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What is the TAM for Software Engineer recruiting/staffing (aka companies/products that are used to help with hiring and staffing) in USA?
EXECUTIVE SUMMARY
In spite of extensive searching, I did not find any pre-compiled data on the TAM (total addressable market) for software engineer recruiting and staffing companies, products and services in the US. However, I was able to calculate rough estimates of the market sizes in US dollars for software engineer staffing/recruiting agencies, freelancing websites (gig economy, crowdsourcing) and job boards.
A 2016 report from Monster reported that 12% of the jobs available in the US are in the technology sector, and of those, 31% are for software engineers. Using these statistics and other industry data, I calculated the three market sizes mentioned earlier and added them together, resulting in an estimated TAM of $31.8 billion. The calculated market sizes for the software engineering staffing/recruiting agencies, freelancing websites and job boards are $5.2 billion, $26.4 billion and $0.2 billion, respectively.
FINDINGS
One of the challenges of this project was that the job title of software engineer is a general term that can refer to another 25 job titles including Java developer, web developer, application developer, front end developer, user interface developer, systems engineer, application engineer and web designer. It was difficult to tell for much of the information I found, how many of these other job titles were included under the umbrella of software engineer. Also, there seems to be confusion about the differences between software engineers and software developers in much of the material I read. Because of this, I carefully chose the data that I wanted to work with.
After extensive searching through information from trusted media sites, government data and reports, company websites, and expert opinions I was not able to find any pre-compiled estimates of the TAM size of software engineer recruiting and staffing companies/products/services in the US. This includes any TAM estimates that dealt exclusively to the recruiting and staffing of software engineers.
So, I backed up and asked the broader question, “What are the main companies/products/services used in staffing and recruiting overall?” Based on search results, I identified these as staffing/recruiting agencies, freelancing websites (gig economy, crowdsourcing) and job boards (including social media). From here, I found a comprehensive 2016 report from Monster titled “Software Engineers US Market Overview.” Although it does not address how software engineers find their jobs, it does say that 12% of the jobs available in the US are in the technology sector and of those, 31% are software engineer jobs. The next step was to find the market size in US dollars for staffing/recruiting agencies, freelancing websites and job boards.
STAFFING/RECRUITING AGENCIES
According to September 2017 data from Staffing Industry Analysts, the market size for US staffing in 2017 is projected to be $140.7 billion, which includes temporary staffing as well as place and search. Using the statistics from the Monster report, we can calculate a rough estimate of the market size for staffing and recruiting of software engineers.
The data in the Staffing Industry Analysts report also projects the staffing/recruiting market will reach $145.1 billion in 2018. I used the 2017 data above for further calculations, but I wanted to include the 2018 data in the hopes that it is helpful for your project.
FREELANCING WEBSITES
Staffing Industry Analysts say that the gig economy consists of independent contractors, temporary agency workers, SOW (statement of work) consultants, the human cloud and other temporary workers. According to the PYMNTS Gig Economy Index, US gig employees are expected to ear over $711.0 billion in 2017. Using the percentages from the Monster report, we can roughly estimate the market size of software engineers on freelancing websites.
JOB BOARDS
An October 2017 article by Staffing Industry Analysts says there are six business models for job boards that are included in their data: “Standard job boards, job aggregators, online classifieds, social media job sites, community sites and programmatic job advertising/job distributors.” The article goes on to say that the size of the global job board market in 2016 was $12.4 billion with the top 5 companies being Recruit, LinkedIn, SEEK, CareerBuilder and Monster. Data from IBISWorld estimates the US job board market size as $4.0 billion in 2017, having grown 14.6% for the period from 2012 to 2017. From this information and the statistics from the Monster report, we can estimate the market size for software engineers on job boards in the US.
ESTIMATED TOTAL ADDRESSABLE MARKET
Here are the three market sizes and the resulting TAM estimate:
Staffing and Recruiting Agencies = $5.2 billion
Freelancing Websites = $26.4 billion
Job Boards = $0.2 billion
TAM = $31.8 billion
CONCLUSION
To summarize, the calculated TAM for software engineer recruiting and staffing companies, products and services in the US is approximately $31.8 billion and is primarily composed of staffing and recruiting agencies, freelancing websites and job boards.