SI Review: December 2011


Research Report: Direct Hire Picks Up Steam

Direct Hire Picks Up Steam

Volatile sector coming back strong

By Craig Johnson

Direct hire ranks among the more volatile sectors of the staffing industry, with growth of 15 percent to 35 percent in good times and sharp declines in difficult economic times.

Right now, research from Staffing Industry Analysts, the publisher of this magazine, indicates that direct hire revenue is gaining strength despite high college-level unemployment and a tepid economy. Revenue is expected to reach $5.1 billion this year from $4.3 billion in 2010, and it’s expected to rise further in 2012.

“Direct hire was an $8.2 billion sector just a few years ago,” said Jon Osborne, vice president of research and editorial at Staffing Industry Analysts. “It has a way to go before getting back to that level. Assuming the economy continues to recover, this sector should continue to contribute disproportionately to industry growth for the near term.”

Staffing Industry Analysts’ monthly Pulse Survey of staffing firms indicated that direct hire had year-over-year revenue growth of 33 percent in July with that growth accelerating for more than a year. In addition, providers of direct hire staffing appear to be hiring themselves; internal employment in these agencies rose 10 percent, according to data from the U.S. Bureau of Labor Statistics.

Direct hire’s upward trend is occurring despite historically high college-level unemployment rates. In September, college-level unemployment was 4.2 percent (yes, that’s far lower than the general unemployment rate but still double the rate of roughly 2 percent just a few years ago). Such high rates haven’t been associated with strong direct hire growth in the past, so this would seem to defy trends, but this may reflect the uneven employment picture where a number of skills, particularly in healthcare and IT, remain in short supply despite the broader labor surplus.

According to Staffing Industry Analysts’ recent direct hire growth update report, occupations with unemployment rates of 1.5 percent or lower include: physicians and surgeons, network administrators, physical therapists, compliance officers, psychologists, dentists, detectives, editors, speech-language pathologists and phlebotomists.

The largest direct-hire staffing providers in the U.S. include Robert Half International Inc., Adecco and the Allegis Group.

Craig Johnson is managing editor, staffing publications, at Staffing Industry Analysts. He can be reached at For more information on staffing research, contact


Median direct-hire fee

The median fee for a direct hire placement was 20 percent of salary, according to a 2010 survey of staffing firms by Staffing Industry Analysts. Only one in 10 staffing firms charged 25 percent or more of salary.


U.S. Direct Hire Temporary Staffing Revenue, 1995-2010

Click to enlarge image.


Add New Comment

Post comment

NOTE: Links will not be clickable.
Security text:*