WEC-Economic-Report-2023.pdf

Economic Report 2023

www.wecglobal.org

@WECglobal

World Employment Confederation

Tour & Taxis Building

Avenue du Port 86c

Box 302

1000 Brussels, Belgium

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 the

World 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 the

private employment services industry plays in enabling work, adaptation, security and prosperity. This role involves

building networks with relevant stakeholders including policymakers, social partners and the academic world; setting

high recruitment and employment standards and practices; acting as a thought-leader shaping futureproof and

competitive 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 Oce at [email protected].

1 | WEC Economic Report 2023

Contents

Foreword

Overview of Private Employment Services 03

Key Findings

Private Employment Services Industry 05

HR services

Agency Work 10

Direct Recruitment 16

Career Management 17

MSP 18

RPO 19

Regional focus

North America 20

South America 21

Europe 22

Asia Paciﬁc 23

Glossary 24

Methodology 25

2 | WEC Economic Report 2023

Foreword

HR services were in greater demand in 2021 than ever before. The 230,000 stang com-

panies around the world generated nearly €580bn in revenue. However, the true size of the

industry cannot be measured in ﬁgures alone, but rather in the thousands of success stories

that it writes every day. The spectrum ranges from people who, thanks to agency work, are

able to ﬁnd a position outside of the “shadow economy” for the ﬁrst time; to people looking

for jobs who are able to make the jump back into professional life after being terminated

or having a break in their employment; to highly-qualiﬁed specialists who are freelance but

seeking social protection as agency workers. With 62 million people placed in work, the HR

Services industry serves as an integration and employment engine on the labour market.

For example, in an anonymous survey, a 45-year-old hotel specialist attested how agency

work has opened the gates to the world of employment for him.

The success of HR services providers is a win for the people hired, and also for the hiring

companies. In a world that is swinging ever faster between crisis and recovery, ﬂexibility is a

decisive competitive advantage, so it’s no wonder that the market for managed service pro-

viders (MSP) – the comprehensive management of ﬂexible employees by a stang service

provider – is growing. Business increased 25.6% in 2021 compared to the previous year. One

client company recently testiﬁed that MSP solutions helped them to attract the best talent and

to entrust the social responsibility for temporary employees in the hands of the stang service

provider. Talent scarcity and the increasing importance of Environmental, Social and corpo-

rate Governance (ESG) norms have become additional growth drivers of this market segment.

“What the world needs now is a strong and sustained dose of social justice (…) In short, to

make sure that no one is left behind.” The vision recently shared by the Director General of

the International Labour Organisation, Gilbert F. Houngbo is one that HR services providers

around the world share and are helping to realise. Without costs to the taxpayer, they help

people ﬁnd employment, in whatever form of work they prefer, and they help companies

recruit and coach candidates to put them on their way to the next step of their professional

pathway. The ﬁgures in this report reﬂect the successes already achieved but there is more

potential to tap into. Let’s work together to create the framework conditions that will make

the HR services industry’s contribution to society even greater.

Denis Pennel

Managing Director

Marius Osterfeld

Chair of the Economic

Aairs Committee

Overview of the private employment services represented in this report

3 | WEC Economic Report 2023

Agency Work

Is a triangular employ-

ment relationship,

deﬁned in ILO Conven-

tion 181 as: “Services

consisting of employing

workers with a view to

making them available

to a third party, who may

be a natural or legal per-

son (“user enterprise”)

which assigns their tasks

and supervises the exe-

cution of these tasks”.

Managed Services

Providers

MSP is a service whereby

a company takes on

primary responsibility for

managing an organ-

isation’s contingent

workforce programme.

Typical responsibili-

ties of an MSP include

overall programme

management, reporting

and tracking, supplier

selection and manage-

ment, order distribution

and often consolidated

billing. An MSP may or

may not be independent

of a stang provider.

Direct

Recruitment

Services for matching

oers and applica-

tions for employment,

without the private

employment agency

becoming a party to the

employment relation-

ships which may arise

therefrom (Source:

ILO Convention 181),

including executive

search and selection.

Recruitment

Process

Outsourcing

A service by a third-

party specialist provider,

to assume the role of

the client’s recruiting

department by owning

and managing part or

all of its recruitment

process and related

recruitment supply

chain partner relation-

ships, provide the nec-

essary skills, activities,

tools, technologies, and

process methodologies.

Career

Management

Services which enable

jobs, skills and business

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.

Private Employment Services

4 | WEC Economic Report 2023

Key Findings

2021 was the year of rebound in economic and labour market activity after the

global COVID-19 pandemic. Turnover for the global HR industry grew an impres-

sive 22.8% to reach €579bn in 2021

, in sync with a 6.2% increase in global GDP

(International Monetary Fund). Global turnover for agency work, the largest seg-

ment of the private employment services industry, was up 13.7% to €417.5bn in 2021

after a 7% decline the previous year. Direct recruitment increased 20.8% to €71bn.

