UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

__X__   Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
        Act of 1934 for the fiscal year ended December 29, 1996.

______  Transition  Report  Pursuant  to  Section  13 or 15(d) of the Securities
        Exchange Act of 1934

Commission File Number:  0-26094

                           SOS STAFFING SERVICES, INC.
             (Exact name of Registrant as specified in its charter)

            Utah                                                87-0295503
(State or other jurisdiction of                               I.R.S. Employer
incorporation or organization)                               Identification No.)
 
1415 South Main Street, Salt Lake City, Utah                       84115
  (Address of principal executive offices)                       (Zip Code)

       Registrant's telephone number, including area code: (801) 484-4400

           Securities registered pursuant to Section 12(b) of the Act:
                                                           Name of each exchange
       Title of each class                                 on which registered__
               None                                                 None

           Securities registered pursuant to Section 12(g) of the Act:

                          Common stock, $0.01 par value
                                (Title of class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                Yes [ X ] No [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ X ]

The  aggregate  market value of the Common Stock held by  non-affiliates  of the
Registrant,  on March 3, 1997,  based upon the closing sales price of the Common
Stock of $12.125 per share on that date, as reported on the Nasdaq Stock Market,
was approximately  $62,898,195.  Shares of Common Stock held by each officer and
director and by each person who owns 5% or more of the outstanding  Common Stock
have been  excluded in that such  persons may be deemed to be  affiliates.  This
determination of affiliate status is not necessarily a conclusive  determination
for other purposes.

As of March 3, 1997, the Registrant had outstanding  9,037,820  shares of Common
Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE
Portions of the  Registrant's  Annual Report to Shareholders for the fiscal year
ended  December 29, 1996 are  incorporated  by reference into Parts II and IV of
this  Annual  Report  on  Form  10-K.   Portions  of  the  Proxy  Statement  for
Registrant's  1997 Annual  Meeting of  Shareholders  to be held May 14, 1997 are
incorporated by reference in Part III.


<PAGE>


                                     PART I

ITEM 1.  BUSINESS

General

         SOS  Staffing  Services,  Inc.  ("SOS" or the  "Company")  is a leading
independent regional provider of staffing services in the Mountain States (Utah,
Colorado, Arizona, Nevada, Idaho, Wyoming, New Mexico and Montana). In addition,
the Company has recently  expanded its office  network into other western states
(California, Oregon and Texas). SOS, a Utah corporation, began business in 1973,
initially  doing business as SOS  Employment  Services and  subsequently  as SOS
Temporary  Services.  During 1996,  the Company  provided over 56,000  clerical,
light  industrial,   industrial,   information   technology  and  technical  and
professional  temporary  staffing  employees to approximately  8,000 businesses,
professional and service  organizations and government agencies.  In addition to
the  SOS  Staffing  Services(R)  trademark,  the  Company  does  business  under
service-specific  names in various  markets where size permits  diversification,
including Skill Staff  (construction  and  manufacturing  services),  Industrial
Specialists  (warehousing  and  labor  services,  and  trucking),   AccountStaff
(accounting services), SOS Technical Services (engineering,  programming, design
and other technical services),  PAMS (medical  administrative support services),
ServCom Management  Services  (professional  employer  services),  CGS Personnel
(mining,  mineral  exploration and  environmental  professional  services),  The
Performance   Group   (information   technology   services),   Impact   Staffing
(information  technology  services),  and  Wolfe &  Associates  (consulting  and
information  technology  services).  In February 1997 the Company  purchased the
stock of Computer  Group,  Inc.  (CGI) of  Bellevue,  Washington.  CGI  provides
information  technology services.  The Company's network consisted of 87 offices
as of December  29, 1996.  There were 28 offices in  Colorado,  24 in Utah, 9 in
Arizona, 6 in Nevada, 5 in Idaho, 4 in Texas, 3 in Wyoming,  3 in California,  2
in Oregon, 2 in New Mexico and 1 in Montana.

Business Strategy

         SOS seeks to  differentiate  its  services  and  enhance its growth and
profitability through the specific business strategies outlined below:

         Focus on Higher Margin Business.  The Company's operating results since
1991 have been significantly  improved by its strategy to focus on higher margin
business.  The Company has implemented this business  strategy two ways.  First,
the Company has expanded its range of services, in part through acquisitions, to
include  higher  margin  specialty  services  such  as  information  technology,
administrative  staffing  support  services  for  medical  facilities  and other
professional  staffing and consulting services.  The Company intends to continue
to develop its  capability  to provide  qualified  employees to the  information
technology sector, one of the fastest growing segments of the temporary staffing
industry.  Second,  the Company has  continued  its efforts to market  temporary
staffing  services to higher  margin  accounts.  The  Company has  de-emphasized
marketing to accounts where competitive pricing makes margins unacceptable or to
accounts where workers'  compensation costs adversely affect  profitability.  As
part of this continuing  strategy,  managers are trained in flexible  pricing of
services.

