Economic Report Enabling work, adaptation, security & prosperity - 2018 edition - World Employment Confederation Europe
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ABOUT THE WORLD EMPLOYMENT CONFEDERATION The World Employment Confederation is the authoritative voice of the employment industry at the global level. It connects labour market enablers from 50 countries and 7 major workforce solutions companies with a unique network that brings together international policy makers, social partners, the academic world and other relevant stakeholders. Through its policy work the World Employment Confederation strives for recognition of the employment industry's economic and social role. It leads the way in defining high employment and recruitment standards and practices and is a thought leader in shaping futureproof and competitve labour markets. it acts as an advisor to the employment industry on new ways of workforce sourcing & deployment. With analysis and research covering 50 labour markets it is able to provide members with a broad range of services including support in capacity building and business development around the globe. Members of the World Employment Confederation represent a wide range of HR services, including agency work, direct recruitment, career management, RPO and MSP. www.wecglobal.org/economicreport2018 All rights reserved © WEC 2018
Enabling Work 21 CONTENTS Provide quality and meaningful work Provide a stepping stone Foreword4 Denis Pennel World Employment Confederation Managing Director Enabling Adaptation 33 Key findings 7 Facilitate work transitions and social mobility Regional focus 17 Adapt workforce to production needs North America 17 South America 18 Improve employability by upskilling Europe19 Facilitate work transitions and social mobility APAC20 Improve employability by upskilling 1- Enabling Work 21 Provide quality and meaningful work 22 Provide a stepping stone 27 2- Enabling Adaptation 33 Enabling Security 41 Facilitate work transitions and social mobility 34 Adapt workforce to production needs 37 Secure access to talent Improve employability by upskilling 38 Increase business competitiveness Facilitate work transitions and social mobility 39 Deliver portable rights Improve employability by upskilling 40 3- Enabling Security 41 Secure access to talent 42 Increase business competitiveness 45 Deliver portable rights 48 4- Enabling Prosperity 51 Reduce unemployment 52 Enabling Prosperity 51 Increase inclusiveness and diversity 54 Reduce unemployment Increase work income 56 Increase inclusiveness and diversity Annexes57 Increase work income
Foreword In 2017, the World Employment Confederation celebrated its 50th anniversary. The employment industry has certainly come a long way since 1967. From those initial days, the World Employment Confederation has grown today into a global organisation that numbers 1.9 million labour market specialists across 50 countries and that delivers a wide range of HR services, from agency work and direct recruitment to career management, RPO and MSP. Thanks to the combined 143.000 employment agencies operating under the umbrella of the World Employment Confederation, the industry builds open, inclusive, sustainable and enabling labour markets by helping people into work and by supporting companies in navigating in safe and agile environments. In 2016 the members of the World Employment Confederation helped 56 million people to find jobs, including more than 14 million young adults, facilitating their integration into the world of work and laying the foundation for their career. Meanwhile, the employment industry continued to evolve worldwide, benefiting from a gradual pick-up of the world economy. The report estimates the employment industry generated € 491 billion in revenue worldwide in 2016, supporting millions of organisations to grow their business by finding the skilled talent they need. Published annually, our Economic Report aims at giving a comprehensive picture of the employment industry and labour market trends in general. It shows how the members of the World Employment Confederation act as labour market enablers, playing a key role in delivering work, adaptation, security and prosperity to societies. I hope you find the report interesting and informative and invite you to browse through its content. Should you have any questions regarding the facts and figures published in this Economic Report, do not hesitate to get in touch with the World Employment Confederation’s Head Office at info@wecglobal.org DENIS PENNEL World Employment Confederation Denis Pennel Managing Director Managing Director 4 WEC Economic Report 2017
KEY FINDINGS Create more work Provide quality & opportunities meaningful Improve Provide work access to & Enable 56 stepping stone transparency As labour market enablers, million of labour market members of the World Employment people to Increase Facilitate work Confederation contribute to better find work INTEGRATO inclusion & CIAL RS transitions and functioning labour markets by: diversity SO social mobility ENABLING Enabling work: WORK Acting as social integrators and Enrich GDP by Improve AG OWTH DRIVERS ADAPTATION PROSPERITY inspiring hope among workers and sales revenues employability by ENABLING ENABLING ILITY CREATORS upskilling companies. LABOUR MARKET Enabling adaptation: Help 5 million Increase work ENABLERS Adapt workforce income & Working as agility creators and companies in purchasing to production GR needs building stakeholder confidence securing access to power ENABLING talent SECURITY Enabling security: Reduce TR US R S Being a trusted labour market advisor undeclared TE DL VISO Provide work- work & ABO AD life balance to workers and companies and UR MARKET unemployment building trust. Deliver Increase portable Enabling prosperity: business rights Driving growth in the economy Support 3 million competitiveness Act as Secure access to creating a sense of pride. people during career agent talent their career transition or professional development Help 14 million young people navigate the labour market WEC Economic Report 2017 5
REPRESENTING A BROAD RANGE OF HR SERVICES Members of the World Employment Confederation cover a wide range of HR services, including agency work, direct recruitment, career management, RPO and MSP. Through all HR services, the employment industry increases labour market participation rates, it helps companies remain competitive within the global economy and creates decent jobs that would otherwise not exist. Supply & demand of work Regulatory environment Sourcing candidates Skills mapping Employee referrals Labour market surveys Skills assessment Thought leadership Testing On boarding Agency Work LABOUR MARKET INTELLIGENCE Off boarding Direct (perm & temporary) TALENT ACQUISITION Contract for servicing HR Consulting Self-employed Workforce Analytics PLACEMENT Apprenticeship Strategic Workshop Planning Job Search councelling RPO ADVISORY SERVICES Capacity building MSP Process excellence MANAGED SERVICES BPO Human Cloud Training CAREER MANAGEMENT Payrolling Outplacement Career Transitions Welfare-to-Work Coaching Compensation & Benefits Leadership Development Performance Assessment 6 WEC Economic Report 2017
