Demand Labor Segment Continues to Lead Staffing Industry
The $100 billion staffing industry in the United States has prospered as a result of the Great Recession. Due to economic uncertainty, employers are hesitant to hire full-time workers. There has been a greater demand for project employees from demand labor companies like TrueBlue, Labor SMART and ManpowerGroup. As a result, earnings have soared for the sector.
That can certainly be seen in the companies' performances.
For 2013, ManpowerGroup is up more than 90 percent. Over the same period, TrueBlue has surged nearly 60 percent. By contrast, Paychex (NYSE: PAYX), the largest entity by market capitalization in the staffing industry that specializes in back office services, has increased by just over 40 percent for the year.
Labor SMART continues to register record revenues.
For the third quarter, revenues increased from the previous year by 148 percent to more than $5.3 million. The market capitalization for Labor SMART is just $5.3 million. The revenues for 2013 will be about twice the market capitalization for the country.
In addition to the recession the Affordable Care Act, or ObamaCare, makes the demand labor sector even more promising.
ObamaCare requires that companies with more than 50 workers provide very expensive health insurance to those working more than 30 hours a week. More and more companies are switching to temporary workers. That will increase when that provision takes effect at the end of 2014. That will increase the need for the goods and services of firms in the staffing sector.
The growth in the demand labor sector should continue. It has certainly been a strong year for ManpowerGroup, TrueBlue, and Labor SMART.
With ObamaCare coming full force for businesses next, the need should increase for what the demand labor group has provided that has so rewarded its shareholders in 2013.
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