         Wide Variety of Services.  The Company's strategy includes offering its
customers a wide variety of temporary  staffing  services,  including  clerical,
light   industrial,   industrial,   construction,   manufacturing,   information
technology and technical and  professional  services.  The Company also provides
related services to its customers including  payrolling,  professional  employer
services,  skill and drug  testing  and risk  management  consulting.  In larger
markets,  the Company offers these services  through  several  separate  offices
operating  under  established  names.  The  Company  also  provides  outsourcing
services to  customers  whereby the Company  contracts  to perform a  particular
business  function  for an  agreed  price  which  includes  providing  staffing,
equipment  and  supplies.  In a limited  number of markets the Company  provides
professional  employer  organization  ("PEO")  services,  which  offers  to  SOS
customers  the benefit of employee  leasing.  The Company is also  expanding its
on-site  services  where SOS  locates  an  on-site  manager to manage all of the
customer's temporary employee staffing  requirements.  The recent acquisition of
Wolfe & Associates allows the Company to provide business strategy,  information
technology   and   telecommunication   consulting   services   and  offer  staff
augmentation services for any follow-on projects.

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<PAGE>
  
       Pursue  Opportunities in Smaller Markets.  Over the last several years,
SOS has  focused on opening hub offices in key  metropolitan  areas  followed by
establishing   offices  in  surrounding   markets.   This  decentralized  office
management strategy locates multiple offices in close proximity to customers and
temporary staff employees.  The Company believes this strategy has allowed it to
rapidly  gain  market  share  with low entry  costs.  Once a hub office has been
established,  the Company  focuses on leveraging hub office  resources to market
and deliver services to surrounding smaller markets. In these markets, which are
often too small to attract competition from national companies,  the Company has
achieved  significant  penetration in relatively short periods and often becomes
the dominant provider of temporary staffing services.

         Provide  Entrepreneurial  Offices  with  Strong  Central  Support.  The
Company's  offices  are  supported  by strong  central  functions  at  corporate
headquarters  which  include  marketing,   recruiting  and  retention  programs,
workers' compensation and other insurance services,  training, accounts payable,
purchasing,  credit,  collection,  legal review and other administrative support
services.  Each  office  has  access to the  Company's  computer  system and its
proprietary  software  which  provides  information  on  customer  requirements,
available  applicants,  temporary  staffing  employees on  assignment  and other
information which facilitates efficient response to customer job orders.

         The Company has established budgets and quality  performance  standards
which are  utilized  at all  offices.  A  substantial  portion of region,  area,
district  and office  manager  compensation  is  incentive-based  and focused on
meeting  budgets and quality  standards.  Managers  are also given  considerable
discretion to respond to specific customer requirements.  Office managers report
to region, area or district managers who typically have responsibility for three
to ten offices.

         Emphasize  Service and Value. The Company focuses on providing  service
and value to its customers.  The Company's staff employees seek to establish and
maintain  long-term  relationships  with  customers by  developing  knowledge of
customers' businesses, responding promptly to customer orders and monitoring job
performance and customer satisfaction. The Company has implemented this strategy
by targeting  customer accounts where service and quality are perceived to be as
important as pricing of services,  which allows the Company to be more selective
and to provide higher quality staffing while maintaining desired profit margins.

         Focus on Risk  Management.  A  significant  component of the  Company's
direct cost of providing services is workers'  compensation expense. The Company
utilizes a comprehensive  workers' compensation  insurance program that includes
aggregate and occurrence  loss caps with full insurance above the loss caps. SOS
utilizes the same insurance carrier to handle claims administration. The Company
has also developed claims avoidance and claims management  procedures  involving
loss control programs, monitoring of safety conditions at customer locations and
policies which prohibit  staffing of high-risk work, such as logging or roofing.
This risk  management  strategy has favorably  impacted rates and contributed to
improvements  in gross profit  margins.  Under the  direction  of the  Company's
professional  risk  manager,  claims are  investigated  and  closely  monitored.
Reserves for claims below the loss cap are established by the Company's  insurer
and supplemented with additional reserves established by the Company.


Growth Strategy

         Management believes the Company has substantial opportunities to expand
the geographic  range of its office network and to broaden the range of services
it offers to its customers.  The Company's growth strategy is to increase sales,
profitability  and market share by increasing  revenues  from existing  offices,
opening  offices in the Mountain  States and other western states and completing
acquisitions in targeted markets and industry segments. Since its initial public
offering  in June 1995,  the  Company  has added a total of 17  offices  through
internal growth and 28 offices through acquisitions,  resulting in 87 offices as
of December 29, 1996.

