Market Size for Employment agency in 2026 [Example]

The Total Available Market (TAM) for employment agencies can be calculated by looking at the global labor force. As of 2023, there are approximately 1.5 billion people employed worldwide. Assuming that around 10% of these individuals may seek assistance from employment agencies on a yearly basis, this results in roughly 150 million potential service-seekers. If we estimate that the average expenditure on employment agency services per individual is $800 annually, this gives us a TAM of 150 million x $800 = $120B per year.

This figure encompasses all potential users across various demographics, including those seeking temporary, part-time, and full-time employment across different regions globally. For a comprehensive understanding of the market, this calculation also considers industries that commonly utilize employment agencies to fulfill their recruitment needs, such as healthcare, technology, and hospitality.

The Serviceable Addressable Market (SAM) is a more focused subset of the TAM. Considering the limitations set by the specific services offered by your employment agency, the geographical focus on developed countries, and your current business capacity, we will assume that you could realistically serve about 5% of the TAM. As a result, the potential customer base would be approximately 7.5 million people.

To narrow this down further, let’s estimate your agency would attract around 10% of these individuals due to factors like brand recognition and the quality of service offered, resulting in a potential customer count of approximately 750,000 people. This gives a SAM of about 750,000 x $800 spent annually on services, leading to $6B per year.

The Serviceable Obtainable Market (SOM) accounts for the actual market share you could realistically capture in the first year. Given that capturing 1% of the SAM may be overly ambitious for a small agency just starting, a conservative estimate would suggest that you could acquire about 0.1% of your SAM in your first year, which translates to around 750 people.

Multiplying this by the estimated annual spending of $800 per individual leads to an annual revenue of approximately $600,000. This figure reflects a realistic approach for a novice agency entering the competitive employment agency market, focusing on relationship-building and gradual growth through effective networking and marketing strategies.