2017 was a better year for the Orange County operations of employment agencies. The placement firms saw growth across nearly all metrics, from annual revenue to number of temporary and permanent workers landing jobs with clients.
Total annual revenue of the largest agencies—as measured by local revenue—on this year’s Business Journal list hit $890 million, a 3% spike over 2016.
Temporary and permanent placements, also known as direct hires, experienced unit growth of 6% and 11%, respectively, though nearly a third of the 29 ranked agencies didn’t provide complete data. The list includes agencies with OC operations netting upwards of $2.5 million in revenue.
2016’s top two retained their spots, while there’s a new No. 3.
• No. 1, Select Staffing, based in Atlanta, reported annual revenue reached $114 million, a 3% bump from last year’s $110 million.
• No. 2, Roth Staffing Cos., based in Orange and easily the biggest local employment agency, rang up $95 million in revenue, in line with the entire roster with a 3% increase.
• No. 3, Kelly Services Inc., based in Tory, Mich., hit $80 million in revenue, a whopping 19% jump from $67 million in 2016. The growth helped bump the agency up one spot.
Keeping in Touch
Genine Wilson, Southern California territory vice president for Kelly Services, said the firm’s focus on improving infrastructure, such as growing its recruitment team, coupled with improving client relationships, fueled growth.
The firm, whose local office is in Orange, focuses on engineering, information technology and office clerical.
“It’s two-sided,” Wilson said. “We’ve got to continue to be consultants to help bring workforce solutions to the organizations we’re working with and really aggressively focusing on the talent pool and retention.”
Wilson said she’s confident about the job market this year but said the challenge for the firm and county will be talent availability. It’s why Kelly plans to be more proactive about staying in touch with employees and clients.
“If a project is ending, I want to stay ahead and work with (the employee) to place them in another project,” she said. “And being able to call organizations and say, ‘Hey, we’ve got great talent coming available.’ There’s a lot of engagement and retention activities.”
Kelly isn’t alone.
Gunnar Gooding, regional president of Select Staffing, said it plans to roll out a mobile app to all of its markets this year to share job openings to temporary associates.
“The mobile app will allow our associates to not just view and apply to jobs but also receive and accept job offers from our recruiters in real time,” he said. “Our app puts assignment details and payroll info in the palm of their hand to easily access the information they need.”
But sometimes it takes more than just staying in touch with talent to help fill positons.
Wage Boost
Gooding told the Business Journal last year that employers “refused to keep pace with the market” on raising wages for entry-level workers in 2016, but he said recently that he’s noticed a change.
“We saw our clients across Orange County make a strong commitment to raising wages in order to keep pace in the highly competitive war for talent that exists, especially in the low-skilled and semi-skilled segments of the workforce,” he said.
Gooding added that wage growth for temporary associates was the single biggest driver of the company’s revenue growth.
“We saw wages grow more than 6% on the year, mostly in the lower-income wage earners,” he said.
The 2017 Tax Cuts and Jobs Act is credited with motivating companies to pay higher wages and give bonuses, but others argue the corporate tax savings will also be directed toward rewarding investors. It’s likely the funds will be spent on paying down debt and share buybacks, according to a statement last month by Moody’s Investors Service.
Wilson said the key will be educating clients on how a wage increase will help keep companies competitive when trying to scoop up talent.
“We’re only now getting to the point where they understand that holding out and waiting for it to blow over is not happening,” she said. “There has to be some wage increases to compete with other folks looking for the same talent. We’ve been able to provide analytics showing them what that looks like and how they need to compete.”
