Despite the ongoing pandemic, the US economy is expected to end the year with blazing GDP growth of 5.6% and continue with robust 3.5% expansion in 2022, according to The Conference Board. All this economic activity is good news for industrial staffing firms, as we project industrial staffing revenue to grow 8% in 2022 to achieve a record $36.7 billion. As we head into the year-end holiday period, we take a pause to look at the key nationwide players in the segment — based upon SIA’s Largest Industrial Staffing Firms in the US report — to gain insight on the competitive landscape. The report identifies 54 industrial staffing firms that generated revenue of $100 million or greater in 2020.
The largest industrial staffing firms account for a substantial share of the US market, and that share has grown over the past decade, as shown in the graph below. In 2020, the five largest firms represented 36% of the market and the 15 largest accounted for 61%, both record levels. Why might this be? Factors that support the flourishing of large industrial staffing firms include the ability to build brand awareness with candidates and clients, and the ability to invest in cutting edge technology, including front-office software as well as specialized talent acquisition capabilities. As digital staffing platform technology gains prominence in the marketplace, successful industrial staffing firms may benefit from network effects and the ability to rapidly and efficiently scale operations to meet client demands.
Market share held by the five and fifteen largest industrial staffing firms
By our estimates, the five largest industrial staffing firms in 2020 were EmployBridge, Express Employment Professionals, Aerotek (Allegis Group), Randstad and TrueBlue. Altogether, these firms generated $10.9 billion in industrial staffing revenue. EmployBridge appears likely to retain its market leadership position heading into 2022 in part due to its recently announced acquisition of Hire Dynamics, the 23rd largest industrial staffing firm in 2020 by our estimates. Express Employment Professionals continues to achieve growth due to expansion in the number of its franchise locations, which have grown to more than 830 this year from 774 in 2016.
The next five largest industrial staffing firms were Manpower, Adecco, Kelly Services, Workrise and Recruit. Noteworthy among this group is Workrise, the Texas-based firm focused on skilled trades and light industrial staffing, and formerly known as RigUp. Founded in 2014, the venture has received over $700 million in funding, and considers itself a technology company as much as a staffing company.
Regardless of company size, industrial staffing firms small and large alike find themselves starting a new year in an environment of unprecedented demand and challenging candidate supply. With competition for workers fierce, those staffing firms that are best able to deliver a convenient and positive experience for both candidate and client, via a combination of technology and human touch, are most likely to retain and expand their market share in the coming year.
