Spring is a time for growth, a natural phenomenon reflected by nature, as well as in the economy, which fortunately is on its way to recovery again after the economic downturn that started in 2008. A budding economic growth means the employment and recruitment market is picking up at an increasing rate today.
It is well-known that there is a strong correlation between the share of flexible labor and economic growth, particularly with respect to agency work: an HR service known as staffing in the US or dispatch of workers in Japan. Flexible labor is the first type of employment that recovers when the economy stabilizes after a crises. The opportunity to offer agency work even accelerates economic growth and significantly contributes to job creation. New jobs are blossoming in the era of recovery, but it is often not known yet whether the new or increased business activities are sustainable. Agency work is the natural answer to that demand.
Ciett, the international confederation for the HR services industry, has recently published its annual Economic report. For the first time this year, data was collected for the HR industry as a whole, including such services as agency work, search & selection, RPO and outplacement. The latest figures, from 2013 and 2014, demonstrate that the total global sales revenue for the entire employment and recruitment industry is E415 billion, of which agency work accounts for E282 billion and other HR services now for E 132 billion. This segment is growing, reflecting the increasing need for diversity on the labor market.
Our industry is truly a people's industry: a total number of 60.9 million workers gained access to the labor market via our worldwide services in 2013. About half of these employees were under 30 years of age. This, already staggering figure will most certainly show a further increase in 2014 and 2015.
However, looking at agency work, which in terms of facts and figures, is the most researched, the penetration figures are actually quite modest. The penetration rate is the percentage of the working population that works as an agency worker on a given day. On a global level we are talking about 1.6% on average in developed labor markets. The big 3, US, Japan and Europe which account for more than 70% of global turnover, show penetration rates of 2% in US and Japan and 1.7% in Europe.
The Ciett report also emphasizes the added value, the positive contribution of agency work to well-functioning labor markets. Employment and recruitment agencies enhance transparency on the labor market, they are ideally positioned to better match demand and supply, decreasing the so often mentioned global challenges of increasing skills mismatches; driven by qualitative and quantitative shortages and surpluses. Higher mobility by quality transitions will support dynamic, healthy labor markets. Agency work in particular plays an internationally recognized key role by facilitating such transitions from inactivity to economic activity: by providing young people with a decent first job, by bringing back unemployed people to the labor market, by providing practical, hard and soft skills training, and finally: by providing for work and employment conditions that are on par with any other decent form of work.
So let's enjoy the springtime and the growth that comes along, both in increasing work opportunities and in nature!