Encouraging signs from the Staffing Agency industry

Staffing Software | 26.04.2021

After the crisis recorded in Q2, there are encouraging signs that the sector is recovering strongly.

The Covid-19 pandemic has disrupted economies and labour markets around the world, leading to significant contractions in GDP in many countries. Entire sectors were shut down for a considerable length of time, generating multiple difficulties for many businesses and workers.

The private employment services industry was no exception and the sector experienced unprecedented declines across many countries, both in terms of the number of workers placed in the labour market and in industry revenues.

The crisis put a halt to the growth that the global private employment services industry had experienced for the past couple of years.

In 2019 the industry was worth €495 billion, an increase of 5% compared to the previous year.

The agency work sector remains by far the largest segment of the industry, generating €391 billion of total revenues.

Because of the pandemic, the estimates indicate that the global market turnover fell by as much as 18% in the first half of 2020, compared to the first half of 2019.

Covid-19 impacts agency work sector deeper than the Great Recession

The graph shows both the volume and value of the agency work sector have reached record-lows, sinking even lower than they had during the Great Recession in 2009.

Looking at the second half of 2020, the sector began a gradual path towards recovery, as economies had opened up again during the 2nd and 3rd quarters.

In the last quarter of 2020, as the pandemic gained momentum once more and lockdowns had to be reintroduced across many countries, this recovery has somewhat slowed but was not halted.

 

Services sector employs majority of agency workers, with regional differences

The largest share of agency workers at a global level work in the services sector (48%), while nearly onethird are employed in the manufacturing industry (28%). Construction is the third largest sector at 8%, while the agricultural sector employs just 4% of agency workers globally.

Comparing the sectoral distribution of agency workers to that of the overall employed population at global level, we see that the agency work sector is in line with those trends. Half of global employment is in the services industry, according to statistics published by the World Bank. This share has been consistently growing over the past decades, as economies shift away from the agricultural and manufacturing sectors on their development paths.

In the regional breakdown, we can make some noteworthy observations:

  • The more developed regions showcase a lower-than-average share of agency work employment in the agricultural sector, while having an above-average share in the services industry.
  • Agency work employment in the agriculture sector is particularly high in the countries within the South American region
  • The manufacturing sector comprises a majority of agency workers in Eastern European countries.

Conclusions

Although, the private employment services industry have not returned to pre-crisis levels and the future remains uncertain, the sector stands ready to support businesses and workers in the recovery.

The use of new tools in the search and selection process (video recruiting, tests on hard and soft skills), the digitalization of processes and the acceleration of technology are drivers that will certainly impact on the competitiveness and growth of the sector.

Helping people and companies to manage change is in this sector’s DNA and the sector’s performance before the crisis shows that we can look forward to a speedy recovery.
(Source World Employment Confederation)

Sign up here to get the latest news, updates and special offers delivered to your inbox.

    I am interested in HR solutions for:

    Who we are

    Arca24 is an HR Tech Factory specialised in the development of cloud software for the human resources sector.

    Do you want to keep updated with the latest news? Follow us on:

    Reference product

    Ngage – Staffing Agency Software

    Ngage (ATS+CRM) is a solution developed to support staffing and employment agencies throughout the entire production cycle. It optimizes and digitalize the processes of talent acquisition, customer relationship and administrative management.

    Find out more

    Other items from category “Staffing software”