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Overcoming Labour ShortagesSocial Impact Report 2022WEC Social Impact Report 2022About the World Employment ConfederationThe 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 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;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 Social Impact Report,do not hesitate to get in touch with the World Employment Confederations Head Office at infowecglobal.org.Executive Summary 04Introduction 06I-Scale of the challenge and driving factors 08 Global data and scale of the workforce challenge Driving factors of current shortages Common themes flagged by employment experts Addressing the expectations mismatchII-Skills and staffing shortages in context Why it matters 12 Skills matching as a driver of business growth The impact of understaffing on worker well-being Workforce management and the Decent Work agenda Skills and inward investment III-Seven solutions to the skills and staffing squeeze 16 Reviewing resourcing strategies and recruitment procedures Delivering agile staffing solutions to mitigate the impact of skills and labour shortages Adopting a sector-specific approach to staffing and skills shortages Taking a lead on reskilling,transitions and career management Bridging the expectations gap Supporting international recruitment drives and integration of refugees Building a strong collective voice to influence future skills and employment policy IV-Conclusion&recommendations 36 Recommendations to the HR services industry Recommendations to employers Recommendations to government and policy makers Annex 40Endnotes 45ContentsWEC Social Impact Report 2022Executive Summary The scale of workforce and skills challenges can appear overwhelming-Vacancies continued to rise in 2022 and most employers are either experi-encing skills gaps.Recruitment challenges are especially suffocating in sectors such as professional services,healthcare,construction,manufacturing,logis-tics and IT.Several factors are at play,including the pandemic legacy,demo-graphics,a lack of cross-border mobility,skills mismatches and economic inac-tivity.In some countries,post-pandemic labour market challenges are being exacerbated by restrictive regulations on staffing services.As well as a skills mismatch,we are facing an expectations mismatch;we must close the gap between employer and worker expectations before it turns into a gulf.The challenges must be evaluated within the context of growth and other priority areas-Skills mismatches and understaffing drain organizational energy,impact on worker well-being and unleash a vicious cycle of increased stress and attrition.On the flip side,good recruitment and effective staffing proce-dures are a driver of productivity,cohesion,culture and agility.They critically contribute to the achievement of the ILOs Decent Work agenda and the UNs Sustainable Development Goals(SDGs)particularly those linked to health and well-being,equality and economic growth.The focus now is on identifying practical solutions to the skills and staffing squeeze-The HR services sector places close to 60 million individuals in work every year and is at the forefront of delivering practical solutions to the skills and staffing squeeze.Seven areas where this social impact is the most in evidence are:1.Helping employers to review resourcing strategies and recruitment procedures2.Delivering agile staffing solutions to mitigate the impact of skills and labour shortages3.Taking a lead on reskilling,transitions and career management4.Supporting international recruitment drives and integration of refugees5.Adopting a sector-specific approach to staffing and skills shortages6.Bridging the expectation gap between workers and employers7.Building a strong collective voice to influence future skills and employ-ment policy Future progress requires decisive and timely collective action Staffing and workforce issues have never been so topical or as high up on the corporate and political agenda.The HR services sector can play its part by harnessing its unique insight to influence the policy agenda and by supercharging the skills of individual HR services professionals(including sector-specific exper-tise).Recommendations for employers include investing in recruitment and workforce planning and building a genuine partnership approach with external employment experts.For governments,the priority should be to create long-term national workforce strategies,with a focus on effective career manage-ment,public/private co-operation,an enabling regulatory framework and bet-ter synergy between public policy areas such as education,skills,social security and employment as well as transport and childcare.Meeting demand for staff and skills has never been more important or more pressing.The World Employment Confederations Social Impact Report 2022 evaluates the scale of the challenge,identifies innovative approaches and cre-ates a roadmap for future progress.4|WEC Social Impact Report 2022Recommendations for the HR services sectorRecommendations to government and policymakersRecommendations to employersInfluence the policy agendaBase policy decisions on dataSupercharge the contribution of individual employment and HR services professionalsCreate long-term and integrated national workforce strategiesSpread the word on what worksDrive change on a regional level Use data for both short-and longer-term advice Take public/private co-operation to the next level Boost sector-specific knowledge and awareness Harness diverse forms of work Provide targeted workforce management support for SMEsTake a lead on the future of work debate Enable more effective career supportPromote responsible practices through effective enforcement Invest in recruitment and workforce planning Be prepared to innovate Future-proof your employer brand Harness external expertise Shape the debates around skills and the future of work5|WEC Social Impact Report 2022I.Scale of the challenge and driving factors Executive SummaryThe post-pandemic era has been characterised by swift and significant surges in demand for labour across key sectors of the economy.Meeting this demand has never been more important.It has also never been more challenging.We have arrived at this situation due to a combination of factors.Some pre-date the Covid-crisis-including a long-standing shortfall in technical and STEM skills.Others are a direct consequence of the disruption and shape-shifting labour mar-kets caused by the Covid cataclysm.The result is significant and intensifying skills and staffing shortages in many countries.Focus must now turn to finding innovative short and longer-term solutions to jobs market mismatches and the skills and staffing squeeze.The World Employment Confederations Social Impact Report 2022 informs this debate through specific examples of new approaches that are already making a difference together with a roadmap for future progress.Finding the right staff and skills to meet demand is priority number one in most countries;and the challenge becomes more acute with every passing month.HR services providers need to work with their clients to re-imagine their employer brand and find new ways of attracting talent.We are witnessing innovations around the world to drive effective reskilling and career management activity,while public policy interventions also seek to have an impact.IntroductionThis 2022 edition of the Social Impact Report aims to:Place skills and staffing shortages in context and explain why addressing the skills mismatch holds the key to growth and recovery.Explore latest trends and developments at global,regional and national level and showcase new approaches to skills and labour shortages.Shine a light on the role of the global HR services profession in helping address skills mismatches and intensifying workforce challenges.Take a human-centred approach to labour markets and skills development Accelerate future progress through practical recommendations to policymakers,employers and the global HR services industry.6|WEC Social Impact Report 2022I.Scale of the challenge and driving factors 87%of companies say they are either already experiencing skills gaps or expect them within the next few years.McKinsey Beyond hiring report 7|WEC Social Impact Report 2022I.Scale of the challenge and driving factors IntroductionI.Scale of the challenge and driving factors Across the globe,the HR services sector places close to 60 million individuals in work every year.It has a front row view of the shape-shifting employment landscape and the drivers of change.In this section we explore the latest developments at global,region and national level and examine what the most recent data tells us about the scale of the staffing and skills mismatch.Global data underlines the scale of the workforce challenge Vacancies continued to rise in 2022 Vacancy numbers are the highest in over a decade across many countries.Tight labour markets and a shortage of workers have been a defining characteristic in the past year.In 2022,OECD countries registered an overall net gain of over 9 million jobs compared to pre-pandemic levels.In the US,more than 11 million job vacancies were posted in July 2022,against a pool of less than 6 million unemployed1.Nearly all sectors are affected-Vacancy rates have shown a particularly marked increase in areas such as administrative and support services,infor-mation and communication,construction,professional,scientific and techni-cal activities,and accommodation and food services.By 2030,there will be a global human talent shortage of more than 85 million people,or roughly equivalent to the population of Germany2.Left unchecked,that talent shortage could result in about$8.5 trillion in unrealised annual revenues.There are significant variations across countries and groups-Labour force participation and employment rates remain below pre-crisis levels in some countries,as does employment in low-paid and low-skilled jobs3.Looking ahead,external developments may start to impact employment dynamics and the candidate-driven nature of many labour markets.The reskilling challenge is significant-More than half of all employees around the world need to upskill or reskill by 2025 to embrace new respon-sibilities driven by automation and new technologies,according to the World Economic Forum(WEF)4.The challenge for employers is how to pre-empt and meet these changing needs and how to address the current skills mismatch.Employers are recognising the scale of current and future skills gaps According to a McKinsey survey,87%of companies say they are either experiencing skills gaps now or expect them within the next few years5.