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Employment Agencies Report 1st Increase in 4 Years

For the first time in four years, Orange County’s largest employment agencies reported an increase in revenue in 2021 as the industry began recovering from the pandemic.

Total annual revenue for the 17 ranked firms rose 1.7% to $538.6 million in 2021. That follows a 7.3% decrease in 2020, a 1% decline in the pre-pandemic days in 2019 and a 0.3% drop in 2018. The last increase was 3% in 2017.

The firms with offices in Orange County performed better than companywide, where sales fell 8.5% to $17.5 billion.

The Irvine office of Select Staffing, based in Atlanta, regained the top spot after falling last year to No. 2. Its revenue rose 17% to $96 million.

“We saw a sharp increase in the demand for our staffing services as our clients navigated the choppy waters created by the pandemic and the supply chain crisis,” said Gunnar Gooding, president of the Southwest for Select Staffing.

Staffing agencies said they placed 23,551 temporary workers at OC firms last year, a 1.3% decline from 2020. Still, that was better than the 20% drop in 2020 and the 11% fall in 2019.

The number of permanent workers fell 21% to 676, better than the 27% drop in 2020.

The Business Journal ranked the 17 largest firms that reported at least $10 million in OC billings. They employ about 1,000, a 13% rise from 2020.

Industry Shift

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

The onset of the pandemic, which sent Orange County’s unemployment level to 8.8% in 2020 from 2.8% the year prior according to the state Economic Development Department, dealt a blow to the industry.

Last year, unemployment fell steadily through the year, ending at 3.7% in December.

Of the ranked agencies, 12 reported an increase while only two reported declines; the remaining three were Business Journal estimates. That compares to a year ago when only three firms reported an increase and nine saw revenue decline.

Gooding is seeing a clear shift favoring workers in OC.

“In this current climate, the temporary workers have significant leverage to insist on higher wages and this pressure is being felt across all industries in Orange County,” Gooding said. “Companies that cannot or will not raise wages are dealing with unprecedented levels of turnover and difficulty in filling their open positions.”

Select Staffing reported an 8.9% increase in the number of temporary workers placed to 6,911.

“Those economic headwinds are creating enormous wage inflation throughout Orange County and across the country as companies are facing a shortage of workers and thus need to pay higher wages to attract and retain the limited available workforce,” Gooding said.

Highlights

• Prior No. 1 Aerotek Inc., which is based in Hanover, Md. and has an office in Orange, reported the biggest drop as revenue fell $48.8 million, or 54%, to $41.7 million. The company, which now ranks No. 5, cut its OC workforce by 60% to 33 employees, compared to 82 a year ago.

Aerotek founder Steve Bisciotti owns the Baltimore Ravens.

• Roth Staffing Cos. in Orange reported $74.8 million in revenue, up 21% from 2020 and good for the No. 2 spot, up from No. 4 a year ago.

• The biggest increase in dollar terms was a $16.1 million jump to $59 million for Tustin-based PTS Advance, which climbed to No. 4 from No. 7.

• The biggest increase percentage wise was 79% to $18 million of Lake Forest’s B2B Staffing Services Inc. Ranked No. 14, it employs 25.

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Peter J. Brennan
Peter J. Brennan
Peter J. Brennan has been a journalist for 40 years. He spent a decade in Latin America covering wars, narcotic traffickers, earthquakes, and business. His resume includes 15 years at Bloomberg News where his headlines and articles sometimes moved the market caps of companies he covered by hundreds of millions of dollars. His articles have been published worldwide, including the New York Times and the Washington Post; he's appeared on CNN, CBC, BBC, and Bloomberg TV. He was awarded a Kiplinger Fellowship at The Ohio State University.
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