AT A GLANCE

  • Mid-market firms comprise only 1% of the total number commmerically active firm, but have led job growth, employing approximatelly 53 million workers and contributing $9.3 trillion to the U.S. economy
  • These companies are increasingly relying on non-employee talent to drive business growth, but the technology to support them is often unafordable or requires long and complex impleentations
  • Some vendor management system (VMS) providers are starting to offer affordable, strong, and scalable solutions to this segment of the market

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July 01, 2017

Think Outside the Box: Innovation for the Mid-Market

While middle market firms comprise only 1% of the total number of commercially active firms, they have led national job growth over the past few years, employing approximately 53 million workers and contributing $9.3 trillion to the U.S. economy. There are nearly 200,000 U.S. middle market businesses that represent one-third of private sector GDP, employing approximately 47.9 million people. These companies are private and public, family owned, and sold proprietorships, geometrically diverse, and span across almost all industries.

The Definition of Middle Market

The U.S. middle market is defined by the National Center for the Middle Market as those businesses with an annual revenue ranging from $10 million to $1 billion, and is divided into three tiers based on the revenue range:

  • Lower Middle Market: $10 million to $50 million
  • Core Middle Market: $50 million to $100 million
  • Upper Middle Market: $100 million to $1 billion

Middle Market Performance in Q1-2017

According to the National Center for the Middle Market, revenue in the middle market in Q1-2017 grew 9.2% over the past 12 months, and is expected to grow at 8.8% over the next 12 months. Just under 60% of middle market companies project positive revenue growth.

Over the past year, middle market hiring grew by 7.5% and is expected to grow by 6% over the next 12 months. And 64% of middle market companies say they plan to consistently invest capital to add jobs, equipment, make acquisitions or train employees.

Middle Market Growth by IndustryMiddle Market Growth by Industry

Source: The National Center for the Middle Market

Innovative Technology Solutions for the Mid-Market

As the data for Q1-2017 shows, mid-market companies have consistent revenues that correlate with them increasing hiring spend and activity. While these companies are increasingly relying upon non-employee talent to drive business growth, the technology (such as vendor management systems) that are typically used to mitigate the complexities of managing and engaging non-employees are often unaffordable or require long and convoluted implementations.

Access to the necessary technology is often a complicated challenge for mid-market firms. Understanding the complex ecosystem of enterprise software, containing costs for new solutions and lacking the resources needed such as IT support has often limited the availability of a vendor management system (VMS) for these companies.

However in the past year, VMS providers have set their sights and put their innovation laboratories to work to provide mid-market firms with a product that gives them an affordable, strong, robust, and scalable solution to manage and engage their extended workforces. According to Elizabeth Rennie, global workforce solutions director for Staffing Industry Analysts (SIA), “Traditionally, external workforce solutions have focused on organizations of more than 10,000 employees representing approximately 63% of the total VMS market size according to Staffing Industry Analysts. However, as contingent workforces grow in size and risk management strategies are applied, mid-market organizations are expected to increasingly look to VMS and MSP solutions.”

 


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