Economic Report 2020

About the World Employment Confederation
The World Employment Confederation is the voice of the private employment services industry at a global level,
representing national federations as well as workforce solutions companies from across the world. Members of theWorld Employment Confederation represent a wide range of HR services, including agency work, direct recruitment,
career management, Recruitment Process Outsourcing (RPO) and Managed Service Provider (MSP).
The World Employment Confederation works to broaden recognition of the positive economic and social role which
the private employment services industry plays in enabling work, adaptation, security and prosperity. This work involves
building networks with relevant stakeholders such as policy makers, social partners and the academic world; settinghigh recruitment and employment standards and practices; acting as a thought-leader shaping futureproof andcompetitive labour markets and providing strategic data on employment issues.
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.

Contents
Foreword

02

Overview of Private Employment Services
Key Findings

03
04

Private Employment Services Industry

05

HR services
Agency Work
Direct Recruitment
Career Management
MSP
RPO

10
18
19
20
21

Regional focus
North America
South America
Europe
APAC

22
23
24
25

Glossary

26

Methodology

27

WEC Economic Report 2020|1

Foreword

The private employment services industry continued to grow on a global level in 2018,
despite a deteriorating economic backdrop across many countries. While global tradetensions, skills shortages and economic slowdown in some markets contributed to a difficult
environment for the industry, most of the service segments considered in this report havenevertheless, experienced positive growth.
Overall, the private employment services industry saw an increase in global turnover of nearly
two percent, reaching € 473 billion. Direct recruitment and RPO in particular have once again
experienced the strongest growth. The global agency work sector – contributing the major
share of turnover for the industry – saw only marginal growth in 2018, although this is largely
due to exchange rate variations between the dollar and the euro. On a constant currency
basis, the agency work industry has expanded by more than three percent in 2018, in linewith International Monetary Fund global GDP growth estimates for the same year.
Around 160,000 agencies in 39 countries across the world placed a record-high numberof individuals in jobs – nearly 58 million in 2018 – contributing to more efficient labour
markets worldwide.
This contribution goes beyond getting people a job. To understand the positive value that the
global private employment services industry creates for both workers and society in general,
we encourage you to also consult our Social Impact Report. While the Economic Reportoffers an assessment of the status and trends within the global private employment services
industry, the Social Impact Report gives readers additional insights into how the industry
crafts innovative and socially inclusive solutions to address the challenges of the changing
world of the work.
Happy reading!

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WEC Economic Report 2020

Denis Pennel
Managing Director

Even Hagelien
Chair of the Economic
Affairs Committee

Private Employment Services
Overview of the private employment services represented in this reportManaged Services
Providers
Agency Workis a triangular employment relationship,
defined in ILO Convention 181 as: “Services
consisting of employing
workers with a view tomaking them available
to a third party, who may
be a natural or legal person (“user enterprise”)
which assigns their tasks
and supervises the execution of these tasks“.

MSP is a service whereby
a company takes on
primary responsibility for
managing an organisation’s contingent
workforce programme.
Typical responsibilities of an MSP include
overall programmemanagement, reporting
and tracking, supplierselection and management, order distribution
and often consolidated
billing. An MSP may or
may not be independentof a staffing provider.

DirectRecruitment
Services for matchingoffers of and applications for employment,
without the private
employment agency
becoming a party to theemployment relationships which may arise
therefrom (Source:
ILO Convention 181),
including executive
search & selection.

CareerManagement
Recruitment
Process
Outsourcing
A service by a thirdparty specialist provider,to assume the role ofthe client’s recruiting
department by owningand managing part or
all of its recruitment
process and related
recruitment supply
chain partner relationships, provide the necessary skills, activities,
tools, technologies, andprocess methodologies.

Services which enable
jobs, skills and businessperformance to beviewed in an integrated
way and with a longterm perspective. It
includes primarily
services such as
outplacement andcareer transition,
redeployment andother development
activities designed tohelp organisations
and individuals tomanage changes in thepractices, processes,
conditions and basis of
employment.

WEC Economic Report 2020|3

Key Findings

The global private employment services industry reached an estimated market value of € 473 billion in 2018 – up nearly
2% compared with 2017. The total global agency work industry (including agency work revenues generated througha Managed Services Provider) represents 80% of the entire industry and sales revenues remained unchanged fromthe previous year at € 377 billion. MSP and RPO services grew by 2.8% and 8.4%, reaching market values of € 119
billion and € 4.6 billion respectively, while the global direct recruitment market expanded by 5.4% in terms of sales
revenues, amounting to € 63 billion.
Agency work is the largest segment of the private employment services industry and its market is quite concentrated
at global level, with the three largest markets (USA, Japan, UK) accounting for the majority of sales revenues (54%).
Flat growth in the global industry in 2018 in euro terms is partly explained by the currency depreciation against theeuro in some of the largest markets, resulting in negative growth rates in countries where growth in local currency
units was already slow (e.g. USA, Japan, Australia, Canada, Brazil). With the exception of Germany, where the market
declined slightly (-0.6%), agency work markets in Europe fared relatively well, with the Netherlands (+14.6%) and
Switzerland (+6.2%) achieving particularly strong growth1.
Growth in the MSP market has been strongest in Europe, the Middle East and Africa, with sales revenues up 13.7% in
2018. Global market growth was slowed down by subdued growth in the Americas, including the USA which represents more than 50% of the global MSP market.
Direct recruitment fared well in 2018, with nearly all the major markets having expanded. China and the UK saw
particularly pronounced growth in their respective direct recruitment markets, up 15.2% and 12.6%.
The share of agency workers within the overall employed population remained unchanged at 1.6% at global level.
With seven markets featuring in the top ten highest agency work penetration rates, the share of agency workers ishighest amongst European countries, with the UK (3.4%), the Netherlands (3.3%) and France (2.9%) taking the top
three slots. Outside Europe, Australia, the USA and Japan also showcase a high share of agency workers, 2.7%, 2.1%
and 2.0% respectively. Overall, almost 160,000 private employment agencies, with 2.4 million internal staff, placednearly 58 million people in labour markets across the world, the vast majority through agency work.

