This report takes an in-depth look at what is commonly referred to as the light industrial segment of the staffing industry. For brevity, and because we include higher risk blue collar occupations within the scope of our report, we use the term “industrial staffing” throughout this report. This report acts as an almanac-like guide to the profile and structure of the US industrial staffing industry, and also provides color commentary and data to help industrial staffing executives with short- and medium-term strategic planning. Throughout the report, we have tried to provide hyperlinks to other SIA research reports and data tools that may be useful to the reader.
Section 1 covers current topics: weakness in industrial staffing demand, continued deceleration and normalization of labor markets in key client verticals, falling hours and overtime, the evolution of occupations and skills supplied by industrial staffing firms, a review of immigration concerns, and the continuing manufacturing investment boom. Our most rigorous thinking on the forecast and outlook for industrial staffing is our US Staffing Industry Forecast report: March 2024 Update. Average sales difficulty stood at 3.58 out of 5 in February 2024, where 5 indicates the greatest level of difficulty. This is the among the highest industrial sales difficulties recorded in our Pulse Survey. In contrast, recruiting difficulty reported by industrial staffing firms is near a low, at 2.94 out of 5.
Section 2 contains our revenue and market share estimates for the largest industrial staffing firms in the US, along with their historical trend. The trend towards greater market share consolidation paused in 2022. The combined market share for the five largest remained steady at 36% and the combined market share of the 15 largest firms fell slightly from 59% in 2021 to 58% in 2022. Our 2023 company revenue and market share figures will be published in the summer of 2024.
Section 3 includes our tracking of the US industrial staffing market size and our forecast for 2024 and 2025. After achieving an all-time high of $38.7 billion in 2022, industrial staffing declined by 12% to $34.4 billion in 2023 – as sharp the pullback industrial staffing suffered during the 2001 recession. The industrial segment constituted 20% of the $170.9 billion US temporary staffing industry in 2023. We also share benchmarks relating to bill rates, markup, gross margin, and internal employee compensation.
Section 4 provides insights on some of the major client industry verticals of industrial staffing, including trends in manufacturing and warehousing. Reliance on overtime decreased in 18 of 20 tracked manufacturing industries in 2023. The greatest declines took place in paper manufacturing (-1.33) and textile product mills (-1.18). Overtime increased in one industry, cutlery, handtool, and other fabricated metal product manufacturing (+0.38) and was unchanged in food manufacturing (+0.0).
Section 5 reviews evolving technology and operating models in industrial staffing. In our 2023 North America Staffing Company Survey, we asked staffing firms their plans for anticipated impacts of AI on staffing. Industrial staffing firms broadly predicted AI will positively impact (77% of firms) their business over the next five years. However, industrial staffing firms also expressed the least intent to use of AI and similar systems, with only 40% planning to make use of at least one of generative AI, machine learning, natural language processing, or deep learning systems. Section 5 also discusses emerging technologies in industrial staffing operations and details the continued adoption of staffing platforms.
Section 6 of this report provides a rigorous tour of the occupational categories related to industrial staffing, with the help of data from the US Bureau of Labor Statistics (BLS). Transportation and material moving occupations and production occupations are the two largest categories of industrial temporary workers, accounting for more than 77.4% of such workers. These two major groups also have a temporary agency penetration rate of 5.4% and 5.8%, respectively, a rate much higher than the 2.0% rate across all US jobs.
Section 7 provides insight on industrial staffing market sizes by geographic regions, including US state and metro areas. California ($5.9 billion), Texas ($4.2 billion), and Illinois ($3.3 billion) were the largest US state industrial temporary staffing markets in 2022. As a percentage of state GDP, the largest states were Tennessee and South Carolina at 0.38% and 0.33% of state GDP, respectively.
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