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Thursday, Jul 18, 2024

OC Employment Firms Decline 1% in Revenue

Orange County’s largest employment agencies outpaced their national counterparts in 2023, though not enough to see a year-over-year gain in business.

The area’s top 15 agencies reported $594 million in total revenue last year, a decline of about 1% year-over-year.

It could’ve been worse; revenue for employment agencies in the U.S. last year declined an estimated 10% to $201.7 billion, according to a report from Staffing Industry Analysts (SIA).

2022 marked a record year for the industry, SIA reports.

The SIA report cites factors such as labor hoarding and a shrinking number of remote work positions to blame for last year’s industrywide decrease.

SIA predicts that the U.S. industry will return to growing in 2024, with increases in sectors such as engineering and education.

Staffing agencies are often seen as a bellwether for the job market, as companies tap their services to fill positions ranging from industrial to administrative, before making permanent hires.

Orange County’s unemployment stood at 4.2% in January, the highest level in two years.
That figure is up from a revised 3.8% in December and above the 3.4% rate seen in January last year, according to data this month from the state’s Employment Development Department.

The state’s unemployment rate was 5.7% in January while the U.S.’s was 4.1%.

20K Placements

The modest drop in 2023 revenue for OC’s agencies follows steady growth in recent years, with an 11% jump in 2022 and a 1.7% increase in 2021.

OC employment agencies underwent three years of declines prior to 2021, when companies suffered labor losses from the pandemic.

This year’s Business Journal Employment Agencies list includes 15 firms ranked by OC revenue.

Staffing agencies said they placed 20,543 temporary workers at OC firms last year, down 4.7% from 2022.

The number of permanent workers similarly decreased 14% to 678, a drop from the 28% increase the prior year.

Of the ranked agencies, five reported an increase, four reported a decline and the remaining six were Business Journal estimates.

Top 3 Firms

One thing that remained unchanged from last year was the three largest staffing firms topping the list.

Atlanta-based Employbridge, formerly known as Select Staffing, retained its No. 1 position.

The firm, which operates locally in Irvine, saw OC revenue decrease 12% to $88.1 million.

Employbridge last month posted highlights from the Bureau Labor Statistics which reported that the U.S. economy added 275,000 jobs in February, about 9% above analysts’ predictions. This unexpected gain was attributed to a spike in healthcare services, transportation and warehousing and food service jobs.

Orange-based Roth Staffing Cos. LP, the second largest on the list, reported an 8.8% decrease to $74.3 million.

Roth Staffing is the largest employment agency based in OC with 156 employees locally.

“Many industries and companies experienced over hiring in 2021 and 2022, contributing to fluctuations in the market,” Roth Staffing’s Chief Executive Adam Roth told the Business Journal.

Completing the top three is Tustin-based PriorityWorkforce Inc., which reported a 3% increase in revenue to $65 million.

Job Demand

For the second year in a row, Irvine-based Pacific Companies Inc. saw the largest local revenue increase.

The firm, which specializes in healthcare placements, reported a 35% increase in revenue to $46 million.

The largest decrease in local revenue came from Irvine-based Express Employment Professionals, down 21% to $17.2 million, moving it down one slot to No. 12 on the list.

“2022 sales were the company’s highest on record, and 2023 was just a slight decrease,” William Dunn, franchise developer and owner at Express Employment, told the Business Journal.

“As the economy continues to recover from the pandemic, conditions in 2023 were simply different than the year before.”

Industries seeing the most demand and growth in OC include jobs in healthcare, manufacturing and hospitality, according to Dunn.

He said staffing agencies both locally and nationally are currently experiencing a transitional phase during the backdrop of an election.

“Our predominant sector, historically characterized by evaluation hire, is presently witnessing a shift towards temporary arrangements,” Dunn said.

The firm anticipates a roughly 4% payroll increase in OC for this year driven by a shortage of talent creating a competitive landscape for employers.

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