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WEC Economic Report 2020

1

For the UK, Europe’s largest agency work market, annual industry growth could not be assessed due to a change in methodology.

Private Employment Services Industry
Private Employment Services Industry Global Market
2018: €473bn
Agency Work: €377.2bn

80%

Top 5 Markets (sales revenues)
2018: €303bn

DirectRecruitment:€63.4bn64%

13%

of global revenues

In 2018, the private employment services industry is estimated to havereached global sales revenues of € 473.3 billion.

...through an agency €284bn

60%

MSP
€26.3bn
6%...through an MSP €93.2bn

20%

RPO: €4.6bn
Career Management: €1.9bn

1%Note: Statistics gathered from WEC national federations and Staffing Industry Analysts. Around 78% of MSP
activities fall under agency work. This is represented in the split of agency work revenues.

1

Based on own calculations using statistics from Staffing Industry Analysts

The agency work sector represents the largest share of total sales revenues,
having contributed an estimated € 377.2 billion (80% of total industry sales
revenues). While overall MSP sales revenues are estimated to have reached €119.5 billion in 2018, MSP activities which exclude agency work have probably
only contributed some € 26.3 billion, around one fifth of total MSP spend (6%of the industry).
Direct recruitment reached an estimated € 63.4 billion across the world (13%of the industry), while RPO is estimated to represent € 4.6 billion in sales revenues (1%). The career management industry remains relatively small with revenues at around € 1.9 billion worldwide.
While the estimates in this report only include countries that are members of
the World Employment Confederation, the combined market share of thosecountries in the global market is close to 100% 1.

WEC Economic Report 2020|

5

PRIVATE EMPLOYMENT SERVICES INDUSTRY

Nearly all service segments experience positive market growth
Global sales revenues of private employment services: 2017

| 2018% change2017 | 2018

Career management€1.9bn-5%

RPO€4.6bn+8.4%

Direct recruitment

MSP (including
agency work
activities)

Agency work
(excluding MSP
activities)

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WEC Economic Report 2020

+5.4%

€63.4bn+2.8%€119.5bn€284.0bn+0.8%

Note: Statistics gathered from WEC national federations and Staffing Industry Analysts.

PRIVATE EMPLOYMENT SERVICES INDUSTRY

Global sales revenues for the private employment services industry grew by 1.9% in euro terms in2018 1. This represents a slowing of industry growth compared with the previous year and can be
partly explained by an economic slowdown and tightening labour markets in some of the global
agency work industry’s largest markets.
While the growth in agency work revenues at global level was small in 2018 (+0.8%), other service
segments experienced more pronounced growth. MSP and RPO spend was up 2.8% and 8.4%
respectively. Revenues from direct recruitment gained 5.4%, whereas the career management
industry contracted by 5.0%.
Low growth in the private employment services industry in euro terms in 2018 was also due toan appreciation of the euro against other currencies in that year, as well as subdued growth insome of the largest agency work markets. The USA alone represents one-third of global agency
work sales revenues and the three largest markets (USA, Japan and UK) make up the majorityof the global market. While the US market grew in dollar terms (+3.5%), it contracted by morethan one percent in euro terms. Several countries in South America have experienced a drastic
currency devaluation due to economic crises, resulting in a significant contraction of the agency
work industry in euro terms.
The USA, Australia and China make up two-thirds of global sales revenues in the direct recruitment sector. Their combined markets grew by 5% in 2018, driving much of the industry’s growth
at global level.

1 On a constant currency basis, the global private employment services industry grew by an estimated 4.9%.

+1.9%
y-o-y

€473bnGlobal private
employment
services industry
2018
Agency work
Direct recruitment
Career management
Recruitment Process
Outsourcing
Managed Services
Providers

WEC Economic Report 2020|

7

PRIVATE EMPLOYMENT SERVICES INDUSTRY

The network of labour market enablers continues to growTemporary work agencies
In 2018, more than 157,000 private employment agencies werein operation with branches across the globe, based on figuresfrom 39 of the World Employment Confederation’s national
federations members.
More than 2.4 million employees are working in agency branches
around the world (based on figures from 29 countries).1

PrivateEmployment
Agencies:

Direct recruitment agencies

157,200

Managed Services Providers
Recruitment Process Outsourcing

Considering those countries for which figures were available forboth 2017 and 2018, the number of agencies operating was up
4.6% in 2018 compared to the previous year. Simultaneously,internal staff grew by a little over 1%. As automation of businessprocesses is becoming increasingly prevalent, this could be
an underlying factor explaining the difference in growth rates
between the number of agencies and staff.
These agencies provide client companies and workers withvarious HR services including agency work, direct recruitment,
career management, MSP and RPO. Complementing the public
employment services, they contribute to well-functioning labour
markets by matching employers with jobseekers.
The majority of agencies are in Europe, followed by Asia-Pacific(APAC), North America and South America. For more regional market
information, consult the “Regional Focus” section of this report.