“2 in 5 employers across OECD countries are flagging major challenges in finding the staff and skills they need“6Karen Maguire,Head of Local Employment,Skills&Social Innovation,OECD8|WEC Social Impact Report 2022A number of factors are driving these shortages Finding sustainable solutions for bridging the gap must start with a clear understand-ing of what is causing the intensifying skills and staffing challenges.Here are some of the common factors flagged by recruitment and employment professionals:Pandemic legacy -people not returning to previous roles after furlough as well as a general revaluation of work/life priorities and the so-called great resignation.Demographics even pre-pandemic,worker shortages were intensifying due to workforce dynamics and demographics in many key sectors.Generally,an ageing population will continue to have implications for labour market dynam-ics in the future.Cross-border mobility hiring overseas workers is always a politically sensitive issue,but there are demonstrable economic benefits to ensuring that national immigration policies reflect the needs of business.Skills mismatches-The world of work is evolving at a pace which is creat-ing fast-changing skills needs.There is often a disconnect between education,skills and employment policy on a national level.The way forward is to build strong coalitions between governments business workers and education.Economic inactivity whilst employment rates are high in many countries and unemployment is at near record lows,there remains a section of the pop-ulation which is economically inactive.This is a wasted opportunity for both individuals and for employers who are seeking staff and skills.Employment experts flags some common themes The feedback from national employment federations whose members are in the front-line of national labour markets provides a practical insight on the impact of skills and labour shortages and on some of the most pressing issues.The box on the next page provides a snapshot of latest national trends including changing working patterns,sectors showing most demand and the impact on pay and support services needed by employers.Recurring themes and key messages are:There is a large discrepancy between the supply and demand of workers.Labour and skills shortages are a major obstacle to growth.Shortages are pushing up pay levels and salaries and more companies are look-ing to employ temporary agency workers on a permanent basis.Employers are increasingly looking to external support for permanent hiring needs as well as for temporary staffing.Recruitment challenges and skills mismatches are especially suffocating in sectors such as professional services,healthcare,construction,manufacturing,logistics and IT.There has been significant disruption in key sectors with many workers unwill-ing to return to the same role after lockdown.Post-pandemic labour market challenges are being exacerbated by restrictive regulations on staffing services in countries such as Japan and Mexico.9|WEC Social Impact Report 2022I.Scale of the challenge and driving factors BELGIUM-The staffing shortage has resulted in an increase of temp to perm fees as user companies look to take on temporary workers permanently.Scarcity of available agency workers has slowed the growth of the industry.BRAZIL-There is significant disruption across key sectors with many workers unwilling to return to the same role after lockdown.There are longer-term concerns linked to the decline in student numbers on the back of the pan-demic,This will affect the average qualification of workers and literacy rates have been estimated to have fallen back to where they were 15 years ago.GERMANY-The share of revenue from HR services firms mainly engaged in permanent placements has increased significantly in the last few years.Demand for staffing services overall is on the increase,but the shift from temporary to permanent placements is accelerating on the back of current skills and candidate shortages.JAPAN There is an increase in permanent placements,but this is mainly caused by new regulations on the provision of temporary agency staff rather than by skills and candidate shortages.NETHERLANDS-65 percent of staffing firms flagged worker shortages as a major obstacle to growth.Business services show the largest number of unfilled vacancies,with huge demand for accountants,lawyers,catering staff and cleaners.Shortages are pushing up pay levels and salaries and resulting in temporary staff being offered permanent contracts sooner.MEXICO-There is a shift from temporary to permanent placements.The pandemic impacted negatively on overall employment rates,but this is also linked to changes to labour law in Mexico,which have prohibited the sub-contracting of personnel and negatively impacted flexible working options.NORWAY-Staffing agencies are increasingly called on to help supply the most in-demand skills;this includes looking to bring in staff from other countries.Shortages are especially acute within healthcare,manufacturing and construction.Wages have risen significantly because of the scarcity of people with the right skills.SPAIN-Despite the fact that Spain has the lowest rate of empty vacancies in the eurozone,the number of unfilled vacancies has continued to rise.Workforce shortages are especially observed in key sectors such as con-struction,logistics and agriculture.UK-Skills and labour shortages have been an issue for some time but the composite effect of Brexit and the pandemic have made things worse.Temporary staff were a vital outlet in times of uncertainty;demand for per-manent staff has returned but jobs are remaining unfilled for longer due to shortages.There is a large discrepancy between worker supply and demand.IRELAND-There is an increase in demand for recruitment services overall,including for permanent placements at a time of skills and labour shortages.Demand is especially strong in sectors such as life sciences,IT,construc-tion,health and financial activities;the competitive market for candidates is driving up salaries.The impact of labour and skills shortages-A global snapshotNational recruitment federations are uniquely placed to provide timely insight on national trends and on the practical implications of skills and labour short-ages.Here is a snapshot:10|WEC Social Impact Report 2022I.Scale of the challenge and driving factors As well as a skills mismatch,we are facing an expectations mismatchUnderstanding the new reality of work is essential for employers and their recruit-ing partners around the world-especially in markets experiencing a staffing and skills squeeze.We explore what people want and expect from their work and examine how the pandemic has impacted life priorities and the practical implica-tions that this presents for employers and HR services professionals.The reality is that workplace changes have accelerated like never before.Data from LinkedIn shows that 81%of employers are changing workplace policies on the back of changing worker needs and expectations7.In addition to flexibility,the increased focus on wellbeing is a significant driver.Employment experts and HR services professionals can help close this gap between employers and workers before it turns into a gulf.The challenge is how swiftly they can achieve it.81%of employers are changing workplace policies on the back of changing worker needs and expectations.8LinkedIn Global Talent Trends 202211|WEC Social Impact Report 2022I.Scale of the challenge and driving factors II.Skills and staffing shortages in context Staffing and skills challenges are jeopardising post-pandemic recoveries and economic growth.This is a common refrain across the globe.As well as quantifying the size of the challenge and identifying practical solutions,it is important to be clear on how this pressing issue fits within the context of other policymaker and employer priorities-such as productivity and growth,decent work,inclusion and social innovation.Good workforce management and skills-matching drive business growth Staffing and workforce issues have never been so topical or as high up on the corporate agenda.According to Gartner,“Workforce issues are in the top three priorities for CEOs across the globe,alongside business growth and technology adoption9”.From an employer perspective,good recruitment and staffing procedures mean having the right people in the right roles at the right time.As such they are a build-ing block for organisational performance and productivity.But there is more to it than that.The collateral benefits of effective hiring strategies include enhanced organisational cohesion,agility,inclusion,reputation and culture.“Workforce issues are in the top three priorities for CEOs across the globe“10Justine van Huyssteen,Managing Vice President,Gartner12|WEC Social Impact Report 2022Collateral benefits of effective hiring strategies Good workforce management and effective hiring procedures are a cat-alyst for unlocking organizational potential and for delivering on opera-tional and strategic priorities.We identify six priority areas where address-ing current mismatches hold the key for sustainable progress:1.Productivity-Innovative talent attraction,recruitment and staff-ing strategies are key to organisational performance and enhanced productivity.Having the right people in the right roles at the right time means that services and products can be delivered.2.Cohesion-Effective recruitment and workforce management pro-cedures also ensure that new staff can integrate and perform at their best level quickly-this is where innovative induction and on-boarding programmes come to the fore.The end result is enhanced organisa-tional cohesion.3.Agility-Timely and effective hiring practices provide a means of responding rapidly to new market opportunities and being able to adapt to seasonal demand.Within this context,access to well managed temporary staffing arrangements provide a vital outlet for employers.4.Inclusion-Inclusive recruitment is just good recruitment.Evidence shows that making tangible changes on equality and inclusion within the workplace fosters tangible benefits in many of the areas listed above,including productivity,agility and reputation(see below).5.Reputation-Managing recruitment and staffing procedures well is the sign of a good employer.This not only ensures that the right people are in the right place;organisations are also judged on how they manage the process for unsuccessful candidates.In a tight labour market,repu-tation and employer brand matter more than ever.6.Culture-Creating a sustainable,inclusive and energised work envi-ronment is a priority for employers.Culture is not about protocols,policies or procedures;it is primarily about people and the behaviours and values that they manifest.So,no culture change