Temporary Help Services (United States) — NAICS 56132

An investor's primer. NAICS = North American Industry Classification System, the federal code set used to define this industry. This is a rollup page for a five-digit NAICS industry that contains only one detailed child, so it is deliberately short and points you to the child primer for full detail.

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1. Overview

NAICS 56132 Temporary Help Services is the five-digit industry covering firms that supply workers to other businesses for limited periods, where the workers are employees of the staffing firm rather than of the client. The staffing agency recruits, hires, pays wages, withholds taxes, carries the workers on its own payroll, and bills the client for hours worked; the client directs the work on site but never puts the worker on its own books.[4]

For an investor the headline is that this is a large, cyclical, low-margin, cash-generative service industry. Owners make money on the spread between what they bill the client and what they pay the worker, net of employment costs, and volume moves ahead of the broader economy — temporary-help employment is a classic leading indicator of hiring and recessions.[8][9] Full treatment of the business model, the public and private companies, regulation, and the outlook lives in the child primer, NAICS 561320.

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2. What's inside — and why this level equals its one child

The five-digit industry 56132 contains exactly one six-digit national industry:

Because there is only one child, 56132 and 561320 are the same industry. The federal system adds the sixth digit only when a five-digit industry splits into finer national detail; here it does not, so the six-digit code simply repeats the five-digit one. Every figure, company, and dynamic on this page is the child's. Read primer 561320 for the full analysis; this page exists only to state the level's own official totals and route you there.

The boundary is worth restating once, because trade-press "staffing" figures often blend it away: 56132 is W-2 temporary staffing only (W-2 is the U.S. tax form for an employee). It excludes recruiters and headhunters who place a worker onto the client's payroll (561311 Employment Placement Agencies, 561312 Executive Search Services), co-employers that administer HR and payroll for a client's existing staff (561330 Professional Employer Organizations, or PEOs), broader facility-staffing (561210), and farm-labor crews (115115).[4]

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3. How big it is (this level's rollup figures)

Because the level equals its one child, its totals are the child's totals. From our ground-truth federal data for NAICS 56132:

Two figures frame the industry. Payroll (~$177B) is a huge share of revenue (~$326B) because most of what an agency bills is passed straight through to worker wages and employment taxes — this is a low-value-add-per-dollar business by design. And the employee count is a point-in-time snapshot of an industry that churns like almost no other: the American Staffing Association (ASA, the industry trade body) estimates about 2.2 million temporary and contract workers were on assignment in an average week of 2024, but roughly 11.2 million different people cycled through staffing jobs over the full year.[6]

Undercount caveat — which here runs the other way. Unlike industries dominated by tiny cash operators or by government, temporary help is well captured by federal data, because the employers are formal businesses running real W-2 payrolls — exactly what the Census Bureau and Bureau of Labor Statistics (BLS) count best.[1] Two quirks remain. First, a temp is counted in this industry even though he or she physically works at a manufacturing, retail, warehouse, or hospital client, so 56132 pulls employment out of the industries where the work is actually done.[1] Second, the code captures only the slice of flexible labor that flows through W-2 temp agencies; it excludes PEO arrangements (561330), independent contractors, and gig platforms, so it understates the true size of America's contingent-work economy. Note also that a private trade estimate (Staffing Industry Analysts, or SIA, put the total U.S. staffing market near $184 billion in 2024[5]) is lower than the Census receipts figure; the gap reflects different definitions, timing, and which firms are surveyed. Prefer the federal figures above for the industry itself.

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4. The investable universe (where the value sits)

With a single child, all of the industry's value concentrates in 561320 — there is no second sub-industry competing for it. A handful of global staffing companies trade publicly (ManpowerGroup, Robert Half, Kelly, Kforce, AMN Healthcare, Cross Country Healthcare, Korn Ferry, TrueBlue, HireQuest, BGSF, GEE Group; Europe's Randstad and Adecco run large U.S. operations), but the largest single U.S. staffing firm — Allegis Group — is private, as are healthcare leader Aya Healthcare, IT leader Insight Global, and Apollo-owned industrial staffer Employbridge.[7] The industry is highly fragmented — over 16,000 firms, most small, regional, franchised, or private-equity-backed[2] — so private ownership (buying, building, or franchising an agency, or lending to one) is at least as common a route as owning a share. Where the dollars sit within the industry: the higher-skill lanes (information technology, or IT; healthcare; professional) generate far more revenue per worker, while industrial and clerical are about two-thirds of the bodies but under a third of the dollars.[6] Company tickers, revenue, and the full public-versus-private map are in primer 561320, Section 4.

