reflecting the large number of clerical and other entry-level positions in the industry that require little
OCCUPATIONS IN THE INDUSTRY
The employment services industry encompasses many fields, from office and administrative support occupations to
professional and production occupations. 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.
The staff of employment service agencies is responsible for the daily operation of the firm. Many of these workers
are in management, business, and financial, and sales occupations, which together account for only about 7 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. Most work in the personnel supply services industry. Sales
workers actively pursue new client firms and recruit qualified workers. Because of fierce competition among
agencies, marketing and sales work at times can be quite stressful.
About 3 in 10 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 are preferred for these
jobs, although some persons take special training to learn skills such as bookkeeping and word processing.
Receptionists greet visitors, field telephone calls and perform assorted office functions. Secretaries
perform a growing range of tasks, such as keyboarding and answering the telephone, depending on the type of
firm in which they work. Medical secretaries make appointments and need a familiarity with common medical terms
and procedures; legal secretaries must be familiar with the format of common legal documents. General
office clerks file documents, type reports and enter computer data. File clerks classify and
store office information and records. Data entry keyers type information into a computer data base, either
through a personal computer or directly into a mainframe computer. Word processors and typists enter and format drafts
of documents using typewriters or computers. Bookkeeping clerks compute, classify and record transaction
data for financial records and reports.
Production occupations and transportation and material moving occupations together account for 40 percent
of employment in the employment services industry. Many of these jobs seldom require education beyond high school,
although related work experience may be preferred for some. Others require significant experience and on-the-job training.
Highly skilled assemblers and fabricators may assemble and connect parts of electronic devices, while those
who are less skilled work on production lines, continually repeating the same operation. Helpers perform a variety
of mostly unskilled tasks. 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.
A growing number of temporary workers are specialized professional and related workers, who currently account for another 9
percent of employment. 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, lawyers or attorneys
generally need 4 years of college and 3 years of law school. They act as advisors, providing counsel on legal rights and
obligations and suggesting particular courses of action in business. Computer programmers write, test, and
maintain the detailed instructions, called programs or software that computers must follow to perform their functions. Other
computer specialists include computer support specialists, who provide technical assistance, support and advice to customers
and users. Licensed practical nurses provide basic bedside care to patients. Registered nurses 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.
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 remainder of the workers in this industry includes those in farming, fishing, and forestry and installation, maintenance
and repair occupations.
TRAINING AND ADVANCEMENT
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, therefore, a
growing number of jobs will require professional or advanced degrees.
Many 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,
temporaries transfer to full-time jobs with other employers. Turnover among temporaries within help supply firms
usually is very high because few choose to work as temporaries for long; many accept offers to work full time for
clients for whom they worked as temporaries. Some experienced temporaries may be offered permanent jobs with help
firms, either as receptionists or in positions screening or training others for temporary jobs.
Staff of employment placement agencies and permanent staff of temporary help services firms typically are employment
interviewers, administrative support workers, or 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 word processors, are more likely to hire interviewers with less education, but who have experience in
those occupations. Staff 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.
In 2003, earnings among nonsupervisory workers in employment services firms were $13.04 per hour and $425
per week, lower than the $14.95 an hour and $506 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, temporaries
usually earn less than workers employed as permanent staff, but some experienced temporaries make as much
as or more than workers in similar occupations in other industries.
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. Less than 3 percent of
workers in employment services are union members or are covered by union contracts, compared with about 15
percent of workers in all industries combined.
Employment services ranks among the fastest growing industries in the Nation and is expected to be among those
that provide the most new jobs. The industry is expected to gain about 1.8 million new jobs over the 2002-12
projection period. Wage and salary employment in the employment services industry is expected to grow 54 percent
over this period, more than 3 times the 16-percent growth projected for all industries combined.
Growth in demand for temporary employees fueled the expansion of the industry throughout the 1990s and is
attributable to a number of factors. As competition increased, businesses sought new ways to make their staffing
patterns more responsive to changes in demand. To achieve this, they hired temporary employees with specialized
skills to reduce costs and to provide the necessary knowledge or experience in certain types of work. Despite
recent industry job losses, increasing demand for flexible work arrangements and schedules, coupled with significant
turnover in these positions, should create plentiful job opportunities for persons who seek jobs as temporaries or
contract workers through 2012. In particular, suppliers of medical personnel to hospitals and other medical facilities
should continue to fare 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.
Employment in professional employer organizations also grew rapidly during the 1990s 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 spurred 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. This trend is expected to continue
as businesses enter into relationships with professional employer organizations and shift these responsibilities to
Employment placement agencies are expected to continue growing, but not as fast as temporary help services or
professional employer organizations. Growth in these agencies stems from employers’ increasing willingness to allow
outside agencies to perform the preliminary screening of candidates and the growing acceptance of executive recruitment
services. However, online employment placement agencies operate without employment counselors and need fewer
administrative support workers. 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
dampening employment growth.
Most new jobs will arise in the largest occupational groups in this industry—office and administrative support
occupations, production, and transportation and material moving occupations. However, the continuing trend toward
specialization also will spur growth among professional workers, including engineers, computer specialists, and
healthcare practitioners such as 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 along with competition among these firms for the most qualified workers and the best
Industry data is republished with permission by the Bureau of Labor Statistics