programme will succeed without getting the people side right including hiring the right individuals in the first place.13|WEC Social Impact Report 2022II.Skills and staffing shortages in context“Countries successfully bringing in foreign investment have a sophisticated skills offer to attract investors.If you want to attract investment you need access to high-quality skills”John Cridland CBE,Chair of Skills Taskforce for Global BritainSkills mismatches impact worker well-being and drain organisa-tional energyPersistent worker shortages within companies are having a significant impact on their production and service delivery and jeopardising whole business models.They are also eating up the time and energy of organisational leaders and man-agers.There is increasing recognition of the importance of empathetic leader-ship but the sheer urgency of addressing chronic workforce challenges is creating huge distractions for even the most people-centred leaders and managers.There is one other factor which is often overlooked:the unsustainable pressure on existing staff and the impact that this has on worker well-being.Nothing creates more stress than working in an environment where there are simply not enough staff to get the work done properly.This applies to all places of work,from hos-pitals to hotels,from call-centres to coffee-shops,from warehouses to the full gamut of white-collar sectors.Understaffing and mis-matched hiring decisions(where people are appointed to roles that they are not able to perform in)have a huge knock-on effect on the well-being and mental health of other workers who are having to compensate.This drives a vicious cycle of increased stress,increased attrition rates,increased hiring challenges and an even greater increase in stress for existing workers.The ongoing debate around safe-staffing levels particularly in healthcare settings will increasingly focus not only on the impact on patients and end-users but also on other workers who are having to fend their way through the under-staffing fall-out.Lack of staf&/or suitable skills Existing staf are under increased pressure to deliver products&servicesPeople leave the organisationManagers and leaders are spending time trying to maintain services and products Stress levels rocket,job satisfaction plummets Worker shortages vicious stress cycle:14|WEC Social Impact Report 2022II.Skills and staffing shortages in context Effective matching and staffing levels are key drivers of the Decent Work agenda Achieving the right staffing levels makes jobs sustainable.It makes work fair and fulfilling and mitigates against unmanageable workloads and stress.Good recruit-ment and effective talent acquisition strategies can be seen as an important driver of the ILOs Decent Work agenda11 that is predicated on ensuring that work is pro-ductive as well as fair,with better prospects for personal development and social integration.It is also a cornerstone of the ILOs vision for a human centred recov-ery post-Covid and links directly into the UNs Sustainable Development Goals(SDGs)particularly those linked to health and well-being,equality,decent work and economic growth.This underlines the role of employment experts and the global HR services industry in making measurable progress on SDGs.In an ultra-competitive market for staff and skills the temptation is to upsell(and sometimes mis-sell)the roles that need filling.Getting people in at any cost is a short-term approach that ultimately benefits neither employers nor workers.Rather than resorting to superficial marketing spin to promote the jobs on offer,the focus must be on genuinely e nhancing the work experience.This ties into initiatives to promote careers in specific sectors with high demand but low public perception(such as care,hospitality and logistics).Good Work kitemarks have been developed in some countries.These aim to recalibrate the benchmark of what a positive workplace experience looks like and provide a means of measuring progress over time.In the UK,The Good Work Charter12 provides a framework of fundamental good work principles for employ-ers to work towards and demonstrate,covering areas such as fair pay and con-ditions,equality and dignity,well-being,autonomy,engagement and learning.The initiative was driven by the Institute for the Future of Work-an independent research and development institute and the Charter is intended to support sys-tematic review and development against each of the principles over time.Boosting skills underpins other political priorities,including inward investmentFrom a public policy perspective,active labour market policies and skills strate-gies are at the heart of national plans for sustainable post-pandemic economic reboots.National and regional prosperity depends on many factors,including the ability to nurture a vibrant business environment and attract inward invest-ment.This was the core message of a recent report by the WorldSkills UK Skills Taskforce13 which underlined the need for integrated national strategies on skills and inward investment to attract international firms.Almost half(46%)of foreign firms surveyed for the report said they would move their operations abroad if they couldnt get the skills they needed.The link between skills and economic development was also a central theme of the OECDs 2022 Local Skills Week.For employers investing in new markets,the ability to access the right skills and staff often at speed in order to seize new opportunities and meet peaks in demand-is an increasingly decisive factor.This underlines the importance of a vibrant and agile recruitment and staffing sector that facilitates timely local skills matching.“Talent is the new oil.Massive investment in skills is key to competitiveness,especially as companies will go where the skills are”Solanilla Franco,Commissioner for the City of Barcelona1415|WEC Social Impact Report 2022II.Skills and staffing shortages in context III.Seven solutions to the skills and staffing squeeze With post-pandemic labour market reboots,reskilling,evolving worker priorities and world of work transfor-mations at the top of agenda in most countries,there has never been a more important time to showcase new approaches to shape-shifting employment and workforce challenges.Having assessed the quantifiable benefits of bridging the skills and staffing gap as well as the scale of the challenge-we can now consider practical solutions and the role of the private employment services industry.Helping employers to review resourcing strategies and recruitment proceduresDelivering agile staffing solutions to mitigate the impact of skills and labour shortages Adopting a sector-specific approach to staffing and skills shortages Supporting international recruitment drives and integration of refugeesTaking a lead on reskilling,transitions and career management Bridging the gap between worker and employer expectationsBuilding a strong collective voice to influence future skills and employment policyThis section looks beyond what could or should be done to focus on what the sector is already doing to make a difference through recruitment innovation,agile staffing,reskilling support and other practical ways forward.1234567Below are seven solutions to the skills and staffing squeeze where the HR services sector is making a positive impact:16|WEC Social Impact Report 2022Employers are having to review established resourcing and recruitment strate-gies out of necessity.This has been the platform for HR services professionals to demonstrate their expertise and provide strategic advice and support to employ-ers.Here is a snapshot of some of the recruitment evolutions being witnessed on the ground:Reviewing hiring procedures-This covers a range of areas,including speeding up the selection process(in a competitive market you have to move fast!),harness-ing video interviewing,refreshing job descriptions and job ads,and providing better communication with candidates throughout the recruitment process.Refreshing selection criteria-The reality check of a tight jobs market has led to employers reviewing levels of experience and types of qualifications needed for certain roles.They have had to be more flexible with a greater focus on attitude and potential.Intermediaries are playing a decisive,game-changing role in identi-fying individuals who have the motivation and mindset to make a positive impact,but who dont have the experience or qualifications that would jump out on a CV or application form.Focusing on internal upskilling-If the trend is to hire more on potential and attitude,there will need to be more focus on ongoing development opportuni-ties once workers are in place.This applies to temporary staff as well as to per-manent hires data collected from World Employment Confederation members shows that a significant proportion of the agency workforce received training(see Solution#6 below).Making change happen on inclusion Being increasingly proactive in reach-ing out to underrepresented groups and the economically inactive is part of the response and a means of expanding talent pools.Diverse forms of work offered by HR services providers have traditionally worked as a stepping-stone into labour markets for underrepresented groups.Shaking up broader workforce strategies-This includes recalibrating the mix between permanent staff and temporary/contract/contingent labour.Evolving business models on the back of the pandemic fallout is also resulting in broader revaluations of internal structure and workforce needs,with agility required more than ever.Not all employers are moving with the times however and encouraging clients to adapt and innovate is an ongoing challenge for HR service providers.Nevertheless,wherever there is appetite for change and innovation,the sector is at the forefront of implementing and embedding new responses to evolving workforce challenges.Helping employers to review resourcing strategies and recruitment procedures117|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeC A S E S T U D YDelivering high-volume and high-skilled attraction campaignsHR Services Firms are at the forefront of helping employers attract staff for both temporary and permanent jobs despite a suffocatingly tight labour market.An important part of this is using their expertise to reach out to passive candidates.Kelly have examples in each of these areas15:Growing a team of developers for a global multi-platform media com-pany by unleashing the power of digital recruitment marketing and cre-ating a bespoke candidate attraction campaign with a bank of content(including video,landing pages,InMail messages and infographics).This showcased the employers brand and culture and what set them aside from their competitors.Partnering with