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WEC Economic Report 2020

Career management firms

Internal Staff:

2.4
MILLION

1

Real figures are most likely higher, as statistics for all countries were not available.

PRIVATE EMPLOYMENT SERVICES INDUSTRY

Nearly 58 million people are placed in jobs in 2018
Agency work headcounts 2018

USA

16,800,000

China

10,780,000

Japan

3,819,197

Nearly 58 million1 individuals were placed in jobs at client companies in 32 countries around the world through the services
provided by temporary work and direct recruitment agencies – a year-on-year increase of 9%.

India

3,300,000

Mexico2,983,414

Compared to the growth in private employment services industry’s sales revenues at global level – close to five percent after
correcting for currency fluctuations – this increase in placements is relatively high. One explanatory factor could be theincreasing pressure on private employment agency margins. Nearly half of recruitment firms report pricing pressure as a top
operational challenge, according to a study by Bullhorn 2.

Brazil

2,925,000

France2,745,000

UK*

1,105,000

Germany*

1,000,520

Portugal

879,000

Netherlands

834,790

Italy

800,000

Poland776,144Spain

757,607

Belgium

684,031

Canada625,000

Colombia

457,524

Switzerland

408,819

Australia

351,300

Chile

200,000

Sweden195,800

Austria

96,101

Norway84,260Finland56,000

Ireland53,400Romania

50,093

Argentina

47,956

Greece41,100

New Zealand

40,600The vast majority of placements took place within the agency work sector, which by itself has filled nearly 54 million vacancies. The USA – the largest market by sales revenues – contributed the highest number of placements, with nearly 17 million
individuals employed, up 8% from 2017.
The highest number of placements through direct recruitment services was reported in China, with nearly 1.7 million people
having been placed in the labour market which is relatively more centred around open-ended employment.

Number ofpeople placed byprivate employment
agencies globally:

57.7
MILLION

Numberof placements
through direct
recruitment:

Numberof placements
through temporary
work agencies:

3.8

53.9

MILLIONMILLION

Russia22,615

Croatia

17,000Estonia

5,000* FTEs1

Real figure is most likely higher, as statistics for all countries were not available. 2 Global Recruitment Insights and Data (GRID): www.grid.bullhorn.com/key-findings/

WEC Economic Report 2020|

9HR SERVICES

USA, Japan and UK represent most of global agency work revenues
4.3
37.7

5.0

16.5

6.2

34.3

22.1

8.1

5.4

11.0

117.3

4.3

4.5

Top 15 agency work markets, sales revenues (billion €), 2018

10

|

USA

Japan

UK

Germany

FranceAustralia

Netherlands

Italy

Switzerland

Belgium

Spain

CanadaBrazilSweden

India

117.3

49.9

37.7

34.3

22.1

17.5

16.5

11.0

8.1

6.2

5.4

5.0

4.5

4.3

4.3

WEC Economic Report 2020

Note: Statistics gathered from WEC national federations and Staffing Industry Analysts. Figure for the Netherlands is an estimate based on CBS figures.

HR SERVICES

In 2018, the 15 largest agency work markets represented 91% of the total global industry in terms of sales revenues.
The top three markets alone made up the majority of the global market. By far the largest market remains the USA,
followed by Japan and the United Kingdom.

49.9

The US agency work market grew by 3.5% in dollar terms, but decreased by 1.2% in euro terms, due to an appreciation of the euro in 2018. Similarly, the Japanese market, while having barely moved in local currency units, actually
decreased by 4.2% when applying the exchange rate.1 Due to a change in methodology, a calculation of the UK
market growth was not possible.
While the top three markets are diverse in terms of regional geography, nine out of the 15 largest markets are locatedin Europe. With the exception of Germany, which experienced a modest decline in the agency work market, theremaining European markets all experienced growth in 2018. In the Netherlands, growth was particularly strongat nearly 14.6% year-on-year.2 The Swiss market also grew at a double-digit rate, at least in terms of local currency.
Markets in France, Italy, Belgium, Spain and Sweden are up by 5.7%, 3.5%, 5%, 4.0% and 5.8% respectively – confirmingstrong growth in Europe’s agency work markets overall. In the Asia and Pacific region, Australia experienced strong
growth in dollar terms (6.1%), which depreciated to -1.3% in euros, while the Indian staffing market saw flat growthin 2018. The Canadian market mirrored the US market in terms of growth. In South America, agency work markets
declined on average, reflecting the worsening state of economies. In particular, the Brazilian agency work market
was down by 27.4% in 2018.
When taking a longer term perspective the data shows that all the current top 15 agency work markets experienced
positive growth between 2015 and 2018.3 Taking into account more recent data on agency work activity in European
markets, the positive trend has diminished across several countries in 2019. As the economic situation deteriorates
and the skills shortage faced by both employers and recruitment agencies becomes increasingly pronounced, datashows a downward trend in terms of revenues as well as in hours worked in the agency work sector.4