         Internal  Growth.  The  Company  maintains  an  aggressive  posture  in
increasing  revenues from  existing  offices.  Growth of any specific  office is
restricted  by its  proximity  to clients and by the  availability  of temporary
workers. As offices exceed certain thresholds,  SOS has determined that dividing
such offices into one or more additional offices results in continued growth and

                                       3
<PAGE>

greater recruiting capabilities, market penetration and profitability. Economies
of scale benefit the offices due to common area  management and the spreading of
management and administrative costs over a larger revenue base. A key element of
the  Company's  growth  strategy  is the  establishment  of hub  offices  in key
population  areas  followed by the clustering of additional  offices  (including
offices  providing  specialized  staffing  services) in existing and surrounding
markets.

         The Company  estimates  the capital cost of  establishing  a new office
ranges from $10,000 to $25,000,  exclusive of working capital requirements.  The
Company's new offices have historically achieved  profitability in six to twelve
months  while  offices  created by division  of an  existing  office are usually
profitable from inception. The Company currently operates at least one office in
every major  market in the Mountain  States with a population  base in excess of
100,000. SOS has identified over 40 additional potential office sites in smaller
Mountain States markets,  specialty  office sites in existing markets and office
sites in new markets to which it intends to expand.

         Acquisitions. From the date of its initial public offering, the Company
has completed the  acquisition of 20 staffing  companies in the Mountain  States
and other western states. The Company intends to continue to pursue acquisitions
as a key element of its growth strategy. The Company will target acquisitions in
markets in the western  United  States  where the Company  seeks to establish or
develop staffing  operations,  particularly  acquisitions of specialty providers
such as information technology companies.  The Company will also seek additional
acquisitions  in the consulting  area to augment the Wolfe & Associates  base of
business.  In addition,  the Company  will target major  markets in the Mountain
States where the Company seeks to increase its market share and smaller  markets
in the Mountain  States where SOS does not currently  have offices.  The Company
has  identified  a number  of  potential  acquisition  candidates  that  provide
specialized  staffing  services in the Mountain  States and other western states
for continued expansion. In targeting  acquisitions,  SOS focuses on established
businesses with a history of profitable operations. Acquisition criteria include
the  strength  of an  acquisition  candidate's  operations,  the  quality of its
management,  its market share and its compatibility  with the Company's existing
lines of business. Compatibility may include having lines of business consistent
with those of SOS or specialty  lines of business  that can be expanded  through
the Company's existing office network or compliment  existing lines of business.
Management  believes the Company's  expertise  and  experience  allows  acquired
businesses to be integrated into the Company at relatively low incremental costs
and enables fixed costs to be spread over an increasing base.

Operations

         Offices.  As of December 29, 1996,  the Company  operated 87 offices in
eleven western states,  including 28 in Colorado, 24 in Utah, 9 in Arizona, 6 in
Nevada, 5 in Idaho, 4 in Texas, 3 in Wyoming, 3 in California, 2 in Oregon, 2 in
New Mexico and 1 in  Montana.  Each of the offices  operates  as an  independent
profit  center with each manager  having  overall  responsibility  for sales and
marketing, recruiting and retention of temporary staffing employees and customer
relations.  An office  staff  typically  consists  of the  manager and up to six
regular  staff  personnel  who  market  to  the  Company's  customers,   process
applicants, match customer needs with available temporary staffing employees and
monitor  temporary  staffing  employee  performance.  Office  managers report to
region, area or district managers who typically have responsibility for three to
ten offices.  The Company has established two regions for management  purposes -
Utah and Eastern Colorado.  Where possible, the offices are grouped around a hub
office  in a key  metropolitan  center  or  organized  into  regions,  areas  or
districts  supervised by an area or district manager.  The Company believes that
grouping of offices permits leveraging of marketing and administrative costs and
facilitates market penetration.