an international client to support the opening of a new laboratory in Europe,requiring a range of new hires(chemists,engi-neers,team managers,and HR officers)within a 4-week window.A deep dive into the market identified the most popular online channels and communities as well as the benefits that target candidates would find most attractive.This led to a targeted social media campaign which resulted in 20 hires by focusing on passive candidates who had not even been looking for a new opportunity.Delivering temporary recruitment for a leading customer experience company,looking for a high-volume of Customer Service Advisors across multiple sites(up to 150 placements per week).A bespoke candi-date attraction campaign included videos,animations,recruitment land-ing pages and targeted email campaigns.Job board posts were com-plemented by e-mail,texts,proactive social media posts and by tapping into online community groups.C A S E S T U D YReaching out to older workers and vulnerable groupsThe Sixie initiative targets older people who are no longer economically active and aims to encourage them back into the workplace via tempo-rary work opportunities.It appeals to individuals to make the most of their knowledge and experience and offers relevant temporary assignments within businesses or non-profit organisations.Individuals can choose how they want to work(as a temporary worker or freelancer)and are provided with practical support on everything from contract drafting to remunera-tion.Sixie matches its assignments to the knowledge and experience of each individual.The JobRoad initiative is an international non-profit organisation that helps people re-integrate into the labour market and wider society.Launched in 2016 in Belgium,it has since played a pivotal role in steering people from vulnerable groups towards suitable employers.Targeted support helps to address barriers such as language,mobility and competencies.The initia-tive brings together employers and their partnering agencies,as well as local authorities and intermediary organisations.The outcome is social integration and filling vacancies with untapped talent.It provides stability through work,boosts confidence and self-esteem,and helps vulnerable people take back control of their lives.18|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeDelivering agile staffing solutions to mitigate the impact of skills and labour shortagesThe skills mismatch is not only making it harder to hire permanent staff but is also making the whole process increasingly drawn-out.The ability to access tempo-rary,contract and interim management staff(for more senior and technical roles)is providing a vital outlet for employers.At the same time,feedback from national recruitment federations is that employers are increasingly looking to offer perma-nent contracts to temporary staff.Across the world,over one-third of agency workers were previously unemployed or inactive.This demonstrates the role that temporary work plays in not only help-ing individual jobseekers to progress through work,but also in helping employers to access new staff.Agency work also continues to provide a vital stepping-stone for new labour mar-ket entrants,with a significant proportion of the temporary workforce made up of young people.People aged under 24 years account for 40%of the agency work-force in Argentina,39%in Brazil and 34%in France.20 1040306070508090100CLATGRNOMXDKHRNLFICHUSDEITSEBEARAUNZINCZJPFRInactiveUnemployedAverage 34%Figure 1:Share of agency workers coming from unemployment or inactivitySource:WEC data,2020 or latest available19|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeAs well as a vital outlet for employers,temporary staffing is also seen as a pos-itive outlet for individual workers.In many countries Austria,Belgium,Brazil,Italy,Norway,UK the percentage of agency workers who are satisfied with their employment situation is over 70%.In Switzerland and Sweden,the satisfaction gauge hits the 80%mark,and in Finland and the United States,it surpasses 90%.This explains why millions of people across the globe choose to work via a tem-porary work agency.Average 9%Average 26%0 10403050BRNLFRFINOBEINBGESITMXATCHUSJPARShare of employed aged under 24Share of agency workers aged under 24 FIxvuutrXPUSSECHNOATBRITUKBENLBGFigure 2:Agency work as an opportunity for the youthFigure 3:Share of agency workers satisfied with their work situationSource:WEC data,2020 or latest available20|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeBEwrpfXA7ITUSFIATINBGFRJPSEUKFigure 4:Share of agency workers willing to work again as an agency workerSource:WEC data,2020 or latest availableC A S E S T U D YBuilding new pipelines through awareness of different ways of workingAs the representative body for employment and staffing experts in Japan,JASSA has recognised the scale of reskilling needs and is taking a lead in finding new solutions to this intensifying challenge.This includes boosting the pipeline of potential workers in sectors where demand is already strong and is set to continue growing in the years ahead.JASSAs approach is to offer guidance services aimed at workers so that they can better envision their future career and are aware of where opportunities lie.This helps to orientate people towards growth indus-tries such as IT through reskilling and career development programmes.It also raises awareness of diverse ways of working,including temporary and contract work in high-skilled sectors where agility and flexibility are becoming increasingly important as a means filling workforce gaps and compensating for skills mismatches.As well as creating an environment where more people feel empowered and satisfied at work,the aim of these awareness-raising activities is to grow the pool of people available to meet demand from employers.Demographic trends in Japan are making effective solutions to labour shortages even more paramount.The population is predicted to decline by 20 million by 2050 and people aged 65 and older will account for nearly 40%of the total population.As the working-age population declines dramatically,a significant boost in productivity is essential for sustainable growth.The key enablers for this are educational and career develop-ment programmes that build the necessary skills base.The need to invest in people and drive wide-ranging reskilling is explicitly recognised in the Governments economic plan16.And JASSA will focus on this area going forward to ensure stable employment and build a society where everyone feels empowered and satisfied at work.“Over the last two years,one of the biggest challenges has been to sustain socioeconomic activities.The staffing industry has ensured employment stability and created new job opportunities for workers”Kenichiro Kawasaki,Chair,Japan Staffing Services Association(JASSA)21|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeC A S E S T U D YShowcasing the role of highly qualified flexworkersThe SwissStaffing Flexwork White Paper17 shines a light on why more and more highly qualified workers are in temporary work and on how this is helping employers to access key skills at a time of intensifying staffing squeezes in many sectors.Almost half of highly qualified flexworkers are university graduates and over 84%have a baccalaureate-level education or higher.In addition to a high level of flexibility in terms of working hours and work content,flexwork-ers value the opportunity to work in different companies or sectors and not being bound to one employer;40%of flexworkers flagged this as a major benefit.80%of workers also said that they valued the regular train-ing provided to temporary workers.As a result,flexworkers are filling gaps in shortage occupations,highly specialized roles,and project-based sec-tors,where their work is highly valued.The specific sectors where highly qualified flexworkers are most in demand are:Pharmaceutical&medical technology(31%),IT(21%),banking&insurance(9%)and Health&Social Care(7%).From the perspective of the hiring employers,what are the drivers for har-nessing the expertise of highly qualified flexworkers?Key factors include the acute need for staff,a lack of expert knowledge in the company and challenges in filling vacancies at a time of candidate shortages.Highly qualified flexworkers will often cover vacant positions for a period of time,whilst the process for hiring a new permanent employee takes its course.The ability of flexworkers to hit the ground running and contribute imme-diately is also recognised as a major driver.The sheer importance of their role is summarised by one manager in the healthcare sector:“Without tem-porary specialists we would have to close wards.”22|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeAccording to the World Economic Forum(WEF),1.1 billion jobs are liable to be radically transformed in the next decade.We are on the cusp of a reskilling revolu-tion!In the words of Jenny Taylor,Leader of IBMs Early Professional Programmes:“Skills needs are changing almost by the day”.The trend is further reinforced by another global priority:creating greener economies.This transition will not hap-pen by itself,people must be at the heart of making sustainable change happen,with employers and national governments working together to equip workers with the necessary skills.To address intensifying skills and labour shortages,the priority is to ensure that reskilling initiatives are effective.The global HR services industry is already at the forefront of making positive change happen,by:Helping to identify the most in-demand skills and pre-empting future skills needs Working in partnership with colleges and training providers Feeding into policy debates around skills and the future of work Leading pro-active initiatives(see case study below).Temporary work provides a way of building practical workplace experience but also a means of boosting skills through targeted training opportunities.Taking a lead on reskilling,transitions and career management3Source:WEC data,2020 or latest availableAcross the world,a large proportion of workers receive training through the private employment services industry 33%of agency workers receive training in Brazil,54%in India and 58%in Italy.In Japan and Argentina,the figure hits 100%.In some countries,regulatory change is needed to unleash the full benefits of training for temporary staff.An example of this is the RECs ongoing campaign in the UK to modify the current Apprenticeship Levy(95%of recruitment agencies have been unable to use levy funds on training programmes for temporary workers18).Percentage of agency workers trainedNumber of agency workers