The Managed Service Providers (MSP) market increased by one quarter in 2021

to reach a record high of €164bn. The Recruitment Process Outsourcing (RPO)

segment grew 21.6% to €6.3bn over the year in review. After the halt in the tourism

and HORECA sectors in 2020 on the one hand, and the remote mode of work in

ﬁnancial and administrative sectors on the other, a strong rebound in agency work

activity took place in 2021, as anticipated, following the gradual easing of pandem-

ic-related restrictions. At the same time, following the career management industry

rally in 2020 (+14%) in response to the labour market shock, it shrank 20% in 2021

to €1.7bn. Outplacement services, relevant for transitioning laid o personnel to

new employment opportunities, have been less in-demand since the start of the

recovery, and have since been redeﬁning themselves and the services they oer.

The 15 largest temporary agency work markets generated 92% of global sector

revenues, most of them experiencing double digit growth in 2021. The US, the

largest market globally, registered an increase of 13.8%, the UK grew 15%, China

and Italy 32% each, Austria 24.6%, Spain 21%, India 20%, and Australia 18%. At the

same time, Japan, the third largest temporary agency work market in the world,

increased a modest 2.5% in 2021, after a healthy 2% increase the year before, in

spite of the continuing COVID-19 pandemic (see page 11 for more detail).

The 15 largest direct recruitment markets accounted for 94% of the global turn-

over, most of which grew in 2021. Of those, the US grew 28%, the UK and Ireland

each registered an astonishing increase of over 50%, and China reported a 34%

1 All growth rates throughout the report are in Euro terms. For conversion, the annual average exchange rate for the respective year as reported by the OECD was applied.

2 Excluding Mexico for keeping a comparable scope. With Mexico, the growth rate decreases to 0.1%

increase in sales. Furthermore, New Zealand, India, Canada and South Korea all

registered double digit growth in direct recruitment in 2021.

The number of workers placed in jobs by the private employment services sector

experienced moderate to high growth in most countries in 2021, with the excep-

tion of Lithuania, Romania, Estonia and also Mexico, where a law was passed in

September 2021 banning the subcontracting of personnel (except Specialised

Services). In total, the industry placed 62 million people in the labour market in

2021, an increase of 8%

over 2020.

As a result of a major improvement in global labour markets in 2021, the pen-

etration rate has also improved, increasing to 1.88% - nine basis points up from

the year before. The penetration rate indicates the share of agency workers in the

working-age population, and tends to be highly cyclical owing to the ﬂexibility that

agency work services provide to labour markets. During times of uncertainty and

with the onset of an economic downturn, the industry acts as a shock absorber to

businesses needing to quickly scale down operations, leading to a relatively quicker

reduction in sector activity. Once conditions show signs of improvement, employ-

ment in the sector expands more rapidly than in the overall labour market, as busi-

nesses can quickly hire new workers via agency work to meet their new needs.

Looking ahead, agency work markets will be cooling down in response to the

deceleration in economic activity expected in most developed and developing

countries around the world due to the energy crisis, increasing inﬂation, and a

persistent skill-shortage related crunch. One of the greatest challenges emerging

from the 2021 labour market dynamic is the record-high vacancy rates around the

globe, related to a general shift in workers’ priorities and a gradual – tectonic – shift

to a greener economy where technology also plays a larger role than before. While

this current edition of the Economic Report focuses on the year 2021, it is expected

that by the end of 2022 the industry will have lost the growth momentum.

Private Employment Services Industry Global Market 2021: €579bn

Top 5 markets (sales revenues) in 2021: €389bn

Outplacement: €1.7bn

RPO: €6.3bn

1.4%

MSP

€82bn

14%

Direct

Recruitment:

€71bn

12%

Agency Work: €417bn

72%

57%

...through an agency €336bn

...through an MSP €82bn

15%

5 | WEC Economic Report 2023

Private Employment Services Industry

Global private employment services recorded an upward trend in 2021. By the end

of the year, total industry turnover was estimated at €579bn

, which represents

an unprecedented 22.6% increase over 2020. Compared with the pre-pandemic

year of 2019, the increase was equally impressive at 13.6%. This all-time high con-

ﬁrms that HR services have never been in as much demand as they are today.

Connecting employers and jobseekers, the industry served as a bridge in the

recovery from the COVID-19 crisis, enabling a speedy economic revival.

All segments of the HR industry, except outplacement, grew in 2021:

• The agency work sector generated the major share of revenues among

all ﬁve of the industry’s HR service segments, contributing 72% of global

revenues. Agency work revenues stood at €417 billion in 2021, an increase

of 13.7% compared with 2020, and 5.6% more than in 2019.

• The revenue share of activities which are purely attributed to Managed

Services Provision (MSP) is estimated to comprise 14% of all HR services

in 2021 (€82bn), and showed a stellar performance, more than doubling in

size compared with 2020. At the same time, the other half of MSP activities

is actually attributable to the agency work sector, and represented another

€82bn.

• Direct Recruitment activities, representing 12.3% of global industry turnover,

ﬁnished the year with €71bn in revenues – 20.8% more than in 2020, but still

below its 2019 size.

• Recruitment Process Outsourcing (RPO) comprises a relatively small share

of the market, €6.3bn. In 2021 it grew 21.6%, just enough to recover to the

pre-pandemic 2019 level.