Key findings THE EMPLOYMENT INDUSTRY IN 2016 In 2016, the employment industry generated €491 billion in revenue worldwide, mostly driven by agency work accounting for € 350 billion. Agency work is growing in many markets in Europe with the Netherlands, France, Germany, Italy and Spain all experiencing significant growth compared to the previous year and compensating for a slowdown in the UK. Japan continues to experience accelerated growth in agency work (8% compared to 7% the year before) while growth in the US, the largest agency work market, remains stable. The direct recruitment market rose slightly to € 37.8 billion, confirming its trend towards a more profitable and faster-growing HR service. In 2016, both MSP and RPO continued to grow, with an increase of 11% and 13% compared to last year, generating € 97 billion and € 3,4 billion respectively, although such growth is flattened by the Euro/US Dollar exchange rate. This overview reflects the positive role that HR services companies play for economies, individuals and enterprises. Acting as social integrators, agility creators, trusted labour market advisors and growth drivers, the 143.000 employment agencies the World Employment Confederation gathers – supported by its 1.9 million staff, give hope, develop confidence, build trust and deliver pride to both individuals and user companies. *Exchange rate US dollar – Euro: 0,83 WEC Economic Report 2017 7
GLOBAL MARKET SIZE (SALES REVENUE) € 350 bn Agency Work Global market size of MSP** € 97 bn € 491 billion (sales revenue) Direct Recruitment € 37.8 bn RPO** € 3.4 bn Career Management € 2.7 bn In 2016, the employment industry generated €491 billion in sales revenue worldwide. 5 countries (the USA, Japan, the UK, Germany and China ) made up the majority of the revenue. Of all revenue generated in 2016, 71% was from agency work, 20% from MSP, 8% from direct recruitment, with the remaining 1% coming from RPO and Career Management. ** Figures marked with two asterisks refer to data provided by Staffing Industry Analysts 8 WEC Economic Report 2017
143,000 employment and recruitment agencies and 1,9 million internal staff to help people navigate the labour market WEC Economic Report 2017 9
IN 2016, THE EMPLOYMENT INDUSTRY HELPED AROUND 56 MILLION PEOPLE ACCESS LABOUR MARKETS AROUND THE GLOBE Agency work headcounts USA 14.490.000 China 8.760.000 Global Number of Agency Work Headcounts Japan 2.630.325 41 million individuals France 2.200.000 placements India* 2.100.000 UK* 1.198.000 56.5 million Germany South Africa* 990.792 900.000 Poland 797.779 Netherlands 770.136 Italy 650.000 Belgium 624.851 Spain 619.923 Australia* 550.000 Brazil 482.186 Colombia 478.156 Canada 450.000 Switzerland 317.624 Czech Republic* 250.000 Chile 200.000 MSP Sweden 155.000 8 million individuals Mexico 153.881 Argentina 131.000 Hungary 124.576 Ireland* 120.000 Direct Recruitment Portugal* 118.000 4,17 million individuals New Zealand* 105.000 Finland 100.000 Norway 100.000 Austria 79.259 Career Management Russia* 75.767 3 million individuals Morocco* 62.000 Romania 57.338 Luxembourg 26.145 RPO Denmark* 20.647 0,3 million individuals Croatia* 16.000 Greece 14.152 Bulgaria 10.032 Estonia 5.000 * Figures marked with an asterisk refer to 2015 10 WEC Economic Report 2017
THE AGENCY WORK MARKET Top 15 Countries ranked by sales revenue in Agency Work USA € 122.2 bn As illustrated in these rankings, the 15 largest countries in terms of revenue in agency work represented 90% of the global market in 2016. The US market accounts for 42% of the Japan € 43.7 bn global market and is by far the largest. The USA, Japan, China, Germany and the China € 33.0 bn UK account for 75% of total revenue, clearly showing agency work is still dominated by a Germany € 32.2 bn Australia** € 11.9 bn handful of countries worldwide. France € 18.9 bn Italy € 8.5 bn Netherlands* € 13.4 bn UK € 31.8 bn Switzerland € 6.5 bn Canada** € 5.8 bn India** € 3.6 bn Belgium € 5.4 bn Spain € 4.15 bn South Africa** € 2.9 bn 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 * NL figures are an estimate, not actual ** Figures marked with two asterisks refer to data provided by Staffing Industry Analysts WEC Economic Report 2017 11
THE AGENCY WORK MARKET Penetration rate by country (2016) Although agency work can be found on all 5 continents, UK: 4.1% the United States, Europe, Japan, Australia and China represent most of the total turnover. This table gives an overview of the penetration rate of agency work in the 3.6% 3.3% USA: 2.1% best performing countries. The success of agency work 3.3% 3.0% can be explained by the fact that it creates added value for 2.6% the worker, the employer, the labour market and society 2.4% Japan: 2% as a whole. 2.4% 2.2% 2.0% 1.5% 1.8% 1.5% Global: 1.6% 2.0% 1.3% 1,3% 0.8% 1,2% 0,7% 1.1% 0.7% 1,1% 0.9% 0.7% 0.6% 0.5% 0.9% 0.6% 0.5% 0.3% 0,4% 0.2% 0.2% 0.1% UK AU* NL NZ* LU HU* GER BE FR US JP PT* CH AT* SE* ZA* FI IT PL NO CH CZ* MX* BR DK* CA* SP CO* CR ES CL* AR RO LT MA* GR * Figures marked with an asterisk refer to 2015 12 WEC Economic Report 2017
THE DIRECT RECRUITMENT MARKET Top 15 Countries ranked by sales revenue in Direct Recruitment (2016, in bn€) 1 USA € 18.9 bn 2 UK € 4.5 bn 3 Australia * € 4.0 bn Global direct recruitment 4 Germany € 3.3 bn market 5 Canada * € 3.0 bn €37,8 billion 6 Japan € 2.7 bn 7 China ** € 2.4 bn 8 France € 1.0 bn 9 Ireland* € 0.6 bn 10 Netherlands € 0.6 bn 11 Switzerland € 0.5 bn The global direct recruitment market in 2016 was worth an 12 New Zealand* € 0.4 bn estimated €37,8 billion. The USA remains by far the largest market in direct recruitment with the United Kingdom the 13 Brazil € 0.3 bn largest and oldest market in Europe (in sales). 14 South Africa** € 0.3 bn The contribution per country breakdown saw the Belgium € 0.2 bn following top 15 15 * Figures marked with an asterisk refer to 2015 ** Figures marked with two asterisks refer to data provided by Staffing Industry Analysts WEC Economic Report 2017 13
THE RPO MARKET RPO market growth (2016 in bn€) The global RPO market in 2016 was worth an estimated +13% 2016 Revenue €3,4 billion. The market grew by 13% globally, with a consistent increase in all regions. North America is the 3.7 2015 Revenue largest market accounting for 44%, followed by Europe (30%) and APAC (23%). South America experienced tremendous growth, although it accounts for a mere 3% 3.3 of the global market. +13% 1.6 1.4 +11% 1.1 +14% 1.0 0.8 0.7 +34% 0.1 0.12 Global North America Europe APAC South America Source: Staffing Industry Analysts 14 WEC Economic Report 2017
