Professional and Business Services: A Varied and Growing SectorJanuary 4, 2023
Professional and business services employ a quarter of a million Oregonians. This large, multifaceted super sector branches into three main sectors: (1) professional, scientific, and technical services; (2) management of companies and enterprises; and (3) administrative and support and waste management. It can be hard to capture the entirety of the super sector in this short piece, but more information on the employment and wages of the industries in professional and business services can be found at our website QualityInfo.org.
A Large Sector with Significant Employment
Professional and business services had 28,590 firms in 2021 which employed 250,006 workers. This makes up about 16% of the state’s private employment for the year.
The largest sector in 2021 was professional and technical services with 19,123 firms that employed 103,546 workers. Within this sector, jobs are distributed among 28 different industries. Some industries include law offices, architectural services, laboratory testing, computer systems design, environmental consulting agencies, photography services, and veterinary services. These industries account for 41% of the super sector’s employment. The largest industries were computer systems design and related services with 17,007 workers, accounting and bookkeeping services with 12,047 workers, engineering services with 11,504 workers, and law offices with 10,884 workers. Management consulting services had the largest employment gains from 2020 to 2021, adding 1,099 jobs (+11%).
The second largest sector was administrative and waste management services with 8,060 firms that employed 98,558 workers. This sector includes more than 25 industries. Some industries include call centers, temporary help services, credit bureau agencies, travel agencies, landscaping services, and waste treatment/disposal. These industries account for 39% of the super sector’s employment. The largest industries were temporary help services with 32,391 workers, landscaping services with 11,784 workers, and janitorial services with 10,668 workers. Temporary help services added 2,998 jobs (+10%) from 2020 to 2021, while telephone call centers lost 1,350 jobs (-14%).
Lastly, management of companies and enterprises accounts for the smallest share of professional and business services employment with 1,407 firms that employed 47,902 workers. This sector holds a broad array of occupations that all share responsibilities like oversight and managing of establishments. These account for the remaining 20% of employment in the super sector. Management of companies lost 953 jobs (-2%) from 2020 to 2021.
There were 186 government entities in 2021 employing 6,454 workers, a relatively small piece of the employment pie for professional and business services. The public-sector jobs are also very diverse. Some prominent jobs are engineering, landscape services, computer systems design, and janitorial services.
Employment Growing Over Time
Professional and business services in Oregon has seen continuous growth since the early 1990s, declining only for short periods during economic recessions.
The decade from 1990 to 2000 was the longest period of employment growth in Oregon history, up to that point. This was also true for professional and business services, which as a whole added 83,300 jobs (+80%) compared with Oregon’s private-sector growth of 31%. During this decade, professional and business services accounted for 26% of the state’s employment growth.
A series of subsequent shocks to the economy brought a mild economic downturn at the start of the 2000s. The decline in economic activity felt within this sector was most likely due to the Dotcom crash, a correction in the high-tech industry. From 2000 to 2003 professional and business services employment lost about 12,000 jobs (-6.4%) while private-sector employment decreased only 3%. Computer systems design and related services lost 3,500 jobs (-30%). Some industries did grow, and business support services such as telephone call centers experienced growth, adding 3,100 jobs (+29%) from 2001 to 2003.
From 2004 to 2007, professional and business services added 21,900 jobs (+12%). All major sectors within the super sector gained jobs during this time and notably, management of firms added 4,800 jobs (+17%). Administrative and support services added the most jobs over this period, increasing employment by 8,000 (+10%).
The Great Recession introduced turmoil to the general economy and from 2007 to 2009, professional and business services dropped 16,000 jobs (-8.2%). The professional and technical sector dipped relatively less during the recession because industries such as computer systems and design actually gained 600 jobs over the period. Management of companies also added about 1,700 jobs (+5%) from 2007 to 2010. The largest loss came from the volatile temporary help industry, which lost 14,800 jobs (-35%) between 2006 and 2009. The temporary help industry also helped the overall super sector start to recover earlier from the recession, making it a leading indicator. It wasn’t until 2013 that professional and business services was at pre-Great Recession employment levels.
Following the Great Recession, there was a period of strong economic expansion from 2010 to 2019. Professional and business services employment added 65,600 jobs growing at an average rate of 3.2% for nine years. This compares with Oregon’s private payroll that increased by an average of 2.3% annually during that period.