• Finally, the Career Management market, at €1.7 billion, was the only sector

to decline in 2021, reporting a fall of 20% compared to 2020, and still -8.8%

compared to 2019

1 While the estimates in this report only include countries that are members of the WEC, their combined market

share of the global private employment services market is not far from 100%.

Source: WEC members and Stang Industry Analysts. Note: Around 50% of MSP activities fall under agency work. This is represented in the split of agency work revenues.

of global

revenues

67%

187

bn 73bn 57bn 40bn 32bn

-10

-20

-30

-40

Europe agency work activity (y-o-y Δ) US agency work activity (y-o-y Δ) Europe (EU28) GDP growth (y-o-y Δ) US GDP growth (y-o-y Δ

)

‘12 ‘13‘11‘09 ‘10‘08 ‘18 ‘19 ‘20 ‘21‘17‘15 ‘16‘14 ‘22

Agency work activity (hours worked) vs. GDP (quarterly y-o-y change), Europe and US

PRIVATE EMPLOYMENT SERVICES INDUSTRY

6 | WEC Economic Report 2023

Agency work markets reported a major slowdown by end 2022

Source: WEC members; Eurostat

Temporary work agencies have been quick to step in, oering solu-

tions for the Ukrainian immigrants, including organising shelter,

childcare and oering job opportunities for the displaced people.

The unprecedented labour market squeeze was reﬂected in histori-

cally high job vacancy rates.

7 | WEC Economic Report 2023

PRIVATE EMPLOYMENT SERVICES INDUSTRY

Source: American Stang Association; Federal Reserve Bank of St. Louis

In 2022, economic and labour market conditions continued to improve in most

countries, with the pace decelerating towards the end of the year. At the same

time, the war that erupted in Ukraine in February 2022, created an inﬂux of immi-

grants into Europe, surpassing 8 million by February 2023 (UNHCR). Temporary

work agencies have been quick to step in, oering solutions for the Ukrainian

immigrants

, including organising shelter, childcare and oering job opportunities

for the displaced people.

Despite the trends leading to an increase in labour participation, the estimated

hours worked in Q3 2022 were still 1.5% below Q4 2019, (the pre-crisis bench-

mark), equivalent to a deﬁcit of 40 million full-time jobs (ILO).

The economic situation in many countries around the world started worsening

as the year 2022 progressed, with increasing energy prices, spiralling inﬂation,

and all major central banks starting to tighten their monetary policy stance. The

unfavourable economic conditions began to push many energy-intensive busi-

nesses to shrink their operations in order to cut costs; many smaller businesses

could not withstand the circumstances and closed up shop. As a result, the higher

cost of living around the world caused hardship to workers and jobseekers alike.

1 Examples: Manpower, Adecco, Randstad, GI Group, House of HR, RGF Stang, and many more

Paradoxically, growth rates were not only hampered by the economic conditions.

Many countries suered an unprecedented labour shortage, which limited their

growth rates. HR services played a crucial role in keeping growth rates going.

The unprecedented labour market squeeze was reﬂected in historically high job

vacancy rates around the world throughout 2021 and well into 2022. In Europe,

by the end of 2022, the number of job openings reached a peak of 3.2% of all jobs.

The ﬁgure stood at 6.5% in the USA, 5.6% in Canada, and 3.3% in Australia. Such

elevated demand for labour created an upward wage-price spiral, which, however,

only marginally translated into higher inﬂation in 2022. In some countries, the job

vacancy crunch started easing towards the end of the year.

Both, the decline in economic health and rising labour market scarcity, were

reﬂected in the temporary agency activity ﬁgures throughout the year. In the United

States, the largest agency work market globally, the volume of agency work assign-

ments in Q3-2021 was still in double digits compared to the same quarter the pre-

vious year. However, one year forward, the economic deceleration started pushing

growth down to single-digit level, and in the fourth quarter of 2022 approached

near-zero levels. Likewise, in Europe, pre-crisis levels were reached in early 2022,

but started showing signs of stagnation in the second and third quarters of 2022,

ﬁnally diving into the negative territory towards the end of the year. That said, sales

revenues kept aﬂoat despite the reduction in the number of hours worked.

PRIVATE EMPLOYMENT SERVICES INDUSTRY

8 | WEC Economic Report 2023

Private employment agencies provide client companies and

workers with various HR services including agency work,

direct recruitment, career management, MSP and RPO.

Complementing the public employment services, they contrib-

ute to well-functioning labour markets by matching employers

with jobseekers.

In 2021, a combined 232,000 private employment agencies

were operating in the 39 countries around the world where

data was available. This is 9% more than in 2020. The greatest

contributors to this impressive increase in absolute terms are

Australia, Brazil and China.

In 2021, branches of agencies around the world that delivered

employment services to companies and individuals employed

3.8 million people as internal sta in 33 countries - 11.4% more

than the previous year.

The majority of agencies are in Asia Paciﬁc, followed by Europe,

North America and South America. For more regional market

information, consult the “Regional Focus” section of this report.