17.5

For conversion of revenue figures into euro terms, the OECD annual average exchange rate was applied.
ABU estimate based on CBS figure.
Excluding the UK, as a direct year-on-year comparison was not available for 2018.
4
For more information, visit the WEC-SIA European Employment Barometer:
www2.staffingindustry.com/eng/Research/Research-Reports/Interactive-Research-Tools/European-Employment-Barometer
1

2
3

WEC Economic Report 2020|

11

HR SERVICES

Global agency work penetration rate remains stable at 1.6%
Agency work penetration rate, 2018 %
3.4

3.3

2.9
2.7
2.5

2.4
2.2
2.0

2.0

2.0

2.0

2.0

1.6

1.6

1.5

12

|

FR

AU

BE

WEC Economic Report 2020

DE

IE

US

JP

CH

SE

AT

IT

FI

NZ

GLOBAL AVERAGE %

1.6

1.1
0.8

NL

2.1

1.4
1.1

UK

EUROPE AVERAGE %

CN

PL

NO

DK

0.8

ES

0.7

CZ

0.6

EE

0.5

0.5

BR

GR

0.4

HR

HR SERVICES

In 2018, the global weighted average agency work penetration rate stood at 1.6%, unchanged from the previous year,
while the European penetration rate was 2.1%. This rate represents the share of agency work in overall employment
and can be subject to various factors. Regulation characteristically plays a significant role, as more restrictive labour
market regulation results in a lower share of agency work in the employed population. More liberal labour markets,or regulation that is more favourable to diverse forms of work tends to raise agency work penetration rates.
This is evident in the penetration rate figures across markets, where Anglo-Saxon countries – typically characterisedby more liberal labour markets – comprise four of the top ten countries. The UK tops the list with the highest shareof agency workers and is closely followed by the Netherlands. For the latter, the prominence of diverse forms ofwork is a way of life for many workers to enhance work-life balance.
A high agency work penetration rate is a good indicator of how flexible a labour market is, as agency workers tend tomove between jobs more frequently. Flexibility in the US labour market, for example, is evident in the high numberof transitions relative to other countries.
Of note is the penetration rate in Germany, up half a percentage point since 2017, which can be partly explained by
the increased number of migrants and refugees who have disproportionally entered the labour market through theagency work sector.

Note: For UK, a comparison with the 2017 rate is not possible, due to a change in methodology. For Ireland, the figure is an estimation. For the Czech Republic, the figure is for 2017.

WEC Economic Report 2020|

13

HR SERVICES

Agency work penetration rates correlate with country competitivenessAgency work penetration rates against WEF Competitiveness Index, 2019
90

85

FinlandWEF Competitiveness Index score

Denmark
80

NorwaySwitzerland
SwedenNew ZealandEstonia

Czech Rep.

IrelandNetherlands

UK

Australia

China

FranceLuxembourg

Belgium

Italy

Chile

70

R² = 0.5343
Australia

Austria

Spain
75

USA
Japan

Portugal

PolandLithuania

65

GreeceRomania

Colombia
BrazilCroatia60

South Africa

MoroccoArgentina

55

50
0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Agency work penetration rate (%)

Comparing agency work penetration rates against country scores in the World Economic Forum’s (WEF) Global Competitiveness Index reveals a close correlation. This indicates that countries with a higher share of agency workers tend
to be more competitive at an international level.

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WEC Economic Report 2020

Source: WEC national federations and WEF 2019.

HR SERVICES... and with efficient labour markets
Agency work penetration rates against WEF labour market efficiency index, 201985

80

Switzerland

WEF Labour Market Efficiency Index score

Denmark

New Zealand
NorwayLithuania

UK

Ireland75

70

R² = 0.3254

USA
Luxembourg

GermanyJapan

FinlandSwedenEstonia

Netherlands

Australia
Austria65

Romania

Czech Rep.

Chile

Spain

60

PolandColombia

55

GreeceMorocco50

China

FranceItaly

MexicoCroatia

Belgium

Portugal
South Africa

BrazilArgentina

45
0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Agency work penetration rate (%)

Similarly, countries with higher shares of agency workers in employment tend to have more efficient labour markets
when comparing penetration rates against WEF labour market efficiency index scores.

Source: WEC national federations and WEF 2019.

WEC Economic Report 2020|15

HR SERVICES

New data indicates towards reduced agency work activity in Europe
Evolution of number of hours worked by agency workers in Europe (y.o.y.) versus quaterly evolution of GDP volume EU28
30

6

Y-O-Y Evolution of GDP volume - EU28

Y-O-Y Evolution of AW Hours Worked - Europe

4

20

2

10

0%

%0

-2

-10

-20

-4

-6

-30
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008

2009

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010

2011

2012

2013

Historically, the agency work sector tends to follow the economic cycle very
closely. Economists often use agency work sector indicators to gauge the state of
the economy, as activity in the sector reacts very quickly to fluctuations in demand.
Since the end of 2018, a reversal of the formerly positive correlation between thechange in hours worked by agency workers and GDP change in the EU28 can beobserved in the data. While GDP growth has slowed over recent years, it remains
positive. Year-on-year change in agency work activity has, however, turned negative.

