Infrastructure and services (4 of 4)

Staffing and outsourcing

About 7 minutes to read in full, or 1 minute for the short version belowFacts checked 1 October 2026

In one minute

Firms supply temporary workers, find permanent hires, run whole processes such as customer service for clients, or connect clients with freelancers online.

The big idea: These firms sell other people's work, so most of their revenue is the workers' pay passing through. A temp agency lives on the spread between the bill rate and the cost of the worker, keeping about 3 cents in the euro, while an outsourcing firm's margin depends on how many paid hours it can bill. Both are now being reshaped by a long hiring slowdown, AI that answers customers, and new rules for gig work.

One unit, in numbers: One temporary warehouse worker for a 40-hour week: USD 1,200 comes in, and USD 40.4 (3.4%) is left after its own costs.What is left is the unit's contribution, before the costs of the whole company. See the worked example
Typical margin: About 3 percent EBITA for staffing agencies; about 15 percent for large contact centre groupsRoughly how much of every 100 of sales (or income) is left as profit after the running costs. More on margin
Capital intensity: LowLittle money is tied up in buildings, machines or stock, so growing is cheap. More on capital intensity
The number to watch: Bill rate and pay rateWhat the client pays per hour, and what the worker earns per hour.

Ask this first in a case

Which business are we in: temp staffing, permanent recruitment, outsourcing or a platform?

Words used above (4)

Bill rate:: What the client pays per hour for a temporary worker.
Pay rate:: What the temporary worker earns per hour.
Spread:: The gap between the bill rate and the full cost of the worker.
Contact centre:: A site where agents answer customers by phone, chat and email.

The industry's other words are explained in Words to know (12).

On this page (17 sections)

How money is made

Temp agencies bill the client an hourly rate above the worker's pay and employer costs, and keep the spread.
Recruiters charge a fee per permanent hire, often a share of first-year salary, or a retainer for executive search.
Outsourcing firms charge per agent hour, per transaction or per outcome, under contracts of several years.
Recruitment process outsourcing firms run a client's whole hiring team for a fee.
Online work platforms keep a share of each payment (the take rate) and sell subscriptions and ads.
Job boards charge employers to post jobs and promote them to candidates.

Worked example: one unit

Unit economics means the money in and out for one unit of the business. Start from the revenue, take away the unit's own costs, and what is left is its contribution. More on unit economics

The unit: One temporary warehouse worker for a 40-hour week (USD 30 bill rate, USD 20.50 pay). Illustrative, rounded figures.
Line	Amount	ShareShare of revenue
Bill rate: 40 hours x USD 30	USD 1,200	100%
Minus Worker's pay: 40 hours x USD 20.50	USD 820	68%
Minus Employer taxes, insurance and benefits (18 percent of pay)	USD 148	12%
Minus Recruiters, branch, sales and systems (16 percent of revenue)	USD 192	16%
What is left (contribution)	USD 40.4	3.4%

Check: USD 1,200 minus USD 1,160 of costs leaves USD 40.4.

So what: The agency keeps USD 40.40, about 3 percent of what the client pays. A 3 percent cut in the bill rate removes USD 36 and almost all of that profit, so the spread over the worker's cost and the hours billed are the levers that matter.

Key measures(8)

Key measures (also called KPIs, key performance indicators) are the numbers people in this industry track. Ask for the first one or two early in a case.

Bill rate and pay rate
What the client pays per hour, and what the worker earns per hour.
Gross margin
Gross profit (revenue minus pay and employer costs) as a share of revenue. Glossary: Gross margin
Typical: About 19.2 percent at the Adecco Group in 2025[3]
Conversion ratio
Operating profit as a share of gross profit: how much survives branch and staff costs.
Permanent placement fees
Fees from permanent hires, the highest-margin and most cyclical income.
Typical: Often about 15 to 25 percent of first-year salary (a recruiters' rule of thumb)[17]
Fill rate and time to fill
The share of client orders filled, and how fast.
Billable share of paid hours
In outsourcing, the hours the client pays for as a share of the hours agents are paid.
Agent attrition
The share of agents who leave each year, which drives recruiting and training costs.
Take rate
The share of each payment a work platform keeps. Glossary: Take rate

First questions to ask

When a case lands in this industry, these questions get you to the numbers that matter.