THE CAREER MANAGEMENT MARKET Business drivers for providing outplacement Global sales revenue (2016) € 1 bn 33% € 2.7 billion € 1.1 bn 37% € 0.5 bn € 0.1 bn 18% 3% The global Career Management market reached €2,7 billion in 2016, which represents a small downturn compared to the previous year. The decline, to some extent, is due to the recovery of the economy in markets where outplacement, the process of accelerating career transition for displaced employees is the most established. The regions where Career Management is the most well established are North America and Europe, followed by the Asia Pacific region. Source: estimation made by the World Employment Confederation WEC Economic Report 2017 15
THE MSP MARKET Top 10 countries ranked by sales revenue in MSP (2016, in bn€) € 49 bn The global MSP market in 2016 € 97 billion The global MSP market in 2016 was worth an estimated 97 € billion. The United States leads the field unrivalled, accounting for more than half of the market alone, followed by the UK (14%) and Australia (4,2%). The top 10 countries listed below account for more than 80% of the global MSP market. € 13.5 bn € 4 bn € 2.1 bn € 1.8 bn € 1.2 bn € 1 bn € 2.1 bn € 1.6 bn € 1.1 bn USA UK Australia Germany Canada India Netherlands Switzerland Belgium France Source: Staffing Industry Analysts 16 WEC Economic Report 2017
Regional focus NORTH AMERICA Number of Number of private placements employment agencies Internal staff Sales revenue 15,100,000 20,385 406,990 € 129 bn Agency Work Agency Work € 58.1 bn* MSP € 17.8 bn Direct Recruitment € 1.5 bn* The United States dominates the Northern American RPO region accounting for 93% of the total revenue generated by the employment industry. Canada accounts for 6% of € 1 bn the Northern American market, showing a return to growth Career management following a slight downturn in 2015. Mexico accounts for 1% of the total market and shows a 6,6% year-over-year growth in agency work compared to the previous year. *Source: Staffing Industry Analysts WEC Economic Report 2017 17
SOUTH AMERICA Number of Number of private placements employment agencies Internal staff Sales revenue 1,291,000 10,272 249,564 € 5.2 bn Agency Work Agency Work HR specialists € 0.2 bn* MSP Brazil remains the strongest market in South America, € 0.1 bn accounting for about 20% of the total revenue generated by Direct Recruitment the employment industry despite a contracting market in 2015 due to the economic crisis with no recovey in 2016. Recent € 0.1 bn legal changes (Law on Outsourcing, Extension of the Law on Career Management Temporary Work and Labor Reform) have already positively 603,000 impacted the market, with a growth rate of 5% during the 4th quarter of 2017, according to FENASERHTT, the Brazilian € 0.1 bn* RPO Direct Recruitment federation member of the World Employment Confederation. Brazil has the highest agency work penetration rate in the region, followed by Colombia, Chile and Argentina, all below 1% partly due to the large amount of informal labour in the region. *Source: Staffing Industry Analysts 18 WEC Economic Report 2017
EUROPE Number of Number of private placements employment agencies Internal staff Sales revenue 9,441,000 75,800 429,300 € 139 bn Agency Work Agency Work € 30.3 bn* MSP € 11.3 bn Direct Recruitment The UK leads the European employment market and was € 1 bn* responsible for close to 30% of the revenue generated RPO by the private employment industry in 2016 with a total 1,482,000 revenue of €36 billion (for all HR services combined). The German market is the continent’s second largest, followed € 0.9 bn Career management Direct Recruitment by France and the Netherlands. Half of the world’s best performing markets in agency work and 11 out of the 15 best performing markets in direct recruitment are located in Europe. *Source: Staffing Industry Analysts WEC Economic Report 2017 19
APAC Number of Number of private placements employment agencies Internal staff Sales revenue 13,595,325 32,966 769,750 € 96.1 bn Agency Work Agency Work Japan, Australia and China are ranked among the 10 best performing € 9.9 bn Direct Recruitment markets in both agency work and direct recruitment. € 8.3 bn* Japan, the second largest market in agency work, shows a solid MSP year-over-year growth of 8% and ranks sixth amongst the best performing markets in Direct Recruitment. € 0.7 bn* Australia stands out in the Asia Pacific region as a very mature and RPO competitive market. It holds third place in our MSP and Direct 1,717,554 Recruitment rankings and owns the second highest penetration rate in Agency Work (3,6%). € 0.5 bn Career Management Direct Recruitment China has moved into third place in the ranking on agency work in 2016, assisting 8 million agency workers into work. Finally, India represents an emerging market in the HR solutions industry, especialy in MSP where it ranks sixth in the world. *Source: Staffing Industry Analysts 20 WEC Economic Report 2017
WORK ENABLING 1- Enabling Work In 2016, 56 million people gained access to work thanks to a private employment agency, including 41 million agency workers. Agency work continues to expand in most advanced economies, reaching a global sales revenue of €350 billion worldwide, representing roughly 70% of the global employment market revenue. In Brazil, temporary work accounted for 23% of jobs created in 2016. That number rises to 40% in France, clearly demonstrating its impact on economic growth and net job creation. Agency work is positively regarded as it gives workers the opportunity to demonstrate their ability and improves employment prospects and earnings in the short term. RPO also benefits from a positive image for both workers and organisations: companies that outsource recruitment report that their employees are more likely to rate themselves as highly engaged with their work, impacting profitability and growth. Finally, the data gathered by the World Employment Confederation indicates permanent staff placements via direct recruitment rose in 2016, supported by a strong underlying demand for staff in 2016. 56 million people € 491 billion Agency work access to work thanks to a global sales representing roughly 70% private employment agency revenue worldwide of the global employment market size WEC Economic Report 2017 21
PROVIDE Satisfaction levels among agency workers (Scandinavia and Germany) QUALITY AND Overall, how satisfied are you with the content of your job as an agency worker? MEANINGFUL WORK Satisfied Very satisfied Job satisfaction is an affective state where people like or dislike their job and is one of the most researched subject matters in business psychology. Job satisfaction can be linked to many variables including performance, absenteeism and turnover. 59% Therefore it is crucial to cultivate 42% job satisfaction in any work 45% 43% arrangement, including agency work. Recent studies from Norway, Sweden, Germany and Denmark have shown that agency workers have high levels of job 39% 36% 36% satisfaction. 33% Norway Sweden Denmark Germany Source: National Federations of the World Employment Confederation Germany: Source: DEKRA Arbeit Group (2017), survey on temporary agency workers. 22 WEC Economic Report 2017