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WEC Economic Report 2020

2014

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2015

2016

2017

2018

2019

Slow economic growth, reduced demand and low unemployment rates acrossseveral European countries – the EU28 rate having reached a record-low in 2018 andstill falling – can be explanatory factors in this development. As labour markets tighten,
it becomes increasingly difficult for businesses to find candidates to hire, while forprivate employment agencies there are challenges in being able to supply workers,
with the result that agency work activity decreases. 77% of recruitment firms view theskills shortage as the biggest challenge for their business in the current year, according
to a study by Bullhorn, while candidate acquisition is a top priority for them 1.

Source: WEC national federations and Eurostat | 1 Global Recruitment Insights and Data (GRID): www.grid.bullhorn.com/key-findings

HR SERVICES

Agency work sectoral trends mirror those of overall employment
Sectoral distribution of agency workers across regions (%)
GlobalEurope3224Southern
Europe**EasternEurope***

APAC

1

2 6

2 21

1

5

4

9

Central & Northern
Europe*
5

29

42

36
41

27

54

50
9

15
24

65

37

13

15

2

39

Latin & SouthAmerica

54

22
4

47

3

13

6

3

2

Agriculture

Manufacturing

Construction

Services

Public Admin.

Other* Austria, Belgium, Denmark, France, Germany, Netherlands, Norway, Sweden, Switzerland, ** Greece, Italy, Portugal, Spain, *** Croatia, Czechia, Estonia, Poland, Russia

At a global level, the majority of agency workers are employed in the services
industry (50.2%), while nearly one-third work in manufacturing. The construction
sector is the third largest agency work sector, although it comprises only 6% of
global agency work employment. Just over 3% of agency workers are employedin the agricultural sector.
While there are regional differences, the sectoral distribution of agency workers
reflects the trends within the overall employed population. That is the shift ofeconomic activity away from traditional sectors such as agriculture, towards
the services industry. This is particularly true for developed countries. 65% of
employment in OECD countries is in the services industries, 6% in construction
and only 4% in agriculture.1 The picture looks very similar in the European Union.2
If countries were to be classified into three groups of economic development

1

OECD database 2 Eurostat.

level, the other two groups would be developing countries on the one hand andfrontier countries on the other. For the former, agriculture is still a large contributor
to the economy, while the latter has generally seen a shift towards manufacturing.
Looking at the various regions, they follow the global trend with services andmanufacturing being the largest sectors employing agency workers. There are
noteworthy observations, however. In Eastern Europe, the manufacturing sector
represents two-thirds of agency work employment, which is a share twice as large
as that for Central & Northern Europe and Southern Europe.
Across the Atlantic, in Latin & South America, the agricultural sector remains a large
proportion of agency work employment at nearly 13%, around four times larger
than the global average.

WEC Economic Report 2020|17

HR SERVICESAPAC region grows fast, while USA remains largest direct recruitment market
Top 15 markets in direct recruitment, sales revenues (billion €), 2018
24.1

The global direct recruitment market grew by an estimated 5.4% in 2018 compared with the previous year, reaching€ 63.4 billion in sales revenues. The six largest markets remain the same as in the previous year, with the USA again
topping the list at € 24.1 billion – equivalent to 38% of the global direct recruitment market. The combined size of the
US and the Australian direct recruitment industries represents the majority of the global market.
By region, Europe and APAC saw the strongest growth in direct recruitment in 2018, up 7.2% and 7.6% year-on-year
respectively. In Europe, this was largely driven by double-digit growth in the UK direct recruitment market, while 15.2%
growth in the Chinese direct recruitment market in 2018 drove development in the APAC region.
The US market, representing 98% of the direct recruitment industry in North America, was solely responsible for theregion’s 2.9% growth.
In South America, the direct recruitment industry contracted by 13.1%. This was however from a small base, as the
combined market stood at a mere € 0.34 billion in 2018. Economic crises and currency depreciation across theregion played a role in the market developments in euro terms.

9.6
7.6
6.2

3.4

18

0.3

0.4

0.5

0.5

0.6

0.6

0.6

0.7

FinlandNetherlands

South
Korea

Spain

South
AfricaSwitzerland

Italy

India

|

WEC Economic Report 2020

4.2

1.1

New
ZealandJapan

GermanyUK

China

Australia

USA

Note: Statistics gathered from WEC national federations and Staffing Industry Analysts. For Germany, figure is for 2017.

HR SERVICES

Career management sector contracts in most of the largest markets
Top 10 markets in career transition/outplacement, sales revenues (billion €), 2018

0.60

0.33

0.20

0.19

0.13

0.10

0.09

0.08

0.08

0.08

USA

FranceNetherlands

Japan

UK

Germany

Australia

SwedenBelgium

CanadaIn 2018, sales revenues from career transition and outplacement services – the major share of the career management industry – declined to an estimated € 1.9 billion at global level, down by 5% from € 2 billion in 2017. While the
USA is by far the largest market for this service segment of the private employment services industry, representing
nearly one-third of the global market, Europe is the region with the largest combined market size. Six of the tenlargest career transition and outplacement markets are located in Europe. The ten largest markets represent above
90% of the global career management industry.
Note: Based on estimations by members of the World Employment
Confederation’s Career Management Task Force. For France, Australia
and Belgium, figures should not be compared to 2017 figures published in the 2019 WEC Economic Report, as there was a change inthe methodology for calculating the market estimates of 2018.