         During 1996,  the Company's  light  industrial,  clerical,  industrial,
information  technology and technical and professional  groups  contributed 41%,
20%, 11%, 5% and 5% of revenues,  respectively.  In addition, the Company offers
payrolling and professional employer services,  which contributed  approximately
14% and 4% of revenues for 1996,  respectively.  Payrolling services are offered
in most offices.  PEO services  (employee  leasing) are offered through a single
office under the ServCom tradename.  The Company's SOS Staffing Services offices
provide  personnel  for a wide  range of  temporary  staffing  needs.  In larger
markets these offices focus on providing clerical and light industrial personnel
while specialty needs, such as construction and industrial services are provided
by specialty offices. In smaller markets, SOS offices offer a broader variety of
temporary staffing services,  including these specialty services.  The Company's
Skill Staff  offices  provide  temporary  staff  services  in the  construction,
manufacturing,  steel  fabrication,  machining,  welding and other skilled labor
occupations.  Some of the Skill Staff offices are stand-alone,  while operations
in smaller markets are combined with a SOS Staffing Services office.  Industrial
Specialists offices provide temporary staff laborers, warehouse workers, drivers

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<PAGE>

and dock workers.  SOS Technical Services offices provide temporary staffing for
customers  with  technical  job  requirements,  including  engineers,  chemists,
designers, drafters, technicians,  information systems and technology personnel,
system designers,  illustrators, artists and writers. The Company's AccountStaff
offices provide temporary staffing for accounting,  bookkeeping,  auditing, data
entry  and  financial  analysis.  The PAMS  division  specializes  in  providing
temporary help in the medical administrative support area and, through the trade
name of National  Collex,  provides  collection  services  and  special  project
billing  services to medical  facilities.  CGS Personnel  provides  contract and
temporary  geologists and related personnel to the mining,  mineral  exploration
and environmental industries. During 1996 the Company augmented its capabilities
in  the  information  technology  segment  with  its  acquisitions  of  Wolfe  &
Associates,  Impact  Staffing and The  Performance  Group. In February 1997, the
Company   completed  the  acquisition  of  Computer  Group,   Inc.,  its  fourth
acquisition in the information technology area.

         Other Services. The Company offers payrolling,  outsourcing and on-site
services. Payrolling typically involves the transfer of a customer's short-term,
seasonal or  special-use  employees  to the  Company's  payroll for a designated
period. Outsourcing represents a growing trend among businesses to contract with
third  parties to provide a particular  function or business  department  for an
agreed price over a  designated  period.  On-site  services  involve  locating a
regular SOS  employee at the  customer's  place of business to manage all of the
customer's  temporary staffing  requirements.  The Company views outsourcing and
on-site  services as  significant  opportunities  to expand its  business and to
utilize its temporary staffing employees to provide these services. Finally, the
Company  provides  administrative  professional  services which offer  customers
skills  testing,  drug  testing and risk  management  services.  Skills  testing
available to customers  through SOS offices include  cognitive,  personality and
psychological  evaluations.  Drug tests are  confirmed  through  an  independent
certified laboratory. Risk management services include on-site safety inspection
and  consulting  services.  These services are made available to customers for a
fee on a cost-effective and convenient basis.

         Customers  and  Marketing.   The  Company  provided  more  than  56,000
temporary  staffing  employees to  approximately  8,000  customers  in 1996.  No
customer accounted for more than three percent of the Company's service revenues
in 1996 and the  Company's  top ten  customers  accounted  for less  than 12% of
service  revenues for the same period.  SOS's services are marketed  through its
network of offices whose managers,  supported by the Company's  marketing staff,
make  regular  personal  sales visits to larger  customers  and  prospects.  The
Company  emphasizes  long-term  personal  relationships with customers which are
developed through regular contact,  periodic assessment of customer requirements
and regular monitoring of temporary employee performance. New customers are also
obtained through customer referrals,  telemarketing and advertising in a variety
of local and regional media,  including  television,  radio, direct mail, Yellow
Pages,  newspapers,  magazines  and trade  publications.  The  Company is also a
sponsor of job fairs and other community events.

         Temporary Staffing Employee Recruitment. The Company employs recruiters
who regularly visit schools,  clubs and  professional  associations  and present
career development programs to various  organizations.  In addition, the Company
obtains  applicants from referrals by its temporary  staffing employees and from
advertising  on radio,  television,  in the Yellow Pages and through other print
media. The SOS Technical division also recruits over the Internet.

         At SOS,  each  applicant  is  interviewed  with  emphasis  on past work
experience, personal characteristics and individual skills. The Company utilizes
the  Dictionary  of  Occupational  Titles ("DOT"  codes),  published by the U.S.
Department of Labor, to evaluate and assign temporary  staffing  employees.  The
Company  maintains  software  training centers for applicants who may be trained
and tested at no cost to the  applicant or to the  Company's  customers.  During
1996,  the  Company  assigned  over  56,000  temporary   staffing  employees  to
customers.  To  promote  loyalty  and  retention  among its  temporary  staffing
employees,  the Company  emphasizes  issuance of paychecks  during the same week
worked,  and provides its temporary  staffing  employees  with certain  employee
benefits,  including  access to a Section  401(k) defined  contribution  plan, a
credit  union  and  health  insurance  programs  offered  through  the  National
Association of Temporary Staffing Services ("NATSS").