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5. How the money works

The spread is everything. The agency pays a pay rate to the worker and charges a higher bill rate to the client; the difference funds employment costs and profit. Typical markup runs 30–75% of the pay rate (higher for specialties like travel nursing); gross margin averages around 25% but is thin (~15–18%) on commodity industrial labor and richer on IT, professional, and healthcare; and net margin is slim, commonly 3–8%, because branches, recruiters, insurance, bad debt, and technology consume most of the gross.[10] The model is therefore high-volume, low-margin, high-operating-leverage: small moves in volume or in the bill-pay spread swing profit hard. Working capital is the hidden cost — agencies pay workers weekly but collect from clients on 30–60 day terms, so growth consumes cash and balance-sheet strength is a competitive weapon. Full mechanics (permanent-placement conversion fees, managed programs, and the metrics to watch) are in primer 561320, Section 5.

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6. What drives demand

Demand rises when employers need labor faster or more flexibly than they can hire permanently — seasonal peaks, production surges, absences, projects, new facilities, and hard-to-fill technical or clinical roles. It tracks gross domestic product (GDP) and hiring, but leads the broader jobs cycle by roughly 6–12 months, because temps are the marginal unit of labor added first in a recovery and cut first in a slowdown.[8] The most recent cycle shows it plainly: BLS reported temporary-help employment fell by 159,000 jobs in 2024 and by 624,000 from its March 2022 peak through December 2024.[9] The industry's core structural gauge is the penetration rate — temps as a share of total private employment — which sat around 1.56–1.59% in 2025–2026, below the ~2% cyclical peaks, signalling a still-soft market.[8]

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7. Regulation

The defining legal feature is co-employment: because the agency employs the worker but the client directs the work, both can carry employer obligations. The layered rules include federal wage-and-hour law (the Fair Labor Standards Act, or FLSA — minimum wage and overtime after 40 hours),[12] joint safety responsibility under the Occupational Safety and Health Administration (OSHA),[10] an unsettled "joint employer" standard at the National Labor Relations Board (the 2023 expansion was vacated in March 2024, leaving the narrower 2020 rule),[11] and a rising wave of state "equal pay for temps" laws — New Jersey's Temporary Workers' Bill of Rights (2023) and Illinois's amended Day and Temporary Labor Services Act (2023–2024) — that erode the cost advantage of temporary labor and raise compliance burdens.[13][14] The full regulatory map is in primer 561320, Section 7.

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8. Consolidation

The industry is fragmented and unconcentrated. In 2022 the top four firms held about 18.1% of revenue, the top eight ~25.2%, the top twenty ~37.6%, and the top fifty ~48.8%; the Herfindahl-Hirschman Index (HHI, a standard concentration measure where under 1,500 is "unconcentrated") was just 137.7, across 16,340 firms.[2] Barriers to entry are low locally — a recruiter with client relationships and a payroll line can open a branch — but scale matters for national accounts, managed-service mandates, insurance, and technology. Private-equity roll-ups in healthcare, IT, and industrial verticals and public-company tuck-ins are a constant, though integration risk means scale is not a guaranteed advantage. Detail is in primer 561320, Section 8.

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9. Risks

The main risks are the child's: deep cyclicality (revenue can fall double digits in a downturn); thin, fragile margins with little cushion; spread compression when pay rates rise faster than bill rates; working-capital intensity (growth burns cash); client and vertical concentration; regulatory drift as equal-pay and joint-employer rules narrow the cost advantage; legal and safety liability flowing to the agency as the W-2 employer; technological disintermediation by vendor-management systems, direct-sourcing tools, and artificial intelligence; and the trap of confusing revenue with value, since so much of the top line is wage pass-through. For equity holders specifically, several of these stocks are small-cap, illiquid, and cyclical-timing-dependent. See primer 561320, Section 9 for the full list.