A shift towards increased internal redeployment among companies, as well as a recent labour reform in France
and the lengthy Brexit negotiations are likely underlying factors resulting in the overall contraction of the careertransition industry. Tighter labour markets, with record-high employment rates being recorded across regions may
also be a factor.

WEC Economic Report 2020|

19

HR SERVICESEMEA records strong MSP growth, while Americas slips in euro terms
Managed Services Providers, regional market value (billion €)Americas

EMEA

Firms which specialise in MSP are third-party service providers taking
over a client company’s contingent workforce management (for amore detailed definition of MSP, consult the Annex).

APAC

10

10

42

37

9

In recent years, MSP adoption by companies has grown significantly,
as firms aim to optimise their workforce planning in order to be able
to focus on their core business activities. According to estimatesfrom Staffing Industry Analysts (SIA), global spend on MSP between
2015 and 2018 grew from € 94.7 billion to € 119.5 billion, up 26.2%.
The strongest growth in MSP spend was seen in the EMEA and
APAC regions, up 42.4% and 40.9% respectively in three years, while
MSP spend in the Americas, which represents the majority of global
spend, decreased slightly in 2018 in euro terms, although there was
growth in dollar terms.

33

7
30

69
63

The major share of MSP spend (78% in 2018 according to SIA)
comprises temporary employees and independent contractors,
meaning that the spend of a large part of MSP programmes can,in effect, be attributed to revenues in the agency work sector. The
remaining share of MSP spend is raised by statement of work and/or
outsourcing activities managed by the service provider.

67

59

MSP programmes may be under a master supplier model (i.e. the
MSP disproportionally allocates staff orders by the client to itself),
a vendor-neutral model (i.e. the MSP allocates staff orders to those
staffing firms which best fit the client’s criteria) or a hybrid model. The
largest share of MSP spend (49% in 2018 according to SIA) represents
vendor-neutral models for sourcing temporary employees.

2015

20

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2016

2017

2018

Of growing prevalence are MSP contracts which include RPO
services (recruitment process outsourcing) through which a clientdelegates the supervision of recruitment beyond its contingent
workforce to the service provider.

Source: Staffing Industry Analysts.

HR SERVICES

RPO sees strong growth across regions
Recruitment Process Outsourcing, regional market value (billion €)North America

RPO is a service whereby a third-party provider takes over a client’s
recruiting department. Going beyond the provision of a contingent
workforce, RPO providers characteristically also specialise in recruiting a firm’s direct employees, without remaining a part of the resulting employment relationships (for a more detailed definition of RPO
consult Annex).
The global RPO market remains small relative to other segments ofthe private employment services industry in terms of revenues (e.g.
agency work or MSP), having reached an estimated € 4.6 billion in
2018. RPO has, nonetheless, experienced significant growth since2015, both globally and across regions. North America and EMEA,
the two largest regions by RPO market value, have grown by 39.9%
and 38.8% in euro terms between 2015 and 2018 respectively, while
Latin America’s RPO market has nearly doubled, albeit from a muchsmaller base. Overall, the global RPO market grew by 36.6% over thesame three years.
As labour market slack reduces, with unemployment rates down
and employment rates up, firms increasingly struggle to hire skilledworkers. This can explain why firms turn to specialists to manage
their hiring process, resulting in increased usage of RPO providers, which offer more effective ways to attract talent. A study by
CieloTalent found a 12-percentage-point difference in the numberof firms that report a negative impact of the skills shortage on theirbusiness between those firms that use an RPO and those that do not.
While, according to a survey by Staffing Industry Analysts, the vast
majority of RPO contracts are ongoing (as opposed to those which
are designed for specific projects on a shorter term), only around
one-quarter of the RPO market represents arrangements where the
RPO provider manages a client’s entire recruitment process.

EMEA

APAC

Latin America

0.2
0.9
0.1
0.1

0.9
1.4

0.7
1.1
1.0

2.0
1.7
1.5

2015

Source: Staffing Industry Analysts. Note: No figures for 2017 available. 2017 growth is estimated at 13% by Staffing Industry Analysts.

2016

2018

WEC Economic Report 2020|

21

REGIONAL FOCUS

North America sees record number of placements driven by US market

Countries included in figures:

Placements

20.4

PrivateEmployment
Agencies:

21,400Internal
Staff

401,800

CanadaMexicoUSAMILLION

Agency Work Revenue

MSP Revenue€123.8€69.3

BILLIONBILLION

Direct Recruitment
Revenue€24.5
BILLIONRPO Revenue€2.0
BILLION

North America is the strongest region in the global private employment services industry by various metrics. The
region places more people in jobs and generates higher sales revenues through MSP, direct recruitment and RPO
services than any other region. The major share of the region’s contribution to the industry is in the USA, where morethan 80% of the region’s placements are created and nearly 99% of both agency work and direct recruitment sector
sales revenues are generated. The agency work market in all three of the region’s countries has contracted slightly ineuro terms in 2018 but is up over a three-year period.