         Risk Management  Program.  SOS is responsible for all  employee-related
expenses for its temporary staff  employees,  including  workers'  compensation,
unemployment  insurance,  social security taxes, state and local taxes and other
general payroll expenses.  From 1993 through 1995 the Company  maintained a paid
loss retro workers'  compensation  program through American  International Group
("AIG"). Under the terms of that agreement, the Company maintained a loss cap of

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$250,000,  except for Skill Staff and  ServCom,  which  maintained  loss caps of
$100,000 under a separate policy.  In those years, the Company made deposits and
paid  premiums  and  expenses in advance for all  anticipated  costs to AIG. The
difference  between payments made and actual expenses for each year are returned
to the  Company  over the next  succeeding  four  years.  In 1996,  the  Company
implemented a deductible  workers'  compensation  program through CIGNA Property
and Casualty ("CIGNA"). The loss cap under the new policy is $200,000. Under the
CIGNA  program,  the  Company  deposits  a  one-month  escrow  for paid  losses,
reimburses  that escrow  deposit  monthly  for actual  losses and pays all other
costs and premiums  over the course of the year.  CIGNA has  assigned  full-time
adjusters on-site at the Company's  corporate office.  The Company believes that
its has  benefited,  and will continue to benefit,  from the change in insurance
carriers,  due  principally  to reduced  deposit  requirements,  reduced  excess
insurance  premiums  and more  efficient  claims  handling.  Temporary  staffing
employees  in  Wyoming,  Nevada and - most  recently -  Washington  are  insured
through those states' insurance funds because private insurance is not permitted
in those states.  The Company employs a full-time  professional risk manager and
staff  who work  closely  with the  insurance  carriers  to  manage  claims  and
establish appropriate reserves.

         The Company  has also  developed  workers'  compensation  loss  control
programs which seek to limit claims through  employee  training and avoidance of
high-risk job assignments,  such as roofing or logging.  All temporary  staffing
employees  are  required  to agree in  advance  to drug  testing  following  any
work-related  accident and all major accidents are  investigated.  Finally,  all
claims are monitored in cooperation with the Company's  insurance  carriers with
regular review and emphasis on early closure. The Company believes that its risk
management programs have contributed to improved gross profit margins.

         The Company  estimates its workers'  compensation  reserves and expense
for each  period  based upon an  estimate  of the costs of  reported  claims and
incurred but not yet reported claims. These estimates are based upon information
provided by the insurance carrier and historical claims information monitored by
the Company.  In addition,  the Company provides  additional reserves based upon
expected  future  development  of those  claims.  Such reserve  amounts are only
estimates  and there can be no  assurance  that the  Company's  future  workers'
compensation  obligations  will not exceed the  amount of its  reserves  or that
actual  claim costs will not rise in the future.  However,  management  believes
that the  difference,  if any,  between the amounts  recorded for its  estimated
liability and the costs of settling  actual claims,  will not be material to the
results of operations.

Seasonality

         The Company's  business  follows the seasonal  trends of its customers'
business, which are, in turn, significantly affected by the climate in which the
customers do business.  The Company usually  experiences  higher revenues in its
third quarter because of favorable weather  conditions,  higher overall economic
activity and hiring of temporary  staffing  employees to replace student workers
who return to school in August and  September.  Historically,  the  Company  has
experienced  lower  revenues  in the first  quarter due to  unfavorable  weather
conditions and lower overall economic activity;  however, as the Company expands
its office network to include  western states with more moderate  climates,  the
Company may experience less impact from unfavorable weather conditions.

Information Systems

         The Company's central management information system is linked to all of
the Company's  offices  either  through a frame-relay  system or modem.  Smaller
offices  also utilize  stand-alone  computers  and  software for routine  office
functions.  The  centralized  system  supports  Company-wide  operations such as
payroll,  billing,  accounting  and  sales  management  reports.  The  Company's
retrieval  software permits efficient  matching of customers'  requirements with
available  temporary  staffing  employees.  All of the  offices  acquired by the
Company, with the exception of Wolfe & Associates, have been integrated into the
Company's management information system.

         The operating system software  utilized by the Company is licensed on a
perpetual royalty-free basis. The Company's proprietary  application software is
regularly updated and revised to meet the Company's specific  requirements.  All
files are backed up daily and stored  off-site.  The present system has capacity
to  service  the  Company's   anticipated  growth  without  significant  capital
expenditures for the foreseeable future.