trainedArgentina10060.000Brazil332.200.000Bulgaria101.000France13360.000India54614.355Italy58330.000Japan1003.236.152Mexico8565.500Netherlands9-Switzerland1415.147USA84-Source:WEC data,2020 or latest available23|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeeze020406080100Not completed secondary educationUSASwitzerlandSwedenSpainRussiaPortugalNorwayNetherlandsMexicoLithuaniaJapanItalyIrelandIndiaGreeceGermanyFranceFinlandEstoniaDenmarkCzech Rep.CroatiaColombiaChileBulgariaBrazilBelgiumAustriaAustraliaArgentinaCompleted secondary educationCompleted higher education%Figure 5:Average level of education of agency workers,by countrySwitzerlandSwedenSpainRussiaPortugalNorwayNew ZealandMexicoLithuaniaJapanItalyIndiaGreeceGermanyFranceEstoniaCzech Rep.ChileBulgariaBrazilAustriaAustraliaArgentinaHigh020406080100%MediumLowFigure 6:Average level of skills required to perform jobs of agency workers,by country24|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeDriving effective reskilling initiatives is a major discussion theme across the world.But skilling alone is not sufficient to make career transitions faster and more sus-tainable.Effective career support involves a deep understanding of what really motivates people and a recognition that-for the majority of individuals lifelong learning requires a certain mindset.We need to move beyond careers guidance towards genuine careers coaching.The expertise of career management specialists is more important than ever-including knowledge of the job market and an appreciation of the psychological challenges people face in times of change and uncertainty.Using career sup-port services reduces the duration of transitions by half.Bringing people into new placements more quickly benefits not only the individuals concerned but also public finances,as it reduces the need for unemployment benefits and fills short-ages in high-demand sectors.C A S E S T U D YBoosting skills through the Apprenticeship SchoolThe Apprenticeship School(Grande Ecole De lAlternance)supports indi-viduals with their professional development and helps companies to recruit motivated and suitably skilled employees.It covers 17 business sectors and brings together the needs of companies,the expertise of training organisa-tions and the career aspirations of individual job-seekers.Since its creation in January 2016,the school has provided training to over 30,000 work-study trainees.The vast majority of these(77%)were previ-ously unemployed.The aim is to develop the kind of practical and tech-nical skills that are most in demand,as well as interpersonal skills through on-the-job training.Certified training and qualifications are linked to very specific roles such as automated line drivers,road transport drivers,aero-nautical fitters/assemblers and salespeople.Students are placed with par-ticipating employers under temporary work contracts.This provides a new pipeline for employers experiencing recruitment challenges and is a means of exposing individuals to the hiring organisations culture and practices from the outset.The hiring rate for individuals taking part is 87%.In addition to creating tailor-made training courses,the key success factor is the ability to recruit,evaluate and develop the best candidates.Practical knowledge of shortage occupations and evolving skills makes it possible to offer solutions that are regularly reviewed and adapted to the local context and the specific needs of partner companies.25|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeC A S E S T U D YDriving the reskilling agenda in Japan and India The Randstad Skilling Academy(RSA)in India was established to meet the immediate and future skills need of industry,across a wide range of sectors.Rather than following a conventional content-based learning approach,RSA is driven by hands-on learning with live project assignments and reg-ular assessment of the learning achieved.The RSA works with leading training providers and employers to help them reskill and upskill both cur-rent and prospective employees,with a focus on both soft and hard skills.Specific training modules are adapted to the specific needs of employers and participating individuals are provided with the most in-demand and transferable skills.The Randstad Talent Training programme in Japan focuses on three ele-ments of career development:Career planning,skill development and work experience.Temporary workers are provided with career support through a career notebook as well as skills development support.As part of the career planning stage,workers complete a self-analysis and set goals for their career development.E-learning programmes are offered to improve both job-related skills and broad communication skills.Currently,113 online curricula are available and workers can spend as many hours as they want on training and select whatever modules fit their desired career path.“Staffing agencies have established themselves as a bridge to stable employment and as a springboard to a first work experience for young people”Andreu Cruaas,Asempleo“The HR services industry is here to connect the evolving expectations of employers and workers”.Bettina Schaller,President,The World Employment Confederation26|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeC A S E S T U D YDealing with mass lay-offs in manufacturing sectors The role of career management experts.Mass lay-offs have multiple impacts,not only on those affected directly,but also on families,communities and regional economies.There are also psychological and practical implications for those who remain in the business this is often overlooked.Career management experts are at the forefront of facilitating transitions and of mitigating this impact.Here is a concrete example of this contribution in action:A manufacturing company was planning to close a factory employing 3,000 workers over a three-year period.A career transition partner was appointed to support the process over multiple phases of activity,including:Engaging in and providing guidance on the announcement of the clo-sure Finding the right tone,ensuring absolute clarity and pre-empting the specific questions from workers were just some of the priority areas.Agreeing the best way and channel(onsite and face-to-face)to deliver the announcement was also key.Following up with a comprehensive support programme-The career tran-sition company offered manager orientation,onsite career centres and vir-tual job fairs,as well as individual support for the 3,000 individuals affected by the closure.Pre-empting the wider impact-The announcement of the closure had a devastating impact on the local community,especially for young appren-tices who perceived their career prospects to be disappearing.Delivering positive outcomes and successful transitions-In cooperation with local regional authorities,the career transition partner supported the redeploy-ment of workers.As a result,more than 350 companies hired 90 percent of the laid-off workforce.The remaining 10 percent continue to be supported by the career transition programme until they find a suitable new work opportunity.On a general note,career management experts are not only at forefront of facilitating transitions,but can also help influence the scale of lay-offs by encouraging employers to consider alternatives such as reskilling and internal redeployment.27|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeSupporting international recruitment drives and integration of refugeesWith candidate shortages intensifying in many countries,there is one other important short-term solution:hiring staff from overseas.There are political,social,financial and practical challenges associated with international recruitment.But HR services firms are using their expertise and networks to manage these risks and ensure positive outcomes for workers and employers.While international recruitment may sound like a quick-win for employers looking to fill persistent staffing gaps,they nevertheless need external support includ-ing immigration lawyers and relocation experts-to avoid pitfalls.It is important to differentiate between global talent searches for leaders or highly skilled technical staff and high-volume recruitment for less skilled roles and seasonal jobs.There are nevertheless many common reference points,and HR services professionals are at the forefront of providing vital external support on practical issues such as how to:Best reach out to overseas workers(eg:what channels are the most effective)Target the right country(ies)in the first place(availability of in-demand skills)Adapt job descriptions and jobs ads for international audiences Sell the living environment as well as the job role Ensure that workers can settle into their new destination and new role quicklyHarnessing the contribution of migrants who have already travelled to the host coun-try-particularly refugees and displaced workers-is totally different from proactive international recruitment drives.However,in both cases the aim is to identify new pools of potential workers to fill gaps in high-demand sectors.The global employment and HR services sector is first and foremost a people industry.And nowhere is this more important and urgent than in helping indi-viduals and families who have been displaced through war and other cataclys-mic events.National recruitment federations and global HR services providers have taken a lead in responding to the war in Ukraine and refugee crises in other parts of the world;industrys role has been recognised by respected international organisations such as UNHCR(the United Nations Refugee Agency).Helping displaced workers to access job opportunities creates a significant collat-eral benefit:Filling vacancies in high-demand sectors and roles.The HR services industry is uniquely placed to take a lead in skills matching and the nurturing of a partnership approach with relevant bodies to make this happen.An example of this is the work of Assolavoro within the context of the Sectoral Agreement for Refugees in Italy.Uncertainty around how long workers will stay can create con-cern for some employers,but this is where temporary work services can provide a vital outlet.In volatile times,flexible working options are more important than ever for both employers and individuals.428|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeAcross the world,a large proportion of workers receive training through the private employment services industry 33%of agency workers receive training in Brazil,54%in India and 58%in Italy.In Japan and Argentina,the figure hits 100%.In some C A S E S T U D YHelping refugees to integrate and employers to access new workersGI Group responded at speed to the unfurling crisis in Ukraine-partic-ularly,parts of the organisation over the border in Poland.This included the creation of a