Personnel Services
SIC 7360
NAICS 5613
Personnel services link job seekers with employers under various arrangements. By far the most common form is through temporary staffing, wherein the employee is paid by the personnel service to work temporarily for another firm needing assistance. Other types of personnel services include employment agencies, which seek to place job seekers in permanent positions, and recruitment agencies, which also contract to fill permanent positions, but typically perform more screening—and sometimes searching—to find employment candidates who meet certain criteria.
In 2003, the value of the worldwide personnel services industry was placed at between US$200 billion and US$400 billion. The dominant sector in the industry was temporary staffing. According to the American Staffing Association (ASA), on an average day in 2003 these firms employed 2.27 million temporary workers. In the mid-2000s, those employees in "highly skilled" fields such as accounting, law, science, and engineering were the fastest-growing category of temporary workers.
The industry experienced phenomenal growth during the 1990s, as average daily employment increased steadily from 0.98 million jobs in 1991 to a record 2.54 million in 2000. However, conditions changed in the wake of an economic recession that was exacerbated by the terrorist attacks against the United States on September 11, 2001. Subsequently, daily staffing fell to 2.18 million workers in 2001 and 2.06 million workers in 2002. Overall, the ASA reported that 739,000 contract and temporary staffing jobs were lost as a result of the 2001 economic recession. After peaking in the third quarter of 2000, contract and temporary-staffing levels declined through the first quarter of 2002, falling 28 percent before conditions started to improve.
According to Adecco S.A., the world's largest employment services company, the United States, United Kingdom, Italy, France, Spain, Switzerland, Canada, and Australia are among the world's largest staffing markets, accounting for the majority of global staffing demand. However, Euromonitor was expecting the market for employment services in China to grow by a staggering 160 percent between 2003 and 2008.
The personnel services industry originated in the early to mid-twentieth century from three key developments: (1) government agencies that were created to combat unemployment, grounded on the emergence of unemployment as a social problem in industrial society; (2) demand during and immediately after World War II for temporary clerical work, originally when permanent employees were sick or on vacation; and (3) executive search firms, or so-called headhunters, who were sought to help companies recruit highly qualified personnel. While other kinds of organizations also evolved with and from these developments, in terms of revenues and influence, for-profit temporary staffing agencies have assumed paramount stature.
During the 1990s, temp services grew large enough that their volume of job placements could be measured as a percentage of national labor forces, although, as of the late 1990s, in no country did that percentage exceed 5 out of every 100 workers. In 1997 the Netherlands was estimated to have the highest proportion of temporary staffing in its labor force, with 3 percent of all Dutch workers employed by temporary services. France ranked second with 2 percent, followed by the United States and the United Kingdom, which were even at 1.8 percent. Temporary staffing was estimated to account for 0.5 percent of the working populations in both Germany and Japan.
The personnel services industry has its roots in the clerical staffing business, but the industry has broadened its spectrum of placements to include factory workers on up to top executives. In early 2001, office and clerical positions accounted for slightly more than 20 percent of all temporary and contract positions, according to the ASA. About 35 percent of workers were employed in the industrial sector, followed by professional and management (21 percent), information technology (9.3 percent), health care (7.8 percent), and technical (6.4 percent).
By 2004, highly skilled professionals such as accountants, attorneys, biochemists, and engineers were the fastest-growing category of temporary workers. In fact, at the largest staffing enterprises these workers constituted up to one-third of placements. Marketing professionals were another emerging occupational group within the temp industry.
The biggest development impacting the personnel services industry during the early 2000s was the 2001 economic recession, which led to the loss of 739,000 contract and temporary staffing positions, according to the ASA. Contract and temporary staffing levels reached a high point in the third quarter of 2000, and then declined through the first quarter of 2002, falling 28 percent before any signs of improvement appeared. This mirrored trends in the larger U.S. job market, which lost 2.7 million jobs between March 2001 and August 2003, based on figures from the U.S. Department of Labor's Bureau of Labor Statistics (BLS).
Sales in the temporary help sector continue to make up the biggest share of revenue in the personnel services industry. Sales in this sector increased more than threefold between 1990 and 2000, reaching a record US$63.6 billion. However, the economic recession caused industry sales to decrease US$7.4 billion in 2001, to US$56.2 billion. After declining to US$55.2 billion in 2002, sales improved with the larger economy, reaching US$56.3 billion in 2003.
In July of 2003, a conference was hosted by Adecco at the London Business School to explore temporary staffing in a number of countries. At the conference, Hiroshi Saito, a management professor at Kanto Gakuen University in Tokyo, touched upon a number of important developments that were benefiting the temporary staffing industry in Japan. One major trend was the gradual relaxation of government restrictions on temporary employment agencies, which were first allowed in Japan during 1985.
According to an article in Japan Press Weekly, the nation's temporary workforce doubled from 1999 to 2002 as the Japanese government allowed temporary...
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