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<PAGE>

Competition

         The  temporary  staffing  industry  is  comprised  of more  than  3,500
national,  regional and  independent  companies  operating  over 12,000  offices
throughout  the  nation,  making  the  industry  highly  competitive  and highly
fragmented.  The Company faces competition from large national and international
companies,  including Manpower Inc., Kelly Services Inc., Adia/Ecco,  The Olsten
Corporation,  Personnel  Group of America and Accustaff,  Inc. In addition,  SOS
competes with many regional and local temporary service companies.

         The Company competes for qualified temporary staffing employees and for
customers who require the services of such employees.  The principal competitive
factors in attracting and retaining  qualified  temporary staffing employees are
competitive  salaries and  benefits,  quality and frequency of  assignments  and
responsiveness  to employee  needs.  The Company  believes that many persons who
seek  temporary  employment  are also seeking  regular  employment  and that the
availability  of  assignments,  which  may  lead to  regular  employment,  is an
important  factor  in  its  ability  to  attract  qualified  temporary  staffing
employees.

         The principal  competitive  factors in obtaining customers are a strong
sales and marketing  program,  having qualified  temporary staffing employees to
assign in a timely  manner,  matching of customer  requirements  with  available
temporary staffing  employees,  pricing services  competitively and satisfactory
work production.  The Company believes its strong emphasis on providing  service
and value to its  customers  and  temporary  staffing  employees  are  important
competitive advantages.

Trade Names

         The  Company  uses a variety of  trademarks  and trade  names which are
generally descriptive of the temporary staffing services offered,  including SOS
Staffing  Services,  Skill  Staff,  AccountStaff,  Industrial  Specialists,  SOS
Technical  Services,  ServCom,  PAMS Employment  Services,  National Collex, CGS
Personnel,  Wolfe &  Associates,  Impact  Staffing  and The  Performance  Group.
Effective in February 1997, the Company began utilizing the Computer Group, Inc.
tradename.  The Company has  registered or reserved  these names in the Mountain
States and in a number of other states where they may be used in the future. The
Company anticipates that at some future date the information technology names of
Wolfe & Associates,  Impact Staffing,  The Performance Group and Computer Group,
Inc. may be modified or changed to reflect their association.

Employees

         At December 29, 1996, the Company had approximately 472 staff employees
including 33 administrative employees, 13 region, area and district managers, 87
office managers and 339 other staff employees. The Company's training department
provides  general and job  specific  training to all  Company  staff  employees,
including  continuing  training  with  experienced  counterparts.  None  of  the
Company's staff employees is covered by collective  bargaining  agreements.  The
Company considers its relationship with its staff employees to be good.


ITEM 2.  PROPERTIES

         The Company's  executive  offices are located in leased office space in
Salt Lake City, Utah. The premises  consist of approximately  15,600 square feet
and are leased from a related party for a term ending on March 31, 2005, with an
option to renew for ten additional  years.  The Company  believes that the lease
terms are at least as favorable as could be obtained  from any  unrelated  third
party.  The Company also leases  office  space in various  locations in which it
operates for local branch operations  including sales,  recruiting,  dispatching
and customer support operations.

         The Company owns substantially all equipment used in its facilities.

                                       7
<PAGE>


ITEM 3.  LEGAL PROCEEDINGS

         On February  26,  1996,  a former  employee  of the Company  served the
Company with a wrongful  termination  lawsuit in the Third District Court,  Sale
Lake County, Sate of Utah. The complaint seeks compensatory damages in excess of
$4.5 million and punitive  damages of $4.0  million.  The court  entered a final
order  dismissing  the case in February  1997,  however,  until May 5, 1997, the
plaintiff  may appeal or ask the court to set aside the  dismissal.  The Company
does not believe there is sufficient basis for either action to be successful.

         In the  ordinary  course of its  business,  the Company is from time to
time  threatened with or named as a defendant in various  lawsuits.  The Company
maintains  insurance in such amounts and with such coverage and  deductibles  as
management believes to be reasonable and prudent. The principal risks covered by
insurance  include  workers'  compensation,   personal  injury,  bodily  injury,
property damage, errors and omissions, fidelity losses and general liability.

         There  is no other  pending  litigation  which  the  Company  currently
anticipates  will have a  material  adverse  effect on the  Company's  financial
condition or results of operations.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matters  were  submitted  to a vote of security  holders  during the
fourth quarter of fiscal 1996.

                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
          SHAREHOLDER MATTERS

          The  information  required by this Item is  incorporated  by reference
to page 25 of the Company's 1996 Annual Report to Shareholders.


ITEM 6.  SELECTED FINANCIAL DATA

         The  information  required by this Item is  incorporated  by  reference
to page 1 of the Company's 1996 Annual Report to Shareholders.