WORK ENABLING Agency workers satisfaction PROVIDE QUALITY AND Would you recommend being an agency worker to your friends and acquaintances? MEANINGFUL Yes WORK Don't know Agency workers rate temporary No employment as positive or highly positive and would recommend it to their relatives especially in markets with a longer practice of agency work. The positive aspects of agency work are beyond debate: it has enabled many 68% 63% 62% previously unemployed individuals to enter the labour market 85% 77% 87% and temporary agency work is consistently rated as preferable to remaining unemployed. This chart shows agency work is particularly well viewed in Germany and Finland. 20% 18% 18% 16% 20% 14% 17% 15% 13% 7% Sweden Norway Germany Denmark Finland North America Source (Scandinavia): National Federations of the World Employment Confederation - (North America): Staffing Industry Analysts (2017), Temporary Worker Survey 2017 & Cumulative Index to 2012-2016 Surveys. Staffing Industry Analysts - (Germany): DEKRA Arbeit Group WEC Economic Report 2017 23 (2017), Survey on temporary agency workers
PROVIDE Length of assignments worldwide QUALITY AND MEANINGFUL Short-term [< 1 month] WORK Medium-term [1 – 3 months] Long-term [>3 months] Agency work is an integral part of the national economies represented by the federation 5% 10% 10% 10% members of the World 16% 18% 18% 19% Employment Confederation and 29% an essantial factor in sustainability 42% 35% 42% 29% and growth. On the whole, almost 29% 25% 20% all countries surveyed offer a wide 21% 67% 24% selection of assignments going 36% 24% further than just answering short- 20% 97% 89% term human resources needs as it also provides an opportunity to 17.5% 100% source external expertise. 40% 61% 60% 61% 45.5% 57% 65% 51% 66% 46% 70% 22% 40.5% 25% 2% 9% 12.5% 11% 1% 2% LU FR SP JP BR IT GR BE USA UK MX RO AR GER ES CN 24 WEC Economic Report 2017
WORK ENABLING % of employees rating themselves as highly engaged in their work PROVIDE QUALITY AND MEANINGFUL Employees in companies with WORK outplacement solutions Building a highly Other engaged workforce Among other benefits, having a defined process for transitioning employees elsewhere can help with current employee engagement, performance, and retention. More specifically, employees in companies with outplacement solutions in place, are 12% more likely than all others (84% vs. 75%) 84% 75% to rate themselves as highly engaged with their work. Source: Aberdeen Group (2016), Support departing employees and your brand with outplacement, Aberdeen Group WEC Economic Report 2017 25
PROVIDE QUALITY RPO usage has a big impact on employee satisfaction AND MEANINGFUL WORK Companies using RPO All others Building a highly engaged workforce In general RPO implementation can reduce the time-to-hire process but it also enables HR to focus on other concerns, while the business continues to thrive. Companies that outsource recruitment report that their 69% 63% employees are 8% more likely to rate 64% 73% themselves as highly engaged with their work, as compared to all others 44% 46% (69% vs 64%). With RPO providers often employing excellent recruiters and using cutting-edge technologies, candidates are more likely to find their overall experiences to their liking, even if they are not hired. New employees who Employees who rated Candidates who completed RPO users find that candidates who received ratings exceeding themselves as highly the hiring process but were not completed the hiring process and performance expectations engaged hired, still rated their experience weren’t hired are 16% more likely to positively rate their experience positively than in non users company (63% vs 73%). Source: Aberdeen Group (2016), Optimazing Recruitment Process Outsourcing today, Aberdeen Group 26 WEC Economic Report 2017
WORK ENABLING Temp-to-Perm convertion rates PROVIDE A STEPPING STONE The employment industry represents an important channel not only to access the labour market, but also to upgrade people’s employability, allowing 20% 12% 25% them to improve their career. Australia* Brazil Norway Agency Work represents an important stepping stone to secure other employment contracts, such as fixed-term and permanent. There is evidence from many countries globally, that agency work, rather than unemployment, consistently increases the workers’ chances 16% 50% 31% of being offered a permanent The Netherlands Switzerland Spain contract. 35% 17% 28% USA Italy** Germany*** WEC Economic Report 2017 27
PROVIDE A Percentage of agency workers who received and accepted a permanent job in the USA STEPPING STONE Permanent jobs offered The stepping stone effect of agency work Permanent jobs accepted In the USA, one-third (34%) of temporary and contract employees across all sectors were offered permanent positions by a client firm where they had worked on assignment. Of those, two-thirds (66%) accepted the offer. Workers in the healthcare sector, are more likely to receive a permanent job offer (45%) but less likely to accept it (38%). Flexibility in the healthcare sector is a greater driver and employees are more likely to turn down a 76% permanent offer. 38% 37% 34% 68% 35% 67% Office–clerical and administrative staffing 66% 32% 30% 64% employees are most likely to accept an offer - three out of four (76%) employees working in this sector who received a 45% permanent job offer accepted it. This data underpins the effectiveness of staffing as a bridge to permanent employment. It also shows that while the majority of the time job offers are accepted, Overall Healthcare Industrial Office-clerical Professional- Technical, IT, there are many cases where a staffing administrative Managerial Scientific employee will turn down an offer. This is particularly important in the healthcare sector. Source: American Staffing Association (2017), ASA annual economy analysis. Staffing Success special issue 28 WEC Economic Report 2017
WORK ENABLING Has staffing employment helped you secure a permanent position? (USA) PROVIDE A STEPPING STONE The stepping stone Somewhat agree 27% effect of agency work Asked why they chose agency work, professionals in Norway Somewhat disagree 16% and in the USA offered four main reasons: it increases the chances Strongly agree 31% of finding permanent employment, Strongly disagree 26% it brings in supplemental income, it provides the opportunity to develop professional skills and it serves as a good gateway to jump- starting one’s career. Source: American Staffing Association, Harris Poll (2014) Staffing Market Survey, American Staffing Association WEC Economic Report 2017 29
PROVIDE A I believe working with the employment agency sector is a gateway to jobs with the client company or elsewhere (Norway) STEPPING STONE The stepping stone Agree 37% effect of agency work Slightly disagree 16% Strongly agree 32% Disagree 6% Not applicable 5% Don’t know 5% Source: IPSOS(2015), Survey in the employment agency sector , NHO Service 30 WEC Economic Report 2017