NOTE: Real ﬁgures are most likely higher, as data is not available for all countries.

232,000

Private

Employment

Agencies:

Internal Sta:

Temporary work agencies

Direct recruitment agencies

Managed Services Providers

Recruitment Process Outsourcing

Career management ﬁrms

MILLION

3.83.8

HR services grow as an attractive career choice

China 21.0

USA 14.1

India 4.7

Mexico 4.3

France 3.0

UK 2.1

Japan 2.1

Brazil 1.18

Netherlands 0.99

Italy 0.96

Poland 0.86

Germany 0.82

Belgium 0.79

Spain 0.78

Canada 0.63

Australia 0.50

Switzerland 0.49

Austria 0.37

Colombia 0.36

Chile 0.30

South Africa 0.22

Sweden 0.22

Finland 0.18

Czech Republic 0.16

Slovakia 0.11

Norway 0.08

Portugal 0.08

Russia 0.07

Agency work headcounts (000’s), 2021

Ireland 0.07

Argentina 0.06

Slovenia 0.05

Bulgaria 0.04

Greece 0.03

Latvia 0.03

Romania 0.03

Denmark 0.02

Hungary 0.02

Croatia 0.02

Lithuania 0.012

New Zealand 0.011

Luxembourg 0.008

Estonia 0.005

* TAW headcount data from Eurostat for SK, CZ, PT, SI, LV, DK, HU, HR, RO, LT, LU

9 | WEC Economic Report 2023

PRIVATE EMPLOYMENT SERVICES INDUSTRY

The HR industry was the gateway for jobseekers

around the world to ﬁnd a new job opportunity.

In 2021, at least 62 million people in 40 coun-

tries were placed in the labour market by private

employment agencies, up 1% from 2020.

China was the market with the most people placed

in jobs by the agency work sector, followed by the

US and India. These top three markets account for

64% of all job placements globally.

Mexico, as a result of the September 2021 ban on

outsourcing, reported a near-50% decline in job

placements in 2021 compared with the previous

year. The only other markets registering a decline

in the number of placements were Romania,

Lithuania, Greece, Slovakia and Estonia

1 According to Eurostat headcount data

Number of

people placed by

private employment

agencies globally:

MILLION

Number

of placements

through direct

recruitment:

MILLION

6.5

Number

of placements

through temporary

work agencies:

MILLION

55.4

Record-high number of 62 million people placed in the labour market in 2021

187

Top 15 agency work markets, sales revenues (billion €) | annual change (%), 2021

USA Japan UK Germany Australia France Netherlands Italy Canada Switzerland Belgium China Spain India Austria

187 73 57 40 32 21 21 14 17 11 8 17 7 9 4

HR SERVICES

10 | WEC Economic Report 2023

Nearly all agency work markets register massive rebound

Source: WEC members and Stang Industry Analysts. Note: All growth rates are in euro terms.

HR SERVICES

11 | WEC Economic Report 2023

In 2021, the 15 largest HR markets represented 89% of the sector’s global turnover, of which the three

largest markets – the United States, Japan and the United Kingdom – accounted for 55% of the global

market size. The US agency work industry remained by far the largest market, generating 32% of the

global turnover, and growing 31% in 2021.

When looking at regional agency work market values, Europe is the largest region with nine of the top

15 markets located in the region. These markets contributed a combined 32% of sector turnover to the

global ﬁgure. Rebounding from the unprecedented year of COVID-19 related lockdowns, most of these

markets reported double digit growth. Highest growth was registered in Spain (+34.4%), Belgium and

Italy (31%), Austria (+25%) and the UK (23.6%).

Turning to the Asia Paciﬁc region, agency work markets have also shown a strong rebound after the

pandemic. The Japanese agency work market, the second largest globally, grew 1.9% in 2020 and 4.2%

in 2021. The strong performance in 2020 was partly due to the strength of the manufacturing sector,

but also the result of regulatory changes stipulating equal pay for agency workers taking eect. As a

consequence of these salary increases, agencies’ rates and turnover were inﬂated. Given the positive

outcome in 2020, the 2021 growth rate is in line with the previous years’ dynamics. In Australia, the

agency work market grew 11.5% in 2021. The Chinese labour market increased an impressive 33.5%

during the year in review.

AMERICAS

1.77

GLOBAL

1.37

EUROPE

APAC

2.17

0.94

TAW work penetration rate, 2021 (%)

3.67

3.12

3.01

2.94

2.89

2.87

2.80

2.62

2.46

2.32

2.29

2.25

2.12

2.02

1.84

1.82

1.77

1.62

1.47

1.38

1.28

1.12

1.02

1.01

0.89

0.86

0.77

0.69

0.52

0.51

0.49

0.41

0.35

0.33

0.31

0.30

0.20

0.14

0.01

Note: Rates are calculated by dividing the number of agency work-

ers in full-time equivalents (sources: WEC members; estimates based

headcount and average headcount/FTEs ratio) by the working-age

population (source: ILO). Regional rates were calculated by dividing

the sum of FTEs by the sum of the working-age population.

The 2021 data for the Netherlands is incomparable with the previ-

ous years due to a change in methodology of data collection by

“Statistics Netherlands” (www.cbs.nl).