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Note: Statistics gathered from WEC national federations and Staffing Industry Analysts.

REGIONAL FOCUS

Declining Brazilian market leads to stagnation in South America

Countries included in figures:

PrivateEmployment
Agencies:

Argentina

Placements

Brazil

3.6

Chile
Colombia

Internal
Staff

139,900

6,300

MILLION

Peru

Direct Recruitment
Revenue

Agency Work Revenue

€6.6

€0.3

BILLIONBILLIONRPO Revenue€0.2
BILLION

South America is the smallest region of the private employment services industry according to all metrics. Apartfrom Peru, all countries in the region saw a contraction of the agency work market in terms of sales revenues.
Economic crises and currency depreciation across the region played a major role in this downturn. The Brazilian
market is by far the largest in the region, contributing 81% of all placements and generating two thirds of the region’s
agency work sales revenues. The Brazilian agency work sector took a hit in 2018, contracting 27.4% in euro terms.

Note: Statistics gathered from WEC national federations and Staffing Industry Analysts.

WEC Economic Report 2020|

23

REGIONAL FOCUS

UK remains largest market in Europe; Netherlands sees strongest growth
Countries included in figures:

Placements

10.6

PrivateEmployment
Agencies:

111,500

Internal
Staff

565,800

MILLION

Agency Work Revenue€164.5BILLIONMSP Revenue€39.4
BILLION

Direct Recruitment
Revenue€14.9
BILLION

Europe is the largest region in terms of agency work sales revenues, contributing 44% to the global market size.
In total, nine European countries are represented in the top 15 largest agency work markets globally. The United
Kingdom is the largest market in Europe. It is home to one-quarter of all private employment agencies in Europe
and responsible for nearly ten percent of all placements in the region, generating 23% and 42% of sales revenuesof the European agency work and direct recruitment market respectively. The UK is followed by Germany, France,
the Netherlands, Italy, Switzerland and Belgium in terms of agency work sales revenues. The Netherlands saw thestrongest growth in agency work sales revenues in 2018, at 14.6%.1

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Austria

Lithuania

Belgium

Luxembourg

Bulgaria

Netherlands

Croatia

NorwayCzech Rep.

PolandDenmark

PortugalEstonia

Romania

Finland

RussiaFranceSlovakia

Germany

Slovenia

GreeceSpain

Hungary

SwedenIreland

Switzerland

Italy

TurkeyLatviaUK

Note: Statistics gathered from WEC national federations and Staffing Industry Analysts. 1 ABU estimate based on CBS figure.

REGIONAL FOCUS

Asia-Pacific maintains strong direct recruitment market
Countries included in figures:
Australia
China
India
Japan
New Zealand

Placements

18.3

45,100MILLION

Agency Work Revenue

MSP Revenue

€76.8

€10.2

BILLION

PrivateEmployment
Agencies:

BILLIONInternal Staff

1.5
MILLION

Direct Recruitment
Revenue

RPO Revenue

BILLIONBILLION

€22.3

€1.1

The region consists of several large markets, both in terms of placements and sales revenues in agency work and direct
recruitment. While China contributes the major share of the region’s job placements, Japan generates by far the highest
sales revenues in the agency work sector. Australia, while being a significantly smaller market in terms of population, performs best in direct recruitment, second only to the USA on a global level in terms of sales revenues. In 2018, the Chinese
market is alone in the region in having seen growth in agency work sales revenues in euro terms, despite the economic
slowdown and a depreciating yuan. In a three-year horizon, Australia, China and Japan performed well – up 43%, 46% and
32% respectively.

Note: Statistics gathered from WEC national federations and Staffing Industry Analysts.

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25

ANNEX

Glossary of Terms Used and Acronyms

Agency Work

Direct Recruitment

Private Employment Services / Employment Industry

Agency work is a triangular employment relationship,
defined in ILO Convention 181 as: “Services consistingof employing workers with a view to making themavailable to a third party, who may be a natural or legal
person (“user enterprise”) which assigns their tasks
and supervises the execution of these tasks”. It can be
named Dispatched Labour in Asia, Labor Hire in Africaor Temporary Staffing in the USA.

Services for matching offers of and applications for
employment, without the private employment agency
becoming a party to the employment relationships
which may arise therefrom (Source: ILO Convention181), including search and selection.

Agency work is usually one of several other HR services
provided by recruitment and employment agencies,
along with direct recruitment, career management,
RPO and MSP. The collective name for these services isprivate employment services. The employment agency
provides a professional service to a user company
by taking over (a part of) the recruitment and HR
process. In this sense, private employment services arecomparable to other professional and business services
such as auditing and accounting, communications andmarketing, facilities management, etc.

Career Management
Career Management services enable jobs, skills andbusiness performance to be viewed in an integrated
way and with a long-term perspective. It includes primarily services such as outplacement and career transition, redeployment and other development activities
designed to help organisations and individuals to manage changes in the practices, processes, conditions
and basis of employment.
Daily Average Number of Agency Workers (in FTEs)
Total number of hours worked by all agency workers
in a country over a period of one year divided by theaverage number of hours worked over a period of one
year by a worker with a full-time job with an openended contract.