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATIONS

         The information  required by this Item is  incorporated by reference to
pages 7 through 9 of the Company's 1996 Annual Report to Shareholders.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

         The  information required by this  Item is  incorporated  by  reference
to pages 10 through 24 of the Company's 1996 Annual Report to Shareholders.


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
           AND FINANCIAL DISCLOSURE

         None

                                       8
<PAGE>

                                    PART III

         Certain information  required by Part III of this Annual Report on Form
10-K is omitted from this Report in that the  Registrant  will file a definitive
proxy statement for the Annual Meeting of Shareholders of the Company to be held
on May  14,  1997 as  required  pursuant  to  Regulation  14A of the  Securities
Exchange  Act of 1934,  as amended (the "Proxy  Statement"),  not later than 120
days  after the end of the  fiscal  year  covered  by this  Report  and  certain
information  included  therein is incorporated  herein by reference.  Only those
sections of the Proxy Statement specifically  identified below which address the
items set forth herein are incorporated by reference.

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The  information  required by this Item is incorporated by reference to
the sections  entitled  "Election of Directors" and "Executive  Officers" in the
Proxy Statement.

ITEM 11.  EXECUTIVE COMPENSATION

         The  information  required by this Item is incorporated by reference to
the  sections  entitled  "Election  of   Directors-Director   Compensation"  and
"Executive Officers-Executive Compensation" in the Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The  information  required by this Item is incorporated by reference to
the  section  entitled  "Principal  Holders of Voting  Securities"  in the Proxy
Statement.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The  information  required by this Item is incorporated by reference to
the section entitled  "Certain  Relationships  and Related  Transactions" in the
Proxy Statement.

                                       9

<PAGE>


                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL SATEMENT SCHEDULES AND REPORTS OF FORM 8-K

(a)       The following documents are filed as part of this Report:

1.       Financial Statements:  The following Consolidated  Financial Statements
         of  SOS  Staffing  Services,  Inc. and  Report of Arthur  Andersen LLP,
         Independent Public Accountants, are incorporated by reference to  pages
         10 through 24 of the Registrant's 1996 Annual Report to Shareholders:

         Consolidated Balance Sheets -  As of December 29, 1996 and December 31,
         1995

         Consolidated  Statements of Income--For the Fiscal Years Ended December
         29, 1996, December 31, 1995 and January 1, 1995

         Consolidated  Statements of Shareholders'  Equity--For the Fiscal Years
         Ended December 29, 1996, December 31, 1995 and January 1, 1995

         Consolidated  Statements  of Cash  Flows--For  the Fiscal  Years  Ended
         December 29, 1996, December 31, 1995 and January 1, 1995

         Notes to Consolidated Financial Statements

         Report of Arthur Andersen LLP, Independent Public Accountants

2.        Financial Statement Schedules:

         No schedules submitted

(b)      Reports  on Form 8-K:  During the fourth  quarter of fiscal  1996,  the
         Company filed a Current  Report on Form 8-K dated November 6, 1996 with
         respect to the  acquisition of all of the  outstanding  common stock of
         Wolfe & Associates, Inc., a New Mexico corporation.  Wolfe & Associates
         is an information  technology  company providing  consulting  services,
         project management,  information systems design,  programming and other
         information  technology related staffing services to private-sector and
         public-sector clients throughout the United States.

(c)       Exhibits
<TABLE>
<CAPTION>
                                                                                  Incorporated
          Exhibit                                                                      by               Filed
            No.                              Exhibit                                Reference          Herewith   
                                             

            <S>              <C>                                                         <C>             <C>
            3.1              Amended and Restated Articles of Incorporation              (1)
                             of the Company

            3.2              Amended and Restated Bylaws of the Company                  (1)

            4.1              Specimen Certificate of the Company's Common                (1)
                             Stock, par value $.01 per share

            4.2              Amended and Restated Articles of Incorporation              (1)
                             of the Company
          
            4.3              Amended and Restated Bylaws of the Company                  (1)

                                       10

<PAGE>
                                                                                  Incorporated
<CAPTION>
         Exhibit                                                                       by               Filed
           No.                               Exhibit                                Reference          Herewith
    
           <S>               <C>                                                         <C>             <C>
           10.1              SOS Staffing Services, Inc. Stock Incentive Plan            (3)
                             dated May 4, 1995, as amended

           10.2              Form of Employment Agreement entered into by the            (1)
                             Company and each of Messrs. Richard D. Reinhold,
                             Howard W. Scott, Jr. and Richard J. Tripp

           10.3              Form of Consulting Agreement between the Company            (2)
                             and Ms. JoAnn W. Wagner, effective as of July 1, 1995