WORK ENABLING What has been your primary reason to work as a temporary employee? (USA) PROVIDE A STEPPING STONE Other 10% The stepping stone To supplement income effect of agency work while NOT looking for a 9% regular/permanent position Learn new skills / gain As a method of finding a regular/ work experience permanent job or because I 58% thought it might lead to a regular/ 11% permanent position To supplement income while looking for a regular/permanent position 12% Source: Staffing Industry Analysts (2016), Temporary Worker Survey: Why do temporary workers temp, and what is their preferred work status? Staffing Industry Analysts WEC Economic Report 2017 31
PROVIDE A Why are you an agency worker? (Norway) STEPPING STONE The stepping stone Don’t know 5% effect of agency work Other 12% You would have lost your job seeker’s allowance if you had not taken this job 2% You get higher wages or other benefits that you would not get otherwise 5% You don’t want a full-time job 7% You want extended time off at times 11% You want the extra income 14% You can choose your own working hours and workplace 16% You want to see different workplaces and gain all-round work experience 23% Being an agency worker is easier than getting a different kind of job 37% The employment agency sector is a good gateway to working life 40% Source: IPSOS(2015), Survey in the employment agency sector, NHO Service 32 WEC Economic Report 2017
2- Enabling Adaptation In 2016, the employment industry supported over 5 million companies to grow in a volatile business world, bringing them access to a diverse workforce, covering all sectors in particular services (43%) and manufacturing (29%). The report shows that private employment agencies engage with job seekers who possess a wide range of skills and abilities. Globally, 48% of all workers possess medium-level skills, a proportion that has remained steady compared to the previous year. As the content of the work ADAPTATION ENABLING undertaken by agency workers evolves, training has become an absolute necessity for both companies and employees. Our report finds that 32% of all agency workers gained access to training in 2016. The employment industry brings innovative solutions to training as exemplified by bipartite training funds, which offered access to training to 400 000 agency workers in 2016. 5 million The employment industry 32% covers all sectors companies especially of all agency workers gained access to gained access to a diverse workforce services (43%) training 44% WEC Economic Report 2017 33
FACILITATE Agency Work sectoral distribution WORK Other Services Manufacturing TRANSITIONS Public Administration Construction Agriculture AND SOCIAL 2% 1% 4% 11% 1% 5% 6% MOBILITY 1% 7% 2% 9% 12% 3% 14% 15% 15% 18% 14% 16% 22% 30% 27% Most agency workers 8% 39% are employed in services 50% 50% and manufacturing 10% 24% 39% 57% 17% This chart shows the distribution 55% 26% 36% 47% 53% 43% of the workforce across economic sectors around the world. In 84% 8% 57% 40% 2016, 43% of the workforce 38% 68% 10% was employed in services, 30% 1% 3% 8% 15% in manufacturing and 7% was 5% 39% active within the field of public 2% 7% administration. Although the share 70% 31% 5% 5% 11% of the labour force employed in 30% 1% agriculture still accounts for a 41% 32% 2% 46% significant part of employment 43% 40% 31% in certain countries, the global 25% 34% 28% 33% 30% number of people employed in 22% 24% 22% agriculture accounts for a mere 3% 6% 8% 18% of the employment market. 11% 10% 10% 2% 3% 5% 1% 1% 1% 1% 1% 1% 1% AR BE BR CL CO ES FR GER GR IT JA LU MX NL NO RO SP SE UK 34 WEC Economic Report 2017
Agency Work sectoral distribution - World average FACILITATE WORK TRANSITIONS ADAPTATION ENABLING AND SOCIAL MOBILITY 3% 30% 9% Agriculture Manufacturing Construction 43% 7% 8% Services Public Other Administration WEC Economic Report 2017 35
Skills required by job executed FACILITATE WORK Low 32% Medium 48% High 20% TRANSITIONS AND SOCIAL 2% 9% 9% 14% MOBILITY 15% 17% 20% 22% 20% 23% 30% 32% Two thirds of agency work is either 40% 9% medium or high skilled work. As 26% can be seen on this graph, there 37% are variations among the countries 35% 67% surveyed, however, the findings 35% show overall, agency work plays 43% an important role in helping low, 76% 55% medium and high-skilled workers 60% 50% in gaining valuable experience in the labour market. 45% 76% 60% 60% 54% 48% 42% 35% 31% 25% 20% 20% 15% 15% 8% AR BR ES GER GR JA LH MX NO RO SP SE CH 36 WEC Economic Report 2017
Quarterly evolution (year-over-year) of number of hours worked by agency workers in Europe ADAPT WORKFORCE versus quarterly evolution (year-over-year) of GDP volume EU28 TO PRODUCTION Y-o-y Evolution of GDP volume - EU28 NEEDS Agency work is a strong ADAPTATION ENABLING 3% 30% economic indicator 2% 20% Analysis shows that agency work is a 1% strong economic indicator of when the economy is recovering from a 0% 10% recession. This suggests that a sustained upturn in agency work signals the end -1% of a recession as observed from the 0% second half of 2009. Agency work is -2% also a moderate coincident indicator of when the economy is in a high growth period. Agency work is poorly -3% -10% related to GDP during a recession and a weak (though still statistically -4% significant), indicator during periods -20% of stable economic growth. In 2016, -5% the hours worked by agency workers in Europe grew by 4,4% compared to -6% -30% the previous year, while the GDP of the European Union (EU-28) was estimated Y-o-y Evolution of AW Hours Worked - Europe to increase by 1,9% compared to the previous year, showing agency work is 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 benefiting from GDP growth across the continent. WEC Economic Report 2017 37
IMPROVE Share of trained agency workers EMPLOYABILITY BY UPSKILLING Training: an essential factor in career development for an adaptive workforce Training has become a powerful 93% motivator for accepting work assignments. It benefits employers and employees alike: employers develop the skills base and competences necessary for commercial success, while 59% employees value the investment in their careers and see it as a ‘value add’ of temporary employment. 42% 32% of all respondants received training. A higher proportion of 35% temporary employees in the USA and Mexico benefited from local training programmes in 2016. Mexico USA Italy France Source: National Federations of the World Employment Confederation. The survey takes into consideration only the members surveyed by the national federations of the World Employment Confederation. 38 WEC Economic Report 2017