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Managed Services Provider (MSP)
MSP is a service whereby a company takes on primary
responsibility for managing an organisation’s contingent workforce programme. Typical responsibilities
of an MSP include overall programme management,
reporting and tracking, supplier selection and management, order distribution and often consolidated billing.
The vast majority of MSPs also provide their clientswith a vendor management system (VMS) and may
have a physical presence at the client’s site. An MSP
may or may not be independent of a staffing provider.
Penetration Rate
Daily average number of agency workers (in FTEs)
divided by the working population (as defined by the
ILO as follows: “The employed comprise all persons ofworking age who during a specified brief period, suchas one week or one day, were in the following categories: a) paid employment (whether at work or with a
job but not at work); or b) self-employment (whether
at work or with an enterprise but not at work).”

Recruitment Process Outsourcing (RPO)
A service by a third-party specialist provider, to assume
the role of the client’s recruiting department byowning and managing part or all of its recruitment
process and related recruitment supply chain partner
relationships, providing the necessary skills, activities,
tools, technologies and process methodologies.

ANNEX

Methodology

The data presented in this report is for the calendar year
2018, unless stated otherwise. Sources vary depending on the data, although most of the figures are collected by the World Employment Confederation fromits national federation members. This is primarily thecase for the agency work market. Some national federations gather data directly from their respective members, whereas others collect data from public sourcesor research partner institutions. The World Employment
Confederation also partners with Staffing Industry
Analysts (SIA) to gather figures on markets where thenational federation members are not able to deliver.
This allows for a more complete assessment of theindustry across the various HR services.
For the calculation of the total global market size of theprivate employment services industry, five service segments have been included: agency work, direct recruitment, MSP, RPO and career management services. Dueto the fact that a major share of MSP activities falls in
the agency work category, there exists the risk of double counting sales revenue figures. This is especially true,since the sources used to gather sales revenue figures differ for the two service segments in question. To minimise
the risk of double counting, a certain share of total MSP

sales revenues was subtracted and attributed to the total
agency work sales revenues. This share was 78% for 2018,
taken from SIA’s 2019 MSP report.
All revenue figures are reported in euro terms. The
OECD annual average exchange rates are used to convert from local currency to euros.
It must be noted that some figures presented in thisreport may be underestimating the true picture of
the global industry, since the World Employment
Confederation does not have members in every country providing statistics. This is specifically the case forthe number of agencies and internal staff. Note alsothat a lack of information on specific countries does
not mean that private employment services are not provided in that country.
In case of questions on the statistics presented oron the methodology applied, please contact Robin
Lechtenfeld, Labour Market Intelligence Officer at the
WEC Head Office (robin.lechtenfeld@wecglobal.org).

WEC Economic Report 2020|27

Members of the World Employment Confederation
National Federations
NORTH AMERICANORTH EAST ASIAEUROPE

Canada (CA) - ACSESS
Mexico (MX) - AMECH
USA (US) - ASA

China (CN) - CAFST
Japan (JP) - JASSASouth Korea (KR) - KOHRSIALATIN AMERICAAPAC SOUTHERN

Argentina (AR) - FAETT
Argentina (AR) - CAPE
Brazil (BR) - FENASERHTT
Chile (CL) - Agest
Colombia (CO) - ACOSET
Peru (PE) - AETT

Australia (AU) / New Zealand(NZ) - RCSA
India (IN) - ISF
Indonesia (ID) - ABADI
Philippines (PH) - PALSCON

Austria (AT) - ÖPDBelgium (BE) - Federgon
Croatia (HR) - HUP
Czech Republic (CZ) - APPS
Denmark (DK) - Dansk Erhverv
Estonia (EE) - EPREL
Finland (FI) - HPLFrance (FR) - Prism’emploi
Germany (DE) - BAP
Greece (GR) - ENIDEA
Hungary (HU) - SZTMSZIreland (IE) - NRF
Italy (IT) - Assolavoro
Latvia (LV) - LPDAA
Lithuania (LT) - LIIA

AFRICASouth Africa (ZA) - APSO

Corporate Members

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Luxembourg (LU) - FESNetherlands (NL) - ABU
Norway (NO) - NHOSH
Poland (PL) - Polskie Forum HR
Portugal (PT) - APESPE
Romania (RO) - AFSRU
Russia (RU) - ACHAZ
Slovakia (SK) - APAS
Slovenia (SI) - ZAZ
Spain (ES) - ASEMPLEO
Sweden (SE) - Kompetensföretagen
Switzerland (CH) - swissstaffing
Turkey (TR) - OIBD
United Kingdom (UK) - REC

Disclaimer
This Economic Report is owned by the World Employment Confederation, whose registered office is at Tour &Taxis Building, Avenue du Port 86c, Box 302, 1000 Brussels, Belgium. Care and precaution were taken to ensurethat the information published in this report is accurate but the World Employment Confederation publishes thiscontent as supplied and is not responsible for its accuracy or timeliness. You must take appropriate steps to verify
this information before acting upon it. Any use of this report or its content, including copying or storing it inwhole or in part, other than for personal, media-related purposes or non-commercial use, is prohibited without
the prior permission of the World Employment Confederation. In any case, the source of the information to be
published should be mentioned as ©World Employment Confederation – Economic Report 2020.

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