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10. How to invest, and the outlook

Because 56132 is 561320, the routes are the child's. Public: the U.S.-listed names (ManpowerGroup, Robert Half, Kelly, AMN Healthcare, Cross Country Healthcare, Korn Ferry, TrueBlue, Kforce, HireQuest, BGSF, GEE Group) or the foreign majors Randstad and Adecco for global exposure with large U.S. operations — cyclical, value-style equities with no dedicated staffing exchange-traded fund.[7] Private — often where the better economics sit: buy, build, or franchise an agency; back a private-equity roll-up of vertical specialists; or lend against staffing receivables (through business development companies or specialty-finance lenders) for a cash-flow-oriented way in without the equity's cyclicality. The industry entered 2025 in a multi-year cyclical trough — penetration below prior peaks,[8] temp employment down through 2024,[9] healthcare bill rates largely normalized — with SIA projecting a return to roughly +3% growth in 2025 and a firmer rebound into 2026.[5] The structural bull case rests on demand for flexible labor and chronic healthcare-worker shortages; the bear case is that AI and direct-sourcing tools automate away both the roles being placed and the recruiting function itself. Full analysis, company-by-company, is in primer 561320, Section 10.

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Sources

1. U.S. Census Bureau, County Business Patterns 2023, NAICS 561320 (payroll, employment, establishments; methodology and coverage). https://www.census.gov/programs-surveys/cbp.html
2. U.S. Census Bureau, 2022 Economic Census — Concentration of Largest Firms, NAICS 561320 (receipts, firm count, CR4/CR8/CR20/CR50, HHI). https://www.census.gov/programs-surveys/economic-census.html
3. U.S. Census Bureau, "2022 NAICS 561320 — Temporary Help Services" (definition and exclusions: 561311, 561312, 561330, 561210, 115115). https://www.census.gov/naics/?details=561320&input=561320&year=2022
4. Staffing Industry Analysts, "US Staffing Industry Forecast" (market ~$184B in 2024; +3% 2025; 2026 rebound), 2025. https://www.staffingindustry.com/research/research-reports/americas
5. American Staffing Association, "Staffing Industry Statistics" (2.2M weekly / 11.2M annual employees; occupational mix), 2025. https://americanstaffing.net/research/fact-sheets-analysis-staffing-industry-trends/staffing-industry-statistics/
6. Staffing Industry Analysts, "Largest US/Global Staffing Firms" (Randstad, Adecco, ManpowerGroup; Allegis, Aya, Insight Global, Employbridge; BGSF), 2025. https://www.staffingindustry.com/news/global-daily-news/allegis-aya-and-insight-global-top-sia-list-of-largest-staffing-firms
7. Federal Reserve Bank of St. Louis (FRED), "All Employees, Temporary Help Services (TEMPHELPS)" and SIA monthly US jobs reports (leading-indicator role; penetration rate ~1.56–1.59%), 2025–2026. https://fred.stlouisfed.org/series/TEMPHELPS
8. U.S. Bureau of Labor Statistics, Monthly Labor Review, "Total Nonfarm Employment Growth Continues to Slow in 2024" (temp-help −159,000 in 2024; −624,000 from March 2022 peak through December 2024), 2025. https://www.bls.gov/opub/mlr/2025/article/total-nonfarm-employment-growth-continues-to-slow-in-2024.htm
9. Industry practitioner sources on staffing economics — Lone Oak Payroll / USA Staffing Services, "Staffing Agency Profit Formula: Bill Rates, Markup & Margin" (markup 30–75%; ~25% gross margin; 3–8% net; direct-hire fees 15–30%; burden rate), 2025–2026. https://www.loneoakpayroll.com/newsitems/staffing-agency-profit-formula-how-to-mark-up-bill-rates/
10. Occupational Safety and Health Administration, "Protecting Temporary Workers" (staffing agency and host jointly responsible). https://www.osha.gov/temporaryworkers
11. Foster Garvey / Congressional Research Service, "NLRB Joint Employer Rule vacated March 2024; 2020 standard in effect," 2024. https://www.foster.com/newsroom-alerts-what-employers-should-know-about-the-NLRBs-new-joint-employer-rule
12. U.S. Department of Labor, "Wages and the Fair Labor Standards Act" and Fact Sheet 13, "Employment Relationship Under the FLSA" (overtime after 40 hours; economic-reality test). https://www.dol.gov/agencies/whd/flsa/
13. Ogletree Deakins / Lexology, "New Jersey Temporary Workers' Bill of Rights" (equal pay for temps; fee caps; certification), 2023. https://ogletree.com/insights-resources/blog-posts/new-jersey-temporary-worker-pay-transparency-law-takes-effect/
14. Jackson Lewis / Illinois Department of Labor, "Illinois Day and Temporary Labor Services Act" (equal pay and benefits after 720 hours in 12 months; injunction lifted 2025), 2023–2025. https://www.jacksonlewis.com/insights/illinois-amends-temp-worker-law-boosting-employer-obligations

For the complete company roster and citation set, see the child primer, NAICS 561320.