HR SERVICES

12 | WEC Economic Report 2023

Agency work penetration rates improve in many countries

Due to the ﬂexible nature of agency work, sector employment is a barometer of the

current economic situation.

13 | WEC Economic Report 2023

HR SERVICES

In 2021, the global weighted average penetration rate of the agency work sector stood at 1.88%,

a 9-basis-point increase from 2020.

This rate represents the share of agency work in overall employment and can be subject to various fac-

tors. Labour market regulation typically plays an important role, as more restrictive policies in terms of

hiring ﬂexible workers tend to reduce the share of agency workers. Some countries can be characterised

as having a more liberal approach to labour market regulation, weighing the trade-o between e-

ciency and responsiveness in labour market transitions on the one hand and job protection on the other.

Another factor can be the maturity of the agency work sector within a country. A higher penetration rate

typically indicates an industry that has moved closer to maturity, while, to an extent, low penetration rates

showcase the potential future growth of the sector in the country.

Due to the ﬂexible nature of agency work, sector employment is a barometer of the current economic

situation. During an economic contraction, the sector tends to drop ahead of overall employment, and

similarly to rebound before economic activity ﬁgures show a recovery. This explains the decline in the

share of agency work employment in the year of the COVID-19 pandemic and economic crisis and the

improvement in the ratio in 2021.

Global

Europe

Eastern Europe

Croatia, Czechia, Estonia, Poland,

Romania, Russia

Southern Europe

3 0

Greece, Italy, Portugal, Spain

Central & Northern Europe

Austria, Belgium, Denmark, Finland, France, Germany,

Netherlands, Norway, Sweden, Switzerland.

APAC

Australia, India, Japan, New Zealand

South America

Other

Public Administration

Construction

Manufacturing

Agriculture

Argentina, Brazil, Chile, Colombia

Sectoral distribution of agency workers across regions (%)

Source: WEC members

Agency work plays a crucial part in nearly all

sectors of the economy.

HR SERVICES

14 | WEC Economic Report 2023

Services sector employs majority of agency workers, with regional dierences

Agency work helps companies stay competitive through

ﬂexible working solutions and providing workers with a

decent mix of ﬂexibility and social security. The industry

supports workers to move from declining sectors to pro-

fessions in demand and thereby helps companies to attract

and retain the talent needed. In 2021, globally, the share of

agency workers employed in the services sector and the

manufacturing industry were in the same range of 38% and

33% respectively. Construction, the third largest sector, was

at 7%, while the agricultural sector and administration each

employed just 3% of agency workers globally.

Share of agency workers in the healthcare sector: 2019 2020 2021

South Africa Ireland Netherlands Australia Chile Switzerland Mexico Lithuania India Germany USA France Belgium Japan Italy Norway Brazil

Source: WEC members

15 | WEC Economic Report 2023

HR SERVICES

In 2020, the year of the COVID-19 pandemic, healthcare emerged as a vital front-

line service. With the outbreak of the pandemic, demand for healthcare workers

soared, and temporary agencies were well-placed to ﬁll the gaps. By keeping or

attracting healthcare professionals with ﬂexible working solutions in many coun-

tries around the world, temporary agencies contributed to a successful recovery

from the global health crisis. This is why the relative share of healthcare agency

workers increased in 2020. In 2021, the ratio continued increasing in countries

including Australia, Brazil, Chile, Germany, Netherlands and Switzerland. At the

same time, a few markets - including India, Ireland, Lithuania and Japan - saw a

gradual retraction towards pre-pandemic levels.

Top 15 markets in direct recruitment, sales revenues (billion €), 2021, change 2020/2021 (%)

South

Korea

Italy

Canada

SpainIndiaNew

Zealand

NetherlandsJapanIrelandUKGermanyAustralia

China

USA

19.8

11.3

-5

9.3

6.5

5.5

4.33

-16

4.03

1.51

1.27

0.74

0.72

0.62

0.53

0.51

Switzerland

Source: WEC members and Stang Industry Analysts

HR SERVICES

16 | WEC Economic Report 2023

Direct recruitment recovered in nearly all countries

The global direct recruitment market grew 20.8% in 2021 to €71bn, but remained

below the 2019 volume. At national level, turnover showed uneven recovery unlike

the agency work market. 2021 was the year of gradual return to normal economic

operations, with dierent national economies opening at varying speeds. That, as

well as increasing economic uncertainty towards the end of the year, may have

made employers reluctant to create open-ended positions for recruiters to ﬁll.

The United States, China and Australia were the largest markets in the direct

recruitment sector in terms of value, together generating 57% of the global sector’s

turnover in 2021. Of those three, the US and Chinese markets grew 28% and 34%

respectively, leading the global recovery of the sector. By contrast, the Australian

market shrank 5% in 2021, not least due to a later easing of lockdown restrictions

compared with other markets.

The European market grew fastest in 2021 (34.1%), followed by North America and

LATAM (27% and 26% respectively), and APAC (8%).

