Industrial Staffing Growth Assessment : Market Research Report

Industrial Staffing Growth Assessment

Published by: Staffing Industry Analysts, Inc.

Published: Dec. 1, 2006 - 75 Pages

SECTION 1: Staffing Industry Analysts Perspective and Executive Summary; Essential observations and advice to gain from this report
SECTION 2: Key Industrial Segment Drivers and Trends; U.S. industrial temporary staffing revenue growth and U.S. GDP growth, 1995-2005; Historical growth as a function of U.S. GDP growth and U.S. unemployment rates; Projected growth as a function of U.S. economic forecasts; Long-term trends in the manufacturing, construction and transportation industries; Estimated industrial penetration rate, 1980 & 2005; How industrial temporary staffing buyers’ purchasing motivations are unique; Cyclical employment volatility, by industry; Fully-loaded cost of traditional workers vs. temporary workers, by bill rate; Relative temporary help penetration and projected penetration, by skill set
SECTION 3: Industrial Segment Profile and Prospects; Industrial temporary staffing—what it is; Industrial temporary staffing, size and growth rates, 1995-2005; Industrial temporary staffing market size by sub-segment; Industrial temporary staffing revenue growth vs. total temporary help revenue growth; Industrial temporary staffing share of total industry; Industrial temporary staffing projected growth rates; Relative gross margins, operating costs/revenue and EBITDA/revenue; Trend in industrial revenue change vs. gross margin change; Industrial permanent placement revenue; Long-term projected growth rates for industrial temporary staffing
SECTION 4: Targeting the Right Market(s); Top industries for industrial temporary staffing sales; Industry share of total industrial temporary employment; Top U.S. metros for industrial employment, by sub-segment; Percent of temporary workers buyers, by size of company, who buy industrial temporary workers; Percent of temporary workers buyers, by skill segments purchased, who buy industrial temporary workers
SECTION 5: Delivering the Right Skills; Fastest-growing large employment industrial occupations; Largest occupations by industrial temporary help market size and employment; Industrial occupations most highly penetrated by temporary staffing; Industrial occupations experiencing the greatest shortage of workers; Industrial occupations forecast to experience fastest growth in temporary help
SECTION 6: The Competiton; Top U.S. Industrial temporary help providers and estimated Industrial revenue; Typical other temporary staffing skills offered by Industrial temporary staffing providers; Unique features of Labor Ready’s business model; Estimated number of temporary staffing firms offering Industrial skills, by selected skills
SECTION 7: Industrial Buyer Methods of Operation; Supplier selection criteria used by industrial buyers; Supplier evaluation metrics used by industrial buyers; Number of players and degree of centralization of players with lead roles in selecting staffing suppliers; Number of players and degree of centralization of players with lead roles in authorizing spending; How degree of decision making centralization affects supplier selection and spending authorization; Company contact policies of industrial buyers; Contingent staffing supplier management strategies in place today; Contingent staffing supplier management strategies being considered for next two years; Number of staffing suppliers used by industrial buyers
SECTION 8: Other Industry Trends and Considerations; Industrial buyers perception of contingent worker quality vs. regular worker quality; Loyalty of industrial buyers vs. buyers generally; Internal salaries at industrial temporary staffing firms vs. other staffing segments
SECTION 9: Keys to Success in This Industry; Appendix; Trend in industrial staffing pay and bill rates, 1Q04-2Q06; Trend in industrial staffing gross margins 4Q03-2Q06; Top industrial staffing company descriptions

Abstract

Industrial temporary staffing is the staffing segment of broad shoulders, a blue-collar colossus that advances relatively slowly, relatively steadily, with sharp changes in growth only at junctures of change in the economy-indeed, it is the province of this type of staffing to absorb a large measure of the shock of economic change. In times of sudden improvement in economic fortunes, industrial temporary staffing is the first responder, the minute man that mans new growth; in times of sudden deterioration in economic fortunes, it is another type of first responder, the first to pack its tools up and go home.

This segment is the first responder in another way as well. Nowhere is the revolution that is temporary staffing more advanced than here. Usage rates in this segment are the highest of any temporary staffing segment--and are poised to further experience the greatest increase in such rates. This tortoise is in some ways also the hare.

While the underlying long-term prospect here is one of expansion, in the short run we expect that expansion will slow slightly. Economists forecast mildly weak and/or conflicted changes in GDP growth rates and unemployment rates for the foreseeable future. Those scenarios are consistent with historical low to mid-digit industrial temporary staffing growth. It's worth bearing in mind, however, that just 5% growth in this $26 billion titan amounts to $1.3 billion in additional revenue in a single year.

We estimate that roughly 5,000 temporary staffing firms--more than half of all such firms--do at least some industrial temporary staffing. Nonetheless, business here is surprisingly concentrated. The top fourteen companies together generate $10.3 billion in segment revenue, or roughly 40% of the market.

This is a segment of enormous potential, not only because of its size and compelling logic but because, despite wide participation by staffing firms, it has yet to be satisfied. Typical buyers of industrial temporary help neither consider temporary staffing firms to be consistent screeners of quality (nearly half consider temporary workers here to be inferior to permanent workers) nor would recommend their current staffing firm to a friend or colleague. Meeting the challenge of providing consistent quality at competitive prices is no small task, but the firm in this segment that succeeds may-like McDonalds and Starbucks before it-find a once restless, unsatisfied market suddenly concentrated in its hands.

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Industrial Staffing Growth Assessment

Table of Contents

Abstract