           10.4              Lease Agreement between the Company and Reed F.             (1)
                             Reinhold, Rand F. Reinhold, Rena R. Qualls and Robb
                             F. Reinhold, dated April 1, 1995, covering the
                             Company's Corporate office building
           
           10.5              Assignments of Accounts Receivable from the Company         (2)
                             to Richard D. Reinhold and Sandra E. Reinhold,
                             dated April 25 and May 15, 1995, and related
                             Accounts Receivable Servicing Agreement

           10.6              Franchise Agreement between the Company and TSI of          (1)
                             Utah, Inc., dated January 1, 1995, as amended

           10.7              Asset Purchase Agreement between the Company                (3)
                             and Add-A-Temp, Inc., dated August 15, 1995

           10.8              Asset Purchase Agreement between the  Company,              (3)
                             Patient Accounting Management Services and National
                             Collex Corporation, dated November 9, 1995

           10.9              Asset Purchase Agreement between the Company and            (3)
                             Geomine Personnel, Inc., dated December 19, 1995

           10.10             Credit Agreement dated as of July 11, 1996 by and           (4)
                             among the Company, First Security Bank, N.A. and
                             NBD Bank, together with Security Agreement and
                             Revolving Credit Notes

           10.11             Stock Purchase Agreement between the Company, Wolfe         (5)
                             & Associates, Inc. and certain shareholders of
                             Wolfe & Associates, Inc. dated November 5, 1996

           13                Annual Report to Shareholders for the year ended                              (7)
                             December 29, 1996.  Certain portions of this exhibit are
                             incorporated by reference into Items 5 through 8 of this
                             Annual Report on Form 10-K and, except as so
                             incorporated by reference, the Annual Report to
                             Shareholders is not deemed to be filed as part of this
                             Report.

           21                Subsidiaries of the Company                                 (6)

                                       11
<PAGE>
<CAPTION>
                                                                                   Incorporated       
          Exhibit                                                                      by               Filed
            No.                                 Exhibit                             Reference          Herewith
 
           <S>               <C>                                                         <C>               <C>
           23.2              Consent of Arthur Andersen LLP, Independent Public                            (7)
                             Accountants

           27                Financial Data Schedule                                                       (7)   
</TABLE>

                                       
(1)        Incorporated by reference to the exhibits to a Registration Statement
           on  Form  S-1  filed by the Company on May 17, 1995, Registration No.
           33-92268.

(2)        Incorporated  by  reference  to  the exhibits to Amendment No. 1 to a
           Registration   Statement  on  Form   S-1  filed  on  June  22,  1995,
           Registration No. 33-92268.

(3)        Incorporated  by reference to the  exhibits to the  Company's  Annual
           Report on Form 10-K for the year ended December 31, 1995 filed by the
           Company on March 29, 1996.

(4)        Incorporated  by reference  to the exhibits to a Quarterly  Report on
           Form 10-Q for the  quarter  ended  September  26,  1996  filed by the
           Company on November 14, 1996.

(5)        Incorporated by reference to the exhibits to a Current Report on Form
           8-K filed by the Company on November 14, 1996.

(6)        Incorporated  by  reference  to  the exhibits to Amendment No. 1 to a
           Registration  Statement  on Form S-1 filed by the Company on December
           12, 1996, Registration No. 333-16187.

(7)        Filed herewith and attached to this Report following page 13 hereof.

(d)       Financial Statement Schedules:

           No schedules submitted

                                       12

<PAGE>


                                   SIGNATURES


Pursuant to the  requirements  of Section 13 of the  Securities  Exchange Act of
1934,  the  Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereto duly authorized.

                                            SOS STAFFING SERVICES, INC.

                                            By:     /s/ Gary B. Crook
Date:  March 24, 1997                              Gary B. Crook,
                                                   Vice President, Treasurer and
                                                   Chief Financial Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.


Name                           Title                              Date

/s/ Stanley R. deWaal          Director                           March 24, 1997
---------------------
Stanley R. deWaal


/s/ Richard D. Reinhold        Chairman of the Board and          March 24, 1997
-----------------------
Richard D. Reinhold            Chief Executive Officer


/s/ R. Thayne Robson           Director                           March 24, 1997
--------------------
R. Thayne Robson


/s/ Randolph K. Rolf           Director                           March 24, 1997
--------------------
Randolph K. Rolf


/s/ Howard W. Scott, Jr.       Director, President and            March 24, 1997
------------------------
Howard W. Scott, Jr.           Chief Operating Officer


/s/ Richard J. Tripp           Director and                       March 24, 1997
--------------------
Richard J. Tripp               Senior Vice President


/s/ JoAnn W. Wagner            Director                           March 24, 1997
-------------------
JoAnn W. Wagner

                                       13