Top 10 career management markets, sales revenues (billion €), 2021

0.32 0.18 0.13

0.11

0.10 0.09 0.09 0.04 0.03 0.01

Netherlands Japan Canada BelgiumAustralia Germany

ItalyUSA France

Being strongly countercyclical, demand for such services tends

to increase during economic downturns, and recede during an

economic upswing.

HR SERVICES

17 | WEC Economic Report 2023

The global career management sector’s market size shrank by one ﬁfth in 2021,

down to €1.7 billion. Career management is the only segment among the ﬁve

services of the private employment services industry to have declined in 2021.

Outplacement and career transition services, which represent the majority of

activity and turnover in the sector, support companies and individuals when

employees need to be laid o, by guiding and preparing them for the next step

in their careers. Being strongly countercyclical, demand for such services tends to

increase during economic downturns, and recede during an economic upswing.

This explains why outplacement demand tailed o in 2022, as the economy

strengthened and, not least, was coupled with a surprisingly strong hiring trend.

The year started positively, but optimism was curtailed as demand decelerated

sharply in the ﬁrst half of 2021. The recovery of the global economy and bounce

back in labour demand was surprisingly strong as COVID-19 lockdowns eased.

Accordingly, the US outplacement market, in particular, became dicult and

below the levels of demand seen in Europe.

To that end, declines were registered in the US, France, Canada, Japan and Belgium.

At the other end of the spectrum is Poland, a European country weathering one of

the strongest impacts of the war in Ukraine, which saw its outplacement business

grow 3% in 2021.

Note: Based on estimations by members of the World Employment Confederation’s Career Management Task Force

Career management declines as economy swings up

HR SERVICES

18 | WEC Economic Report 2023

MSP markets decline in Americas and EMEA, but hold steady in APAC

Source: Stang Industry Analysts.

Managed Services Providers, regional market value (billion €)

Americas EMEA APAC Global

2017

116

2018

119

2019

135

2020

130

165

2021

The global Managed Services Provider (MSP) market was estimated

at a record €164 billion in 2021, a strong 25.6% growth after a 3.2%

contraction in 2020.

Strong growth in the MSP market was observed in all regions.

Representing 58% of the global MSP spend, the Americas is the largest

region, home to two of the three largest MSP markets – the United

States and Canada. In 2021, it grew 27% to €95bn. The second largest

region is Europe, the Middle East and Africa (EMEA), generating one-

third of global spend, which increased 23% in 2021 to €54bn. The

smallest region, Asia Paciﬁc (APAC), saw the strongest growth of the

three, up 31% to €16bn in 2021.

MSP help their clients to manage their ﬂexible workforce in a compliant

way as well as to gain access to the skills the company needs, thus

helping to ensure business success. Firms which specialise in MSP

are third-party service providers taking over a client company’s

contingent workforce management. The major share of MSP spend

(50% in 2021 according to Stang Industry Analysts) comprises

temporary employees and independent contractors - meaning that

the spend of a large part of MSP programmes can, in eect, be

attributed to revenues from the agency work sector. This share has

been decreasing in recent years. The remaining share of MSP spend

is raised by statement of work and/or outsourcing activities by the

service provider.

The four main industries globally in which MSP services are popular

include technology and telecommunications, ﬁnance and insurance,

healthcare, and pharmaceutical and medical equipment sectors.

Together, these four economic sectors represented 68% of all MSP

industry spend in 2021.

HR SERVICES

19 | WEC Economic Report 2023

Recruitment Process Outsourcing, regional market value (billion €)

Americas EMEA APAC Global

2017

0.9

1.4

2.2

2018

1.1

1.9

2.7

2019

5.7

1.0

1.7

2.5

2020 2021

5.2

6.2

4.6

4.2

1.2

1.9

3.0

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

The global market value for Recruitment Process Outsourcing (RPO)

stood at €6.3 billion in 2021, a 22% increase on 2020. Nearly half of

the global RPO market value is generated in the Americas region

(49%), which registered a strong 23% growth over 2020. The region

containing Europe, the Middle East and Africa represented around

one-third of the global RPO value, increasing 17%. The smaller Asia

and Paciﬁc region grew an impressive 28%.

This signiﬁcant growth reﬂects the strong market recovery following

a depressed market in 2020 due to COVID-19 disruption. Both

volume and price increases have combined to accelerate market

growth. As enterprises struggled to hire talent in the wake of the

‘Great Resignation’, providers helped to augment talent acquisition

activities for clients of all sizes and across all industries.

There are several trends driving the increase in demand for RPO

services, many of which have been accelerated by the COVID-19

pandemic. The need to scale the workforce in an unpredictable

environment requires greater ﬂexibility in talent acquisition models.

RPO’s provide the much-needed scalability and agility at short

notice and support business needs when they arise.

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.

RPO markets decline across all regions

REGIONAL FOCUS

20 | WEC Economic Report 2023

North America aected by the ban on agency work in Mexico

The region is primarily dominated by the United States, the largest market in both

North America and globally by various metrics. Globally, 31% of people placed in

the labour market by the industry were in North America, with nearly three quarters

of placements in the region completed in the United States.