Which business are we in: temp staffing, permanent recruitment, outsourcing or a platform?
How does the client pay: per hour, per placement, per transaction or per outcome?
What is the spread or margin by service, and how have bill rates, pay and employer costs moved?
How many paid hours are billed, and how has volume moved with the hiring cycle or automation?
What rules on employment status, minimum wages or local hiring apply?

Value chain: where the margin sits

The value chain is the steps a product or service passes through, from the first supplier to the customer. Each step below shows how much of the value it keeps. More on value chains

Step 1: Win the client: tenders, framework contracts and sales
Margin varies
Sales teams at agencies and outsourcing firms
Step 2: Find and check workers: sourcing, interviews, background and right-to-work checks
Medium margin
Recruiters, job boards such as Indeed and Naukri, and shift apps
Job boards earn high margins selling ads to employers.
Step 3: Employ and pay temporary workers, and bill the client per hour
Thin margin
Randstad, Adecco, ManpowerGroup, Recruit, TeamLease, Saudi Manpower Solutions
About 17 to 19 percent gross margin and about 3 percent operating margin at the large agencies in 2025.
Step 4: Place permanent hires for a fee
Fat margin
Recruitment firms such as Hays, PageGroup and Robert Half, and executive search firms
A placement fee has almost no cost of goods, so it is nearly all gross profit.
Step 5: Run whole processes: customer service, claims, payroll, content checks
Medium margin
Teleperformance, Concentrix, Genpact, Capgemini (with WNS), TaskUs, Firstsource
Teleperformance kept a 14.6 percent EBITA margin in 2025.
Step 6: Connect clients and freelancers online, taking a cut of each payment
Margin varies
Upwork, Fiverr, Malt, and shift apps run by agencies

Profit pool: who keeps the money

Where in the value chain the profit ends up, which is often not where most of the sales are. More on profit pools

The richest profit sits in fees with almost no cost of goods: permanent placements, executive search, job board ads and platform take rates, though these swing hardest with the hiring cycle. Temp staffing earns thin, steady spreads on huge volumes, and outsourcing earns middling margins that depend on full centres and on who keeps the saving when AI does the work.

Cost structure(4)

The main costs, each as a share of revenue (the money from sales).

Pay and employer costs of temporary workers: About 81 percent of revenue at the Adecco Group (gross margin 19.2 percent)[3]
Branches, recruiters, sales and head office: About 16 percent of revenue at the Adecco Group[3]
Operating profit left (EBITA) at a staffing agency: About 3 percent at the Adecco Group and Randstad[2]
Operating profit left (EBITA) at a contact centre group: About 14.6 percent at Teleperformance[6]

Benchmarks(5)

Typical figures for the industry, to check a client's numbers against.

Underlying EBITA margin, Randstad (2025): 3.1 percent on EUR 23.1 billion of revenue[2]
Gross margin and EBITA margin, Adecco Group (2025): 19.2 percent and 3.0 percent excluding one-offs[3]
EBITA margin, Teleperformance (2025): 14.6 percent on EUR 10.2 billion of revenue[6]
US temporary help employment (August 2026): About 2.52 million, about a fifth below the March 2022 peak[9]
Philippine IT and business process export revenue: About USD 38 billion in 2024, about USD 40 billion expected for 2025, a target of USD 42 billion for 2026[11]

Typical cases(6)

Case prompts you might hear in this industry.

A staffing agency's profit halved while revenue fell only 5 percent. Why?
How should a Philippine contact centre firm respond to clients adopting AI?
Should a European staffing firm enter Saudi Arabia?
Should a staffing firm build its own shift app?
A client wants to cut its outsourcing bill by 20 percent. What are the options?
A client asks for a 3 percent lower bill rate on a large contract. Should we agree?

Common traps(5)

Mistakes candidates make in this industry, and what to do instead.

Reading revenue growth as success when most of it is workers' pay passing through.
Forgetting employer taxes and minimum wage rises, which squeeze the same spread from the cost side.
Treating AI only as a cost saving when hourly pricing turns it into lost revenue.
Ignoring rules on employment status for gig workers, which can change a platform's costs overnight.
Reaching for a generic framework instead of the real driver of this industry. Instead, write profit as the spread over the worker's cost times the hours billed, minus branch and site costs, and ask which part moved.