specific taskforce to support displaced workers and help them to integrate into their new environment as well as possible including accessing work opportunities.There are many lessons to take on board in supporting displaced work-ers.The latest feedback is that the situation has become very fragmented,with many individuals placed in temporary roles leaving after a few weeks because they either went back to Ukraine or found other jobs.In addition to attrition concerns,employers flagged language as a barrier to hiring dis-placed workers.As a company,GI Group has stopped distinguishing Ukrainian workers and has integrated all the processes into a standard staffing framework.GI Group remains in contact with the United Nations High Commissioner for Refugees and is more committed than ever to making a social impact that benefits both individuals and hiring employers(especially in high-demand sectors,for whom displaced workers are a valuable pool of new candidates).One take-away is that it is impossible to fully plan and anticipate everything.The HR services industry is based on flexibility and agility,and so is uniquely placed to intervene swiftly whenever there is the need.C A S E S T U D YEstablishing a dedicated department for international recruitmentRGF Staffing have a dedicated department for international recruitment and have helped refugees from a range of countries including Afghanistan and Syria.Most recently,support has been provided to displaced workers from Ukraine through RGF Staffing in Germany.The package of support services for employees from abroad includes help with sorting out paperwork,medical insurance and the possibility of advance payments.For the Ukrainian refugees,the organization also donated its gross margin over the first few months to the workers them-selves.Language is often the main barrier for overseas workers.In addi-tion to this financial support,Ukrainian refugees were provided with a free translation device so that they could communicate with German-speaking colleagues.Through a SIM card,workers were connected to a powerful cloud-based translation engine that is a big step-up from smartphone apps.Dedicated landing pages for refugees on the company website enabled accessible,easy-to-use chat platforms for them to fill in questionnaires and have real-time chats with recruitment consultants using automated live-translation functionality.Through this extra support,RGF was able to place several hundred refugees with companies throughout Germany.As well as helping individuals to integrate and access work opportunities,this proactive approach has ensured new pools of workers in sectors where demand for staff is high,including logistics,the automotive industry and food manufacturing.29|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeAdopting a sector-specific approach to staffing and skills shortagesAddressing the evolving skills and staffing needs of employers from professional services to logistics,from hospitality to healthcare requires a clear understanding of the sector and of the skills needed to fill specific roles.The HR services sector is stepping up by boosting the sectoral expertise of front-line consultants(see box below)and by taking part in sector-specific skills initiatives(see case study below).As part of the post-pandemic reset,there is an increasing focus on redefining what good work looks like.This includes developing new kitemarks and ways of eval-uating a positive working environment and is key to attracting more people into sectors where demand for staff exceeds supply.Addressing negative and precon-ceived ideas about careers and jobs in specific sectors is not an easy task;these can be linked to a range of factors including workplace culture,pay rates,prestige,working conditions,lack of progression routes and working patterns.Challenging embedded perceptions cannot be a cosmetic marketing exercise;the story of working in specific sectors must reflect the reality.It is an exercise in genuinely making work better for example by enhancing the day-to-day man-agement of temporary staff and providing more training opportunities.The HR services sector is a voice and force for positive change across specific sectors as well as across the broader labour market and employment landscape.5C A S E S T U D YDriving change on equality,skills and working patterns in specific sectors The Confederation of Associations in the Private Employment Sector(CAPES)brings together the four primary staffing associations in South Africa(including WEC members APSO),representing thousands of SMEs and the largest corporates.Sector specific activities focus on working pat-terns,equality,migration and management development.Playing a leadership role on new working patterns in specific sectors through participation in the#4DayWeekSA pilot and Advisory Panel,explor-ing the benefits of 4-day weeks and shifting the dial on a more productivi-ty-based perception of work,rather than a time-based one.Helping to accelerate change on equality at a sectoral level,following the South African governments introduction of sector-specific targets for workplace representation across race,gender and people with disabilities.Employment and staffing experts are at the forefront of industry transfor-mation plans,and act as change agents assisting client companies to meet their transformation goals Feeding into the Critical Skills List(CSL)that informs the visa regime and the employment of foreign nationals.CAPES is also working with the Department of Employment&Labour(DEL)to pilot a Skills Model that tracks demand within different sectors to better inform work permit deci-sions relating to skills which are in short supply,but which do not appear on the CSL.Securing funding for CAPES members to take part in industry specific man-agement development programmes,in conjunction with Wits University.As well as effective leadership,the course focuses on labour market condi-tions and mega-trends across specific sectors.1000 industry players have participated in these programmes since its inception in 2018.30|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeC A S E S T U D YBuilding coalitions around sector-specific skills AKTO is a skills operating company in labour-intensive services that sup-ports 27 professional branches in their skills development strategy.It brings together the representative body for agency work in France(Prismemploi)as well as sectoral associations in a wide range of sectors including hos-pitality,waste management,transport,road maintenance,education and training,cleaning services,manufacturing and retail.The aim is to be a hub for nurturing the skills of today and tomorrow,by:Reviewing and pre-empting the impact of structural and societal changes on skills needs;Anticipating business developments to facilitate access to future skills;Supporting companies and individuals in their professional development;Creating synergies between 27 branches of activity to drive responses to common challenges;Building a strong bridge between training and employment and using this to create new pipelines of workers into high-demand sectors.How are HR services firms boosting sectoral expertise?The industry is taking steps to ensure that front-line HR services profes-sionals have the deep sectoral expertise needed to make an impact and engage with candidates and clients in high-demand sectors.This includes:Hiring people with pre-existing experience or with a clear affinity for a spe-cific sector;Including sector specific insights and intelligence as part of the initial induc-tion programme for frontline recruiters and HR services providers;Ensuring access to sector specific publications and research reports and encouraging attendance at relevant sectoral events and webinars;Membership of relevant sectoral associations and communities;Encouraging frontline recruiters and HR services providers to nurture their own network of sectoral contacts;Capturing and circulating insights from conversations with line manag-ers,departmental leaders and frontline staff within clients organisations in niche sectors;Building relationships with sectoral experts academics,research profes-sionals,think tanks,journalists and policymakers.31|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeBridging the expectation gap between workers and employersHiring campaigns will not succeed unless the evolving needs and expectations of workers and candidates are taken into account.This is being reflected in changes to organisational culture and employer brand revamps.Worldwide,close to 60 million individuals access new work opportunities through the private employ-ment services industry each year.With this comes awareness of what makes peo-ple tick,what factors impact employment-related decisions the most,and what really drives performance,discretionary effort and a sense of belonging.Nurturing this understanding is at the very heart of being a people industry.Understanding worker aspirations is key to the reskilling revolution.In the words of Nicolas Schmit,European Commissioner for Jobs and Social Rights:“Not all workers want to be re-skilled or up-skilled”.This fits with the insight from WEC Board Member Murielle Antille:“In the automotive sector,we need to move from mechanical engineers to software engineers.But only 5%of workers are up for this transition”.Change is hard.Facilitating career transitions must involve a deep understanding of what really motivates people and a recognition that any change is often a source of concern and anxiety.We need to move beyond careers guid-ance towards genuine careers coaching.This includes a firm grasp of human psychology and of peoples expectations during periods of disruption.6“Not all workers want to be re-skilled or up-skilled”.Nicolas Schmit,European Commissioner for Jobs and Social Rights.20“Private employment agencies will continue to collaborate within the HR ecosystem and strive for a better labour mar-ket for both workers and employers”.Bettina Schaller,WEC President“Today,its employees who have the power.They ask potential employers questions about the culture,growth opportunities,technology,mentoring,and more”d more”.Jacob Morgan,Author and FuturistIn the words of best-selling author and futurist Jacob Morgan:“For decades,organisations and leaders assumed people needed to work for them.Not any-more.Today,its employees who have the power”.Expectations and approaches to careers and work are shifting.This must act as a wake-up call for employers across all sectors and regions of the world.The HR Services industry is at the fore-front of making sure that they are listening and of reconciling the evolving needs and expectations of employers and workers.32|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeBridging the expectation gap The industrys role The HR services sectors role as a great connector is underlined by a number of specific initiatives designed to bridge the expectations gap:Active listening-HR services professionals are in daily contact with work-ers and job-seekers.The intelligence gathered informs innovative attraction strategies.Next gen research-Regular worker surveys and jobs market research complement anecdotal feedback from work-seekers and boosts under-standing of what people want from work.Employer brand revamps-HR services providers hear feedback on employers that no one else has access to.This is used to provide strategic employer brand advice to clients.Beyond guidance-Genuine career coaching creates good skills-match-ing,but this must start with an understanding of what motivates people and of expectations during periods of change.Long-term view-HR services firms are building links with schools and uni-versities.This is an opportunity to understand the motivations and expecta-tions of future generations of workersC A S E S T U D YUnderstanding what workers need to thrive at work Recruitment and employment professionals are in daily contact with work-ers and job-seekers providing them with a unique insight into what people want and expect from their work.HR services firms are also at the forefront in conducting leading-edge research on evolving worker perceptions.ManpowerGroups What Workers Want to Thrive report analyses insights from over 5,000 workers across several countries,and provides the follow-ing feedback on what workers really want and what it means to truly thrive at work:Being empowered to grow Nurturing mental fitness and well-being Finding meaning and purpose in their work Defining success for themselvesConducting research and analysis in this area is an important step in bet-ter understanding worker expectations.Even more important is using these insights to attract and retain staff and inform workforce strategies.ManpowerGroup partnered with leading behavioural change company Thrive to help employers turn insights into action.33|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeBuilding a strong collective voice to influence future skills and employment policyAddressing the skills mismatch and intensifying labour shortages requires a con-certed policy response.The HR Services Industry must remain at the forefront of global and national level debates around skills,employment,and the future of work.Creating the right policy and regulatory framework will provide a platform for the sector to use its expertise and energy to maximum effect and play its part in closing skills gaps.Although policy asks will vary by region and country,here are some current over-riding priorities:Avoid disproportionate restrictions on agency work,that jeopardise the vital outlet that this provides to workers and employers.Make sure that social security systems reflect the needs of individuals who chose to work through different forms of contracts.Deliver effective government enforcement so that compliant businesses can thrive and provide vital services to workers and employers Facilitate a genuine partnership approach between public employment services and the private sector HR services industry.At a global level,this cooperation is promoted through ILO Conventions,the focus must be on ensuring that these are ratified by more countries.Ensure that immigration policy is evidence-based and reflects labour market needs.Influence government policy on refugees so that they are able to access employ-ment opportunities.Progress on all of the above will play a central role in helping to address the skills mismatch.The role of national recruitment federations will be more important than ever in amplifying the industrys collective voice on this crucial topic.7“To create a sustainable labour market and stoke economic growth we need to put the people stuff first.”Neil Carberry,Chief Executive,REC34|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeC A S E S T U D YQuantifying the impact of the skills squeeze to influence government policyThe core message of the RECs Overcoming shortages:How to create a sustainable labour market is that labour and skills shortages risk doing signif-icant damage to the UK economy,reducing productivity and ability to invest,grow and raise wages.Robust economic modelling found that with a 10%spike in demand in the economy,and the labour market restricted by shortages,the UK economy would shrink by between 1.2%and 1.6%by 2027,relative to where it would be without these shortages.This could cost the economy anywhere between 30 billion and 39 billion every year equivalent to losing almost the entire UK defence budget.With no action to reduce the shortages,progress on deliv-ering economic growth across all regions,and the transition to net zero will be jeopardised.The RECs report provides a number of recommendations for both business and government and is a rallying call to place the workforce at the heart of their thinking.This will help boost company performance,tackle labour short-ages,raise skill levels and create more productive working environments.C A S E S T U D YPromoting practical solutions on skills policy and related areas The Employment and Recruitment Federation(ERF)issued a proactive call to the Irish government to tap the 855 million surplus in the National Training Fund(NTF)and use it to provide practical support to employers.The NTF is funded by a 1%tax on private payrolls and the message was that,rather than lay dormant,this should be used to fund various pro-business initiatives.In particular,the NTF surplus should be used to fund extra skills and training initiatives,and to help employers across different sectors to hire more apprentices.The ERF has also raised concerns about the impact of labour market reforms such as statutory sick pay and extensions to parental leave on businesses.The argument was that these should be deferred for two years,as businesses struggle to cope with the inflation crisis.ERF campaigning messages have also honed-in on areas such as tax policy and the potential implications for inward investment and the willingness of senior level staff to live and work in Ireland.In the words of ERF President,Donal ODonoghue:“The govern-ment must reduce personal tax burdens to allay concern among inward investors that our marginal tax rates,especially for higher earners,are out of line with international standards”.A proactive approach to pollical campaigning builds traction,amplifies voice and enhances visibility,including coverage by leading national media out-lets like The Irish Times on the proposed changes to the National Training Fund.Promoting practical policy solutions to intensifying skills challenges will remain an integral part of this proactive approach.35|WEC Social Impact Report 2022III.Seven solutions to the skills and staffing squeezeIV.Recommendations and priorities for actionAddressing critical staff and skills shortages is one of the major priorities of our time.This report has sought to quantify the breadth and depth of the challenge and to shine a light on innovative solutions that already exist to solve it.For the global HR services sector,one underlying priority is to ensure that those working within the industry have the right skills,expertise,energy,incentives,management support and sense of purpose to meet this intensifying challenge.And that they can deploy them to the fullest benefit of labour markets and society.Developing and delivering short and longer-term solutions requires decisive and timely collective action.There are a number of specific priorities and recommendations for policymakers,employers and the global HR services sector.Priorities for the HR services sector The global HR services sector must continue to maximise its contribution and build on what is already being achieved in helping to address intensifying staffing and skills challenges.Six steps have been identified for sustaining and amplifying social impact in this area.1.Influence the policy agenda-The HR services sector must be at the forefront of bridging the public policy gap influencing post-pandemic labour market policies to ensure that they reflect the reality of a fast-moving world of work.Creating 21st century social protection systems that support all workers-irrespective of how they choose to work is part of this,as is a pragmatic and evidence-based approach to immigration and skills policy.Proportionate agency work regulation must continue to be an ongoing priority;promoting ratification of ILO Convention 181 remains key to a solid regulatory foundation for the industry.Building campaigning capacity within national federations,sharing global best practice on high-impact advocacy and proactively showcasing the sectors role on both the national and global stage are just some of the ways forward in ensuring that the sector maintains its voice and impact.2.Supercharge the contribution of individual employment and HR services pro-fessionals-Helping employers to attract the staff they need to compete and grow is hugely fulfilling but also challenging.Delivering high levels of social impact in this area will ultimately come down to having highly motivated and highly skilled recruitment and HR services professionals in the front-line of rapidly evolving national labour markets.This has implications for how the industry recruits(with a more comprehensive skills assessment,including human and social skills),trains,manages and incentivises staff,and significant changes are already afoot.Over 3.7 million people already work within the HR services sector globally and there is a genuine appetite to innovate and ensure that recruitment and HR services continue to blossom into a profession of choice for millions of people across the world.3.Spread the word on what works-Addressing skills and staffing squeezes is a priority across the world and spreading the word on what works and learning from each other through the World Employment Confederations global network offers the opportunity harness worldwide best practice and innovative approaches.I36|WEC Social Impact Report 2022IV.Recommendations and priorities for action4.Use data for both short-and longer-term advice-Individuals working within the HR service sector around the world are increasingly adept at accessing and interpreting both national and local labour market data and using it to inform dis-cussions with employers and policymakers.National federations and HR services providers are developing their own research programmes and generating bespoke data.As well as helping to address immediate staffing challenges,this will place the industry at the forefront of pre-empting evolving skills needs.5.Boost sector-specific knowledge and awareness-Addressing the evolving work-force needs of employers from professional services to logistics,from hospitality to healthcare requires a clear understanding of the sector and of the skills needed to fill specific roles.Increased sectoral specialisation will require new approaches to the development of front-line recruitment and employment professionals.6.Take a lead on the future of work debate The global HR services sector is already driving the future of work agenda in many countries.The industry is uniquely placed to pre-empt the changing needs of employers as well as the evolv-ing expectations of workers.37|WEC Social Impact Report 2022IV.Recommendations and priorities for actionRecommendations to employersEmployers and the wider business community need to take a number of steps in making progress on current staffing and workforce challenges in both the short and longer-term.1.Invest in recruitment and workforce planning-Recognising the scale of the workforce challenge is a vital building block.The tide is already starting to turn,with more CEOs and boards now seeing workforce issues as a major priority.This should be manifested in recognition of the need to invest more time and money in people-related issues.2.Be prepared to innovate-New challenges require new solutions.The current skills and staffing squeeze must accelerate evolution in often outdated hiring and workforce management procedures.Being prepared to radically review both the process and criteria used to hire staff is a good starting point.Peer to peer exchanges and access to external experts will also be part of this funda-mental change process.3.Future-proof your employer brand-Ultracompetitive markets for candidates and skills are raising the bar on how employers differentiate themselves and communicate their values to potential new employees and workers.Reviewing what people really think of the organisation as a place to work by collating feedback from candidates and recruitment partners is a vital component.4.Harness external expertise-Building a genuine partnership approach with recruitment and HR services providers has never been more important.This will be the source of both short and long-term solutions to ongoing workforce challenges.It is also a means of making tangible progress on other employer priorities such as making change happen on inclusion,boosting productivity and enhancing overall reputation as a great place to work.II5.Shape the debates around skills and the future of work-Employers must continue to ramp up their collective voice on a range of employment and skills issues.The role of representative organisations has never been more important as addressing current mismatches will be at the heart of post pandemic eco-nomic recoveries is across the globe.Amplifying voice on the regional and sec-tor specific skills agenda is of equal importance and will complement proactive advocacy and campaigning work on a national and global level.38|WEC Social Impact Report 2022IV.Recommendations and priorities for actionRecommendations to government and policymakers National governments and international institutions should take a range of actions in responding to current skills challenges and labour market dislocations.Below are 8 steps for priority areas to accelerate positive change.1.Base policy decisions on data Access to more timely and forward-looking data will inform policy decisions on skills and employment as well as on related areas such as immigration(so that migration policy matches labour market needs).Official statistics often lag,harnessing better data is vital in order to navigate fast-changing labour markets and economies.2.Create long-term and integrated national workforce strategies-An agile,skilled and fulfilled workforce is a driver of wellbeing,equality and social cohesion as well as growth and productivity.This requires long-term planning and synergy between public policy areas such as education,skills,social security and employ-ment as well as transport and childcare.There is also a strong link between inward investment and the availability of a skilled workforce.3.Drive change on a regional level-Effective measures and skills,employability and business support(including access to staff)are increasingly developed and deployed on a regional and localised level.Having the right regional structures in place is a vital building block.Better localised data and input from local employ-ment experts will play a key role here.4.Take public/private co-operation to the next level-In many countries there is already a strong and mutually beneficial relationship between public employment services and the private sector recruitment and HR services industry.At a time of acute workforce challenges,scaling this up through joint initiatives,shared analysis and formal partnership agreements will benefit employers,job-seekers and the economy as a whole.Public-private partnerships are a driver of active labour mar-ket policies and social innovation.III5.Harness diverse forms of work-Regulatory frameworks for temporary agency work on a national level must be proportionate;the starting point must be to maintain and enhance the important outlet that agile solutions provide not only to employers-especially at a time of volatility and staffing shortages-but also to workers.6.Enable more effective career support-Facilitating transitions is increasing impor-tance at a time when labour markets and economies have been disrupted on the back of the pandemic and other external challenges.Addressing labour market mismatches is dependent on better advice and support to individuals as well as businesses.It must move from career management guidance to genuine career management coaching.7.Provide targeted workforce management support for SMEs Small organisa-tions will often not have any dedicated HR staff to manage ongoing workforce issues and recruitment activities.Helping business leaders to enhance their own capabilities in this area is an important role for national government as well as for representative employer organisations.Getting recruitment right whether for permanent,full-time hires or crucial temporary support is even more important for small organisations who cannot afford to carry under-performing staff.8.Promote responsible practices through effective enforcement-Proportionate national regulation and enforcement will create a level playing field for the legit-imate recruitment industry and to protect workers.This is especially important within the context of protecting migrant workers and vulnerable groups.39|WEC Social Impact Report 2022IV.Recommendations and priorities for action40|WEC Economic Report 2022AnnexAverage 75%AUITHRCZINUKJPMXDECHUSFRNOGRNLAT020406080100%Open-endedAgency workFixed-termINMXCHARNOESDEBGEEUKUSFRESBRITNLCLCOJP0102030405060U5550404033313030302925232217161453Average 29%IN0%Source:Members of the World Employment Confederation,2020 or latest year availableFigure 1:Share of agency workers still in employment after their initial assignmentFigure 2:Share of agency workers being converted to direct staff41|WEC Economic Report 2022AnnexARBECOFIFRESNLNZNOGRBGEEDKROSEBRCHMXUSINJP0102030403925252421171717161515131211996650.710010093020406080100%CNAUIEBRAUEEDEINCAITUSARBGSELTNLJPESMX848380807874737373707070422431Source:Members of the World Employment Confederation,2020 or latest year availableFigure 3:Students among agency workersFigure 4:Share of agency workers working full-time42|WEC Economic Report 2022Annex020406080100%NOJPBGBRITFRNLESCH955040302722740.1Men020406080100%WomenJapanUSAMexicoEstoniaFinlandIrelandChilePolandBrazilLithuaniaSwedenSpainItalyBulgariaColombiaNorwayNetherlandsBelgiumFranceSwitzerlandGermanyIndiaArgentinaAustriaFigure 5:Share of agency workers with an open-ended contractFigure 6:Average gender distribution of agency workers,by country43|WEC Economic Report 2022AnnexUSAUKSwitzerlandSpainSloveniaPortugalNorwayNetherlandsMexicoJapanItalyIrelandIndiaGreeceGermanyFranceFinlandEstoniaCzech Rep.CroatiaColombiaChileBulgariaBrazilBelgiumAustriaAustraliaArgentina020406080100E until 2018)55USAUKSwitzerlandSwedenSpainSloveniaRomaniaPolandNorwayNew ZealandMexicoLithuaniaJapanItalyIndiaGreeceFranceFinlandEstoniaDenmarkCzech RepublicCroatiaColombiaChinaChileBulgariaBrazilBelgiumAustriaAustraliaArgentina020406080100%3 monthsFigure 7:Average age distribution of agency workers,by countryFigure 8:Average length of assignment of agency workers,by country44|WEC Economic Report 2022AnnexFigure 9:Average length of contract of agency workers,by countryFigure 10:Share of agency workers covered in a Collective Labour Agreement020406080100%ARATBEBRFRITESCHDESEFINLINJP1001001001001001001001009797848496USASwitzerlandNorwayNetherlandsMexicoJapanItalyIndiaGermanyFranceBrazilAustriaArgentina 12 months020406080100E|WEC Economic Report 2022Annex11 An overview of the ILOs Decent Work Agenda is available here:https:/www.ilo.org/global/topics/decent-work/lang-en/index.htm12 Information on the Good Work Charter can be accessed at:https:/ifow.web-flow.io/publications/the-ifow-good-work-charter12 Information on the Taskforce is available at:https:/www.worldskillsuk.org/insights/skills-taskforce-for-global-britain/14 Speaking at the OECD Local Skills Week in Cork(May 20222)15 For more details on these examples,go to:https:/www.kellyservices.co.uk/about-us/case-studies16 The Basic Policy on Economic and Fiscal Management and Reform(Basic Policies)202217 The full Flexwork White Paper can be accessed here:https:/www.swissstaff-ing.ch/docs/en/Publications/Study/swissstaffing_WhitePaper07_2021_EN1.pdf18 Flexibility works:Why people choose flexible work REC report(2019)19 Speaking at the 2022 World Employment Conference 20 The full“What Workers Need to Thrive report can be downloaded at the fol-lowing link:21 The press coverage in the Irish Times can be accessed at the fol-lowing link:https:/ OECD 2022 Employment Outlook:https:/www.oecd.org/employment-outlook/2022/2 Korn Ferry Global Talent Crunch report.Full report available at:https:/ OECD 2022 Employment Outlook:https:/www.oecd.org/employment-outlook/2022/4 World Economic Forum Upskilling for Shared Prosperity report,in collabora-tion with PWC https:/www3.weforum.org/docs/WEF_Upskilling_for_Shared_Prosperity_2021.pdf5 McKinsey Beyond hiring:How companies are reskilling to address talent gaps survey.The full report can be downloaded at the following link.https:/ Functions/Organization/Our Insights/Beyond hiring How companies are reskilling to address talent gaps/Beyond-hiring-How-companies-are-reskilling.pdf 6 Speaking at the OECD Local Skills Week in Cork(May 2022)7 LinkedIn Global Talent Trends 2022