Over one-third of global agency work revenues were attributed to the region, with

the largest market globally – the United States – generating 92% of the region’s

agency work turnover.

In 2021, the region’s agency work market contracted 2.6%, largely due to the neg-

ative impact of Mexico’s ban on the subcontracting of workers which took eect

on 1 September 2021. By the end of the year this caused the private employment

agency sector to lose one million temporary and permanent placements in the

country. Without Mexico, the region’s hired workforce increased 3.5% in 2021.

North America also accounted for more than half of the global MSP market, nearly

half of all RPO revenues and one-third of direct recruitment turnover.

Note: Statistics gathered from WEC national federations and Stang Industry Analysts.

456,396

Internal

Sta

Placements

MILLION

28,226

Private

Employment

Agencies

Agency Work Revenue

€134.5

BILLION

MSP Revenue

€91.8

BILLION

Direct Recruitment

Revenue

€20.5

BILLION

RPO Revenue

€2.8

BILLION

Countries included in ﬁgures:

Canada

Mexico

USA

REGIONAL FOCUS

21 | WEC Economic Report 2023

468,885

Internal

Sta

8,962

Private

Employment

Agencies

Placements

MILLION

Note: Statistics gathered from WEC national federations and Stang Industry Analysts.

Countries included in ﬁgures:

Argentina

Brazil

Chile

Colombia

Peru

South America remained the smallest region when comparing the above metrics

to other regions. The region is to a large extent dominated by the Brazilian mar-

ket, which accounts for over 60% of the private employment services industry’s

placement of people in the labour market in South America. Just over 3% of global

placements happened in this region, while 1.1% of agency work turnover was gen-

erated here, half of which in Brazil. The Brazilian agency work market shrank dra-

matically in 2020, and rebounded strongly in 2021, helping double the number

of placements in the region over the year. South America’s agency work market

revenues saw the strongest growth of all regions in 2021.

1.9

Agency Work Revenue

€4.4

BILLION

MSP Revenue

€2.8

BILLION

Direct Recruitment

Revenue

€0.4

BILLION

RPO Revenue

€0.2

BILLION

South America reports strongest growth in 2021

22 | WEC Economic Report 2023

REGIONAL FOCUS

Europe recovers from the pandemic

Nine of the 15 largest agency work markets globally are located in Europe, making it the region generat-

ing the largest share of global agency work turnover. A combined 38% of global agency work revenues

were raised in European markets. Europe generated just under one-third of the global market value of

direct recruitment, MSP and RPO markets.

The European agency work market grew 20% in 2021, of which France, the region’s largest market, grew

20%. The region is home to over one-third of private employment agencies, and responsible for placing

around 44% of all people placed in jobs globally.

676,687

Internal

Sta

76,826

Private

Employment

Agencies

Agency Work

Revenue

€170

BILLION

MSP Revenue

€54.1

BILLION

Direct Recruitment

Revenue

€22.4

BILLION

RPO Revenue

€1.3

BILLION

Austria Lithuania

Belgium Luxembourg

Bulgaria Netherlands

Croatia Norway

Czech Rep. Poland

Denmark Portugal

Estonia Romania

Finland Russia

France Slovakia

Germany Slovenia

Greece Spain

Hungary Sweden

Ireland Switzerland

Italy Turkey

Latvia UK

Countries included in ﬁgures:

Placements

MILLION

Note: Statistics gathered from WEC national federations and Stang Industry Analysts.

33.2

REGIONAL FOCUS

23 | WEC Economic Report 2023

APAC rebounds from the pandemic with double digit growth, except Japan

Countries included in ﬁgures:

The Asia and Paciﬁc region (APAC) consists of several large markets for the pri-

vate employment services industry, namely Australia, China and Japan, which all

grew strongly in 2021. About one-third of the industry’s placements of people in

the labour market took place in the APAC region, to the largest extent driven by

China, the second largest country in the world in placing workers in a workplace.

The agency work market in the region generated around one-quarter of global

industry turnover. The region is characterised by its strong direct recruitment sec-

tor, which accounts for 46% of the global direct recruitment market.

114,507

Private

Employment

Agencies

Agency Work Revenue

€105.1

BILLION

MSP Revenue

€16.1

BILLION

Direct Recruitment

Revenue

€27.3

BILLION

Australia

China

India

Indonesia

Japan

New Zealand

RPO Revenue

€1.3

BILLION

Placements

MILLION

Note: Statistics gathered from WEC national federations and Stang Industry Analysts.

28.3

2,209,430

Internal

Sta

24 | WEC Economic Report 2023

Glossary of Terms Used and Acronyms

ANNEX

Agency Work

Agency work is a triangular employment relationship,

deﬁned in ILO Convention 181 as: “Services consisting

of employing workers with a view to making 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”. It can be

named Dispatched Labour in Asia, Labour Hire in Africa

or Temporary Stang in the USA.

Career Management

Career Management services enable jobs, skills and

business performance to be viewed in an integrated

way and with a long-term perspective. It includes pri-

marily services such as outplacement and career tran-

sition, redeployment and other development activities

designed to help organisations and individuals to man-

age 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 the

average number of hours worked over a period of one

year by a worker with a full-time job with an open-

ended contract.