What changed, 2024 to 2026(6)

Recent changes a case could turn on.

A long hiring slowdown: in revised Bureau of Labor Statistics data, US temporary help employment was below its level a year earlier for 43 months in a row, from November 2022 to May 2026, the longest such run since the series began in 1990, before rising on a year earlier from June 2026.[10]
Agencies shrank and permanent hiring fell: Randstad's revenue fell 2 percent organically in the fourth quarter of 2025, and ManpowerGroup's gross profit fell 2.9 percent in 2025, hit by lower permanent recruitment and a shift to large clients on thinner margins.[4]
Shift apps moved inside the agencies: Randstad's digital marketplaces earn about EUR 4 billion of yearly revenue, with 1.4 million shifts booked by workers themselves in the fourth quarter of 2025.[1]
AI reached the contact centre: Klarna said in 2024 its AI assistant did the equivalent work of 700 full-time agents (a company claim); Teleperformance grew 1.3 percent like-for-like in 2025 and guided 0 to 2 percent for 2026, and Capgemini bought WNS for USD 3.3 billion in October 2025 to build AI-run operations.[6]
Gig work got rules: the EU Platform Work Directive must be in national law by 2 December 2026, and India's labour codes, in force from 21 November 2025, make aggregators pay 1 to 2 percent of annual turnover, capped at 5 percent of what they pay gig and platform workers, into a social security fund for those workers.[14]
Offshore and Gulf demand kept growing: Philippine IT and business process exports were expected to reach about USD 40 billion in 2025, and Saudi Manpower Solutions' revenue rose 10.7 percent to SAR 2.1 billion.[11]

Players by region(6)

Well-known companies in each region. You do not need to learn them by heart; they help you picture the market.

Global: Randstad
Adecco Group
ManpowerGroup
Recruit Holdings (Indeed, Glassdoor and staffing)
Teleperformance (TP)
Concentrix
Genpact
Upwork and Fiverr
Europe: Randstad (Netherlands)
Adecco (Switzerland)
Hays and PageGroup (UK)
Gi Group (Italy)
Malt (freelance platform)
Middle East: Saudi Manpower Solutions (SMASCO)
Maharah (Saudi Arabia)
TASC Outsourcing (UAE)
Global agencies' Gulf offices
India: TeamLease
Quess Corp
Info Edge (Naukri)
Genpact
WNS (part of Capgemini)
Firstsource
Southeast Asia: PERSOL (formerly PERSOLKELLY)
JobStreet (SEEK)
Philippine centres of Concentrix, TaskUs, Teleperformance and Alorica
United States: Robert Half
Kelly
AMN Healthcare (nurse staffing)
TrueBlue
Instawork and Wonolo (shift apps)

Words to know(12)

Linked words have a fuller entry in the glossary.

Bill rate: What the client pays per hour for a temporary worker.
Pay rate: What the temporary worker earns per hour.
Markup (glossary entry): The bill rate above the pay rate, as a share of the pay rate.
Spread: The gap between the bill rate and the full cost of the worker.
Permanent placement: Finding a permanent employee for a client, for a one-off fee.
RPO: Recruitment process outsourcing: running a client's hiring for a fee.
BPO: Business process outsourcing: running a whole process such as customer service for a client.
Contact centre: A site where agents answer customers by phone, chat and email.
Attrition: The share of workers who leave each year.
Take rate (glossary entry): The share of each payment a platform keeps.
Gig worker: Someone paid per task or shift through an app rather than as an employee.
Employer of record: The company legally employing a worker, which pays wages and employer taxes.

Business model patterns

The ways of making money this industry follows. Spot the pattern in a new industry and you already know the first questions to ask.

Sources(18)

Facts checked on 1 October 2026. Worked examples are illustrative, shaped by these sources rather than one company's figures.

Go deeper and practise

Go deeper

The full lessons behind this brief, with sources and worked cases.

Practise it

Same pattern elsewhere

Industries that make money in a similar way. What you learned here carries over.

Spotted something wrong or out of date? Report a mistake. We check every report and correct the page.