Professional and technical services added 28,700 jobs (+40%). Within that sector, one industry in particular fueling job growth was computer systems design and related services which added 7,200 jobs (+73%). Next was administrative and support services which added 21,500 jobs (+26%), with temporary help services contributing 7,824 of those 21,500 jobs. Management of companies and enterprises increased payroll by 15,400 (+44%) during those nine years, although some of that growth is from redefining companies into the industry.
The last year of major employment growth before the COVID-19 pandemic was 2019. The uncertainty in the early stages of the pandemic brought unprecedented layoffs and plummeting employment levels. With the majority of non-essential business coming to a halt, Oregon’s private payroll shed 238,400 jobs (-17%) from March to April of 2020 while professional and business services lost 18,700 jobs (-8%) in that month.
Certain sectors fared somewhat better than others in the midst of COVID-19. The four years selected in the graph above speak for major periods throughout the pandemic. The second quarter of 2019 represents pre-pandemic times, the second quarter of 2020 represents the major lockdown period and overall freeze the economy felt, the second quarter of 2021 largely represents a recovery phase for employment, and the second quarter of 2022 represents the most recent data there is coming out of the pandemic.
Professional and technical services was able to regain employment the fastest out of the three sectors. By the beginning of 2021, it had surpassed pre-pandemic employment levels. The sector lost 1,140 jobs (-1%) from 2019 to 2020 but bounced back the year after to gain 4,924 jobs (+5%) from 2020 to 2021. One reason for the swift recovery may be because these industries had the capability to work remotely. Despite that, there was still employment movement at the industry level. Services related to advertising took the biggest hit, losing 568 jobs (-42%) from 2019 to 2020. Business operation services like accounting, bookkeeping, and payroll services lost 225 jobs (-2%) from 2019 to 2021 but rebounded the following year adding 1,018 jobs (+9%). Research and development in physical engineering added 917 jobs (+20%) from 2019 to 2021.
The administrative and waste services sector took the biggest hit. Many frontline jobs in this sector cannot be done remotely and most of those industries were negatively affected by COVID-19 restrictions. As a consequence, this sector lost 8,580 jobs (-8%) from 2019 to 2020. Temporary help services took a majority of the hit, losing 6,192 jobs (-17%) from 2019 to 2020. Travel agencies, tour operators, and convention and trade show organizers all took big losses as well. Professional employer organizations added 348 jobs (+9%). Services to buildings and dwellings added 800 jobs (+3%), which may be because home improvement activity increased during COVID-19. It wasn’t until early 2022 that administrative and waste services surpassed its second quarter 2019 employment level.
Management of companies and enterprises lost 2,400 jobs (-8%). Although it was not the hardest hit sector, it did take the longest to recover. It was not until October of 2022 that this sector surpassed pre-pandemic employment levels.
The labor market took 80 months to recover from job losses during the Great Recession in 2007 to 2009, compared with the 28 months it took to recover from the COVID-19 pandemic. The employment recovery that played out after spring 2020 has been rapid considering job losses were greater in March 2020 than the Great Recession job losses.
Differences in the Sector’s Industry Mix Determine Wages
The professional and business services super sector is so varied that different geographies have different industry mixes within it. Areas with a high proportion of employment in the higher-paying professional and technical and management of companies industries will have relatively higher average wages while those that have a high proportion in industries such as call centers, temporary help firms, and laborious services such as waste disposal or landscaping services will have relatively lower wages.
More urban counties like Washington and Multnomah have large shares of employment in professional and technical industries and company headquarters with high annual average wages. However, some nonurban counties have high wages within the super sector. Hood River has a relatively large share of employment in engineering and Gilliam has employment in management of companies and waste remediation. Other rural counties that have employment in a company headquarters can have high wages within professional and business services.
Professional and business services is expected to continue adding jobs into the future. The Oregon Employment Department projects the super sector will add 45,800 jobs (+19%) from 2020 to 2030. At the industry level, employment services is expected to add the most jobs at 8,600 and had the second fastest growth rate of 24%. Computer systems design and related services had the fastest projected growth rate of 25% (+4,100 jobs).