Direct Recruitment

Services for matching oers of and applications for

employment, without the private employment agency

becoming a party to the employment relationships

which may arise therefrom (Source: ILO Convention

181), including search and selection.

Managed Services Provider (MSP)

MSP is a service whereby a company takes on primary

responsibility for managing an organisation’s contin-

gent workforce programme. Typical responsibilities

of an MSP include overall programme management,

reporting and tracking, supplier selection and manage-

ment, order distribution and often consolidated billing.

The vast majority of MSPs also provide their clients

with 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 stang 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 of

working age who during a speciﬁed brief period, such

as one week or one day, were in the following cate-

gories: 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).”

Private Employment Services / Employment Industry

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 is

private 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 are

comparable to other professional and business services

such as auditing and accounting, communications and

marketing, facilities management, etc.

Recruitment Process Outsourcing (RPO)

A service by a third-party specialist provider, to assume

the role of the client’s recruiting department by

owning 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.

25 | WEC Economic Report 2023

Methodology

ANNEX

The data presented in this report is for the calendar year

2021, unless stated otherwise. Sources vary depending

on the data, although the majority of the ﬁgures are col-

lected by the World Employment Confederation from

its national federation members. This is primarily the

case for the agency work market. Some national feder-

ations gather data directly from their respective mem-

bers, whereas others collect data from public sources

or research partner institutions. The World Employment

Confederation also partners with Stang Industry

Analysts (SIA), allowing for a more complete assessment

of the industry across the various HR services (e.g. MSP,

RPO). Whenever a ﬁgure did not come directly from

members of the World Employment Confederation, it

is indicated throughout the report.

For the calculation of the total global market size of the

private employment services industry, ﬁve service seg-

ments have been included: agency work, direct recruit-

ment, MSP, RPO and career management services. Due

to the fact that a signiﬁcant share of MSP activities fall

into 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 dier for the two service segments in question.

To minimise the extent of double counting, a certain

share of total MSP sales revenues was subtracted and

attributed to the total agency work sales revenues.

In 2021, this share was estimated by Stang Industry

Analysts to be around 50%.

It must be noted that some ﬁgures presented in this

report may be underestimating the true picture of

the global industry, since the World Employment

Confederation does not have members in every coun-

try providing statistics. This is speciﬁcally the case for

the number of agencies and internal sta. Note also

that a lack of information on speciﬁc countries does

not mean that private employment services are not pro-

vided in that country.

In case of questions on the statistics presented or on

the methodology applied, please contact Viktorija

Proskurovska, Labour Market Intelligence Manager (WEC

Head Oce) Viktorija.Proskur[email protected]

26 | WEC Economic Report 2023

National Federations

Corporate Members

EUROPE

Austria (AT) - ÖPD

Belgium (BE) - Federgon

Bulgaria (BG) - NECB

Czech Republic (CZ) - APPS

Denmark (DK) - Dansk Erhverv

Estonia (EE) - EPREL

Finland (FI) - HPL

France (FR) - Prism’emploi

Germany (DE) - BAP

Greece (GR) - ENIDEA

Ireland (IE) - ERF

Italy (IT) - Assolavoro

Latvia (LV) - LPDAA

NORTH EAST ASIA

China (CN) - CAFST

Japan (JP) - JASSA

South Korea (KR) - KOHRSIA

APAC SOUTHERN

Australia (AU) / New Zealand

(NZ) - RCSA

India (IN) - ISF

Indonesia (ID) - ABADI

Philippines (PH) - PALSCON

LATIN AMERICA

Argentina (AR) - FAETT

Argentina (AR) - CAPE

Brazil (BR) - FENASERHTT

Chile (CL) - Agest

Colombia (CO) - ACOSET

Peru (PE) - AETT

AFRICA

South Africa (ZA) - APSO

Egypt (EG) - Target HR

Lithuania (LT) - LIIA

Luxembourg (LU) - FES

Netherlands (NL) - ABU

Norway (NO) - NHOSH

Poland (PL) - Polskie Forum HR

Portugal (PT) - APESPE RH

Romania (RO) - AFSRU

Russia (RU) - ACHAZ*

Spain (ES) - ASEMPLEO

Sweden (SE) - Kompetensföretagen

Switzerland (CH) - swissstang

Turkey (TR) - OIBD

United Kingdom (UK) - REC

NORTH AMERICA

Canada (CA) - ACSESS

Mexico (MX) - AMECH

United States (US) - ASA

Members of the World Employment Confederation

* Membership suspended for the year 2023

Disclaimer

This Economic Report is owned by the World Employment Confederation, whose registered oce is at Tour &

Taxis Building, Avenue du Port 86c, Box 302, 1000 Brussels, Belgium. Care and precaution were taken to ensure

that the information published in this report is accurate but the World Employment Confederation publishes this

content 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 in

whole 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

Economic Report 2020

www.wecglobal.org

@WECglobal

World Employment Confederation

Tour & Taxis Building

Avenue du Port 86c

Box 302

1000 Brussels, Belgium

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