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February 2018

Staffing

Sectorwatch

With U.S. unemployment near sitting near 4% and the economy still growing, the relationship between supply and demand for workers will be a key factor for staffing firms. Higher churn rates may lead to higher placement activity, as employees seek more lucrative opportunities, but a tighter labor market will put some constraints on talent supply. Additionally, general uncertainty surrounding government regulations, reforms, and immigration may lead companies to look towards temporary staffing solutions in the near-term.

Industry Trends:

• Current revenue growth rate exceeds the average of the last 3 years, indicating that market momentum is increasing
• Current gross profit margin is less than the average of the last 3 years gross profit margins, indicating customer pricing power
• Current EBITDA margin is less than the average of the last 3 years EBITDA margins, which may signal further consolidation