Staffing agencies have been putting people to work for hundreds of years. Work gives people the dignity to take care of themselves and their families, while also gaining experience and new skills. Helping people find work is a vital job that enriches society for both clients and employees. It’s even better when, unlike a headhunter, it’s at no cost to the person who needs a job. But when did it all start? Where did this idea come from? We’re going to expose the real origins of how the staffing industry started.
Employment Agencies Were Originally British
According to Tomas Martinez’s book, “The Human Marketplace: An Examination of Private Employment Agencies“, the idea originated in England in 1650. That’s when the English merchant and writer Henry Robinson proposed for Parliament to open an “Office of Addresses and Encounters”, that would link employees to workers. The British Parliament wasn’t interested, but Henry did open the business himself privately. Unfortunately, it was short-lived. (For comparison, America at this time is only a handful of colonies.)
The idea of a staffing agency survived. The next known one, “Gabbitas and Thring”, was established in 1873 and primarily recruited schoolmasters for public schools in England. In 1890, the Mrs. A.E. Johnson Employment Agency was formed to hire lady’s maids, parlor maids, and footmen for the upper class and were associated with Roosevelt, Carnegie, Rockefeller, and Ford.
Staffing for a Need
Staffing agencies have also helped people get back to work after a disaster. According to the book The Professional Recruiter’s Handbook: Delivering Excellence in Recruitment Practice, one of the oldest staffing agencies in the United States was developed by Katherine Felton in response to the 1906 San Francisco earthquake and fire. While there are records of at least three staffing agencies from roughly the same era, the industry didn’t take off as a country-wide phenomenon until much later.
As part of the recovery from the Great Depression, the New Deal federal program included employment services. The original legislation was called the Wagner-Peyser Act of 1933, and the more modern update happened in 1998 and was established as the Workforce Investment Act. It is government programs like this that normalized going to a staffing agency, allowing clients to meet the demand for skilled workers.
How World War II Changed the Industry
The largest growth in the staffing industry came during World War ll when factory owners saw their workforce leave for the war. After the war was over, large corporations were growing steadily with the return of the American consumer. Both of these factors led to a huge demand for employees, which in turn led to more agencies.
Rise of the “Semi-Permanent Employee”
During the 1960s and 1970s, there was a rise in the “semi-permanent” employees (what we now call temporary or contract employees) from “temporary help firms” to help with short-term assignments or fill the jobs when permanent employees took time off. While the previous era had been hiring for mainly “blue-collar jobs”, the industry now expands to include engineering, accounting, and other professions.
Kinds of Agencies
Each staffing agency differs in what industry they recruit for. The most popular industries include manufacturing, office work (clerical and administrative), managerial, engineering, I.T., scientific, finance, and healthcare. There are agencies that specialize in traveling nurses and technicians, placing people where they’re needed all over the world. While niche agencies may appear to be a good choice, there are downsides. The companies that only handle specific niches, such as I.T., lack the ability to branch out or help those who may want to change careers.
Often the federal government will have contracts that require more workers, so some positions require secret clearance or specific certifications. These positions can be for the federal, local, or state government. For those agencies that can handle the tedious process, landing a government contract is worthwhile and lucrative.
How Many Staffing Agencies are in the United States?
There are over 20,000 staffing companies in the United States alone. Those companies are operating over 39,000 offices in this country alone. According to the American Staffing Association, there are around three million employees on average are working through a staffing agency in the United States. In one year, staffing and temp agencies hire 16 million temporary and contract workers, with the majority of them working full time (73%, according to the ASA.) 6 out of 10 of these workers are taking the job to fill the gap between other jobs or to help them land a permanent job.
Who Works There?
Who are these people who work there? Working inside a contract agency requires the ability to multi-task and stay organized! Handling applicants coming in often means interrupting your own work to help someone else. Making sure that everyone knows all the details of their next interview or the first day of work requires having an excellent system. It’s essential that anyone applying for work knows that the person they’re talking to is reliable, adaptable, and trustworthy.
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Current State of Staffing
According to Staffing Industry Analyst (SIA), the global staffing revenue for 2019 was $498 billion. The European staffing market alone was $206 billion. This is a $174B industry in the United States and one of the fastest-growing industries in B2B services. There are over 20,000 staffing companies in the United States alone, and 39,000 offices.
While, like all industries, the coronavirus changed the industry, it will recover. Some sections, like healthcare, boomed during this time. Millions of people lost their jobs or were furloughed while essential workers were in high demand. Companies that have gone remote may stay that way and flexible work is expected to remain a common perk.
Jobs requiring close proximity to their clientele have changed the most. According to the McKinsey study titled “The Future of Work After Covid-19“, e-commerce has grown between two to five times before 2020. Consumers now have made a habit of shopping online, giving retail stores more difficulty to entice shoppers to visit in-person. Online telehealth appointments grew more than tenfold between April and November. The industries with the most personal interactions will be the most permanently transformed going forward.
The long-term effects of those companies required to close due to an outbreak have led to a stronger push for automation. Positions requiring lower entry requirements may replace employees with robots in places such as warehouses, call centers, and manufacturing plants.
According to the McKinsey study, 1 out of every 16 people will need to find an entirely new industry to work in. They will need to find ways to stand out against the newly intense competition for the jobs remaining. Staffing agencies will be that difference and inside connection.
Due to these many factors, the demand for using an employment agency has never been higher. With positions from entry-level clerical positions to experienced engineers, there are new careers available to everyone.
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