The contribution of private and public partnerships within Active Labour Market Policies FACILITATE UK Ireland Australia Italy The Netherlands WORK The United Kingdom launched the “Work Ireland followed the example of United Kingdom Over the past several years, Australia has cut back on Although the Italian labour market has not traditionally The Netherlands have a long-standing history and TRANSITIONS AND SOCIAL Programme” in June 2011 in 2015 launching the government involvement in implemented private and cultural policy in private aimed to get long-term programme “Jobpath”, an the delivery of employment public partnerships, the and public cooperation. ADAPTATION ENABLING unemployed people back approach to employment services by making more use Lombardia region represents The Servicepunt Flex to work. activation which caters mainly for people who are of the private sector, including private employment agencies. a virtuous exception. Indeed, the ALMP “Dote Lavoro” (SPF), an equally financed joint private and public MOBILITY long-term unemployed (over In 2015, the Australian promoted by the region body, monitors, promotes Results: 12 months) to assist them to government launched its represents a succesfull and advises on private So far, 2 million secure a job. latest Active Labour Market example of private and and public cooperation in Private and public partnerships people have Policies programme called public partnership. The the Netherlands. Due to play a key role within Active Labour “Jobactive”. providers of the programme participated in the Results: Private employment agencies are both public and private the fact that employment Market Policies (ALMP). Many services’ competence is Work Programme 17.584 long term are selected through public operators (the latter need a delegated to municipalities, States have opened their labour The Programme unemployed have tender, whilst their payment is license to operate). The Dote there is no national scheme been engaged with conditioned to a success fee: comprised a sum, calculated on private and public market policies to the employment supported 580.000 individuals in the services the higher the job’s duration, on the difficulty to employ employment services. industry, implementing successful the higher the fee (there are the individual, that can be Nevertheless, partnerships accessing work for 26% (19% full time, three tranches: 4, 12 and 26 claimed by the operators after are in place and their value programmes to put people back assignments ranging 4% part-time, 3% weeks). Agencies must meet a successful employment is fully recognized. Private to work. from 3 to 6 months a certain success threshold to outcome. “Dote Lavoro” employment agencies self-employed) of remain in the programme. has been the model used have access to jobseekers People who found participants found a job through the a job in implementing the Italian through speed job-dating, Anglo-saxon countries are scheme of the EU “Youth whilst the 70% of public Programme remain 34% of participants Results: Guarantee” programme. employment services’ offers historically the first to implement employed: on moved to an 714.460 job seekers are composed of agency private and public partnerships, average, those who work. employment engaged, 134.600 Results of the although the debate around ALMP spent between 3-6 relationship in Q3 of whom under 25 first round (2015) months in work and private and public partnerships 2015, 22% in Q4 2015 years old 82.217 « doti » Results: within a year, spent and 8% in Q1 2016, all in general, has driven many 380,000 job assigned 35% of 49 weeks in work higher rates than for placements countries to acknowledge the within the two non-participants 81% of those found unemployment proceeding years 48% of the a job beneficiaries find importance of private employment participants were a job through agencies in such schemes. 19.414 young employed three people found a private employment months later (26% job through the agencies part-time, 22% full- programme 74% remain in time) employment Source: JobPath Performance Source: Work Programme Nation� - Sources: Employment Services Source: Dote Lavoro Source: SPF presentation Data 2017 al Statistics March 2017 Outcomes Report, 2016, Labour Market Information Portal, data September 2017 / OECD slides, OECD, How Australia does it, 2012 WEC Economic Report 2017 39
IMPROVE Budget spent on training for agency workers via bipartite training funds EMPLOYABILITY BY UPSKILLING The world of work is changing. Employees are constantly being assessed on their knowledge and skills. € 367.2 mn 400,000 Surveys show there is a strong correlation between learning and Total budget Total agency workers sustained employment. Staff who trained undertake learning activities gain the ability to adapt to the changing Belgium France Italy requirements of an organisation and gain a competitive edge in Budget Budget Budget the job market more easily. The € 1.5 mn € 160 mn € 178mn employment industry established Agency workers trained Agency workers trained Agency workers trained sectoral training initiatives, adapted to the needs of the companies and 7,110 40,000 231,000 the realities of the sectoral labour market. In 2016, 400,000 agency workers were trained via bipartite Luxembourg The Netherlands Switzerland funds in 6 European countries. The total funding invested in training Budget Budget Budget amounted to € 367 mn. € 1.3 mn € 11.2 mn € 15.2 mn Agency workers trained Agency workers trained Agency workers trained 2,943 107,820 10,740 Source: National Federations of the World Employment Confederation 40 WEC Economic Report 2017
3- Enabling Security The data gathered by the World Employment Confederation shows how private employment agencies secure access to talent by adding more jobs than most industries. In the US for instance, staffing agencies hired a total of 14.5 million temporary employees in 2016. Flexibility, speed, and access to talent are among the top benefits cited by organisations making use of agency work. 1 in 3 companies use private employment agencies to receive a better quality employee, investing 22% of their HR budget on staffing firms. But the services offered by the employment industry goes beyond flexibility and provides broader qualitative outcomes. For instance, evidence shows organisations that invest in an RPO provider are able to reduce hiring costs on a year-over-year basis and improve time-to-hire. From the perspective of workers who face more and more transitions in the labour market, the innovative solutions created by the employment industry are crucial for them to maintain social security and employability in the future of work. SECURITY ENABLING In the US, 14.5 million Flexibility, speed, and 1 out of 3 companies use private employment agencies to temporary employees access to talent deliver a quality hiring, investing were hired by staffing are among the top benefits cited by organisations making use of 22% of their HR budget agencies in 2016. on staffing firms. agency work. WEC Economic Report 2017 41
SECURE ACCESS Satisfaction rates predominantly positive TO TALENT How likely are you to recommend your organisation’s primary staffing In these graphics, Staffing Industry agency/supplier? (10 = very likely) Analysts asked large companies (with 1,000 or more employees) 2% 2% 1% 1% around the globe how likely 10% 16% 23% 18% 14% 13% they would be to recommend their current supplier for various workforce solutions as a means to gauge their satisfaction level. Respondents selected a value ranging from zero to ten, with zero How likely are you to recommend your organisation’s primary MSP? (10 = very likely) indicating not likely to recommend and ten meaning very likely to 1% 1% 5% 13% 10% 13% 19% 16% 23% recommend. Regarding primary staffing agency/supplier, the average score was 7.2. Responses generally fell within the range from 5 to 10, with only 6% of How likely are you to recommend your organisation’s primary recruitment process respondents rating a score below outsourcing (RPO) provider? (10 = very likely) 5. Regarding MSP, the average score was 7.4. More than one third 11% 4% 1% 10% 16% 23% 18% 14% 13% of respondents (39%) rated either a 9 or 10. Regarding RPO providers, the average score was 6.2. While 11% of respondents gave a zero, the vast majority (85%) gave a 0 1 23 4 5 6 7 8 9 10 score in the range of 5 to 10. Source: Staffing Industry Analysts (2017), 2017 Workforce Solutions Buyers Survey Satisfaction with suppliers; comments on value of VMS and MSP. 42 WEC Economic Report 2017
Reasons for hiring agency workers SECURE ACCESS Why use a recruitment agency? (Norway) TO TALENT There are many advantages to To handle seasonal or As a supplement to hiring agency workers. They offer cyclical variations finding your own workers the opportunity to quickly hire When employees To find personnel Because you were unable to find someone with specialist skills, or to are on sick leave with the right qualified people on your own bolster a department in the short competences To find personnel for activities term. They can also bring new skill To find personnel for outside your comapny’s core project-based work business sets, which may prove beneficial Because it allows you Short-term to businesses. And given market to evaluate candidates projects volatility, short-term contractors 59% 59% provide the ideal opportunity to 50% 50% assess market shifts and future 27% 23% 23% needs and opportunities. The 18% 18% survey below was conducted by the NHO, the Norwegian SECURITY ENABLING member of the World Employment Confederation, and shows the How companies benefit from working with staffing firms (USA) main reasons why companies turn An opportunity to gauge the 'fit' before to agency work in that country. hiring on a permanent basis Flexibility to easily change the size Ability to fill of your workforce based on the positions quickly duration of the project Access more candidates Access to talents with more specialised skills 47% 41% 38% 32% 26% Source: EPSI Rating (2017), the use of staffing services in Norway. NHO Service Source: American Staffing Association, CareerBuilder, Inavero (2014) Opportunities in Staffing. WEC Economic Report 2017 43
SECURE ACCESS The advantages of using RPO TO TALENTS Companies partnering Companies with RPO with an RPO provider Other improve their talent management strategies Companies that internalise the recruitment process lose the subject-matter expertise of an RPO partner. According to research conducted by the Aberdeen group, the organisations surveyed are 33% 10,7% more likely than those that engage an RPO partner (25% vs. 22.6%) to lack an understanding 25% of what exactly is causing their skills gaps. They are also 59% more 22.5% 18% likely than companies using an RPO partner (33.3% vs 17.7%) with the inability to establish a talent pipeline for their open positions. Companies with a lack of understanding as Companies who are unable to establish to what exactly is causing their skill gaps talent pipelines for their open positions Source: Aberdeen Group (2017), Recruitment Process Outsourcing: a lifeline in the war for top talent. 44 WEC Economic Report 2017
Outplacement has an impact on business identity and growth INCREASE BUSINESS Year-over-year improvement COMPETITIVENESS Companies with outplacement While there are a variety of methods solutions in place available in keeping the workforce satisfied, an often overlooked strategy Other is properly communicating the business case for a layoff and helping impacted employees find new jobs faster. This concept is called outplacement. Research conducted by the Aberdeen Group explores the importance of both outplacement and proper SECURITY ENABLING communication during offboarding, Only 25% of and how they can have an impact on 12.5% 11.3% business identity and growth. companies have an offboarding Findings show companies with outplacement solutions improved 4% 3.4% process. their voluntary employee turnover by 18% year-over-year compared to all Best-in-class companies are others and their revenue per full-time 2.5 times more likely to use equivalent workers by 11%. Voluntary employee Revenue per full-time outplacement (55% vs 22%) turnover equivalent workers WEC Economic Report 2017 45
INCREASE RPO usage has a big impact on HR KPIs BUSINESS Year-over-year improvement COMPETITIVENESS Companies with RPO RPO: driving down Other the cost per hire and improving talent acquisition RPO can help HR with various business and employee-centric key performance indicators, from time- to-hire to employee engagement. Organisations that invest in an RPO provider are able to reduce hiring costs on a year-over-year basis by 3,3% 38%, compared with organisations that don’t outsource recruiting (3,3% vs. 2,4%) and they are able to 2,4% improve time-to-hire as well. 1,8% -0,4% Cost per hire Time-to-hire Source: Aberdeen Group (2016), Optimazing Recruitment Process Outsourcing, Aberdeen Group. 46 WEC Economic Report 2017
Primary reasons for implementing RPO INCREASE BUSINESS Improving recruitment efficiency COMPETITIVENESS Staffing Industry Analysts asked Making hiring Accommodating more scalable spikes in demand companies about their main reason(s) for implementing their primary RPO. Respondents were Reducing costs presented with the 10 options represented in this graph and could choose as many options as Improving quality they wished. The most selected of hires reasons were improving recruitment efficiency (59%), making hiring For help with Improving workforce more scalable (59%), reducing costs seasonal needs analytics (50%) and accommodating spikes in SECURITY ENABLING demand (50%). Improving Short-term workforce planning project 59% 59% Improving legal 50% compliance 50% 27% 23% 23% 18% 18% 9% Source: Staffing Industry Analyst (2017), 2017 Workforce Solutions Buyers Survey Recruitment process outsourcing (RPO); best source of hires. WEC Economic Report 2017 47
DELIVER Social benefits Training PORTABLE RIGHTS ff General or specialised AT ff Unemployment benefits training Social Innovation: How social partners in the ff Support in applying for a ff Sectoral or specialised employment industry BE loan training ff End-of-year bonus create portable social protection, learnability ff Unemployment benefits ff Training Vouchers and employability FR ff Loans and housing advice ff Working-training contracts Workers face more transitions in ff Income integration the labour market that challenge the adequacy of traditional systems of social security and skill training. ff Financial incentives for Social partners in the employment students ff Training courses provided by industry together, developed a IT ff Support in applying for a the fund: on-the-job training loan and general training variety of innovative solutions to ff Unemployment benefits create security. These bi-partite initiatives involve unemployment benefits and pensions, health ff Training vouchers insurance, access to mortgages, LU ff Allowance for loss of income maternity leave, training, etc. This snapshot provides an overview of the portable rights solutions implemented by the employment NL ff Training vouchers industry in 7 European countries in order to maintain social security and employability in the future of ff Training vouchers CH ff Allowance for loss of income work. 48 WEC Economic Report 2017
Healthcare Schemes (supplementary) Inclusion & coaching Pension (third pillar) ff Supplementary allowance in the event of sickness or accidents at work ff Supplementary healthcare ff Maternity benefits ff Accidents at work allowances ff Career guidance and training ff Supplementary pension ff Supplementary maternity and illness benefits SECURITY ENABLING ff Accidents at work allowances ff Supplementary pension ff Supplementary health insurance ff Maternity benefits ff Accidents at work allowances WEC Economic Report 2017 49
DELIVER Training benefits PORTABLE RIGHTS BE FR IT These examples provide empirical evidence of the use of social 2,213 2,620 9,254 9,049 dialogue in the agency-work individual training leave professional development professional training on-the-job training granted: contracts put in place: sector in several European 1,592 86% led to a job programmes programmes reaching countries. These outcomes show 77% led to a job implemented: among 11,422 participants training courses delivered 119,158 training how in the agency sector a myriad 416 1,513 participants, 5,732 7,112 skills assessment occupational integration 30% compentecy-based of rights are created in the field participants in 2016 leave granted contracts implemented: 81% training programmes led to a job found a job afterward of skills development, pension, reaching 8,712 healthcare, disability, housing, 87% 132 7,040 participants remain in employment validation of prior 6,518 general training childcare, and other forms of afterward professional experience professionalisation periods programmes organised granted to maintain workers social benefits. The diversity of (VPE) programs employability through work- reaching 87 936 implemented participants these instruments is vast and study programmes: the portability of social security 5,238 87% success rate professional training benefits is mainly confined in contracts signed those countries where a sectoral social dialogue is in place and Social benefits and supplementary healthcare dedicated agency-work collective agreements exist. FR IT Services provided to 83,000 6,000 2,150 agency workers were 36,900 beneficiaries of agency workers by mobilising agency workers have rented a granted a loan in order to buy supplementary health insurance house thanks to FASTT warrants a vehicle, 962 of which were schemes € 20 million microloans FASTT provided support in house 4,911 57,600 agency workers hunting to childcare solutions were provided 1 million agency workers supported in getting a loan or to agency workers have benefited from a mortgage 9,900 supplementary health insurance agency workers 6,000 fund 2,400 beneficiaries of vehicles were rented at reduced cost childcare support 50 WEC Economic Report 2017
4- Enabling Prosperity Private employment agencies create decent jobs for all and more opportunities to participate to the jobs market. Evidence provided by the members of the World Employment Confederation shows agency work acts as a stepping stone from unemployment to work in the long term: 12 months after starting an assignment via agency work, the share of unemployed persons dropped by 15% in Norway and by 23% in Mexico. Agency work is a particularly important means of labour market insertion for resettled refugees in Germany, where 20% of refugees who found a job did so via a private employment agency. Finally, private employment agencies ensure prosperity by playing an expending role for economies. In the US for instance, agency work and direct recruitment sales revenue increased 1.8% to $150 billion in 2016. NO MX 12 months after starting an In Germany, 20% In the US, agency work and direct recruitment sales assignment via agency work, the share of refugees of unemployed persons dropped by found a job via a private revenue increased 15% in Norway and by employment 1.8% to $150 23% in Mexico. agency billion in 2016 PROSPERITY ENABLING WEC Economic Report 2017 51
REDUCE These bipartite funds allocate funding to reintegrate unemployed vulnerable groups into the jobs market UNEMPLOYMENT Shaping inclusive BE IT FR NL workplaces through training The employment industry has put in place a concrete set of actionable training measures to improve the employability of workers, help the long-term In Belgium, job In Italy, the In France, the FAF.TT In the Netherlands, job unemployed return to work and seekers who require “PAL Tempo provides an seekers who are under include the most vulnerable immediate training Indeterminato” “operational strategy 28 years old and fall workers in the jobs market. before starting a and “PAL tempo for employment” that below a certain level Bipartite training funds in Belgium, new assignment or determinato” aims to reintegrate of education can France, Italy and the Netherlands temporarily inactive programmes aim job seekers into apply for a training offer training that can help the individuals willing to increase the the French labour voucher worth 500€ unemployed gain the skills they to reintegrate the employability of the market, via a training and follow the training need to get back to work. jobs market via most vulnerable programme designed of their choice. agency work are groups excluded to fit the needs of eligible to apply from the Italian organisations. 6,200 to the Learn4Job labour market: the training sessions were programme. young, the long- delivered in 2016. Candidates receive term unemployed targeted training to and migrants. Both ensure the provision programmes reached of relevant skills. 3,000 participants in 2015. 52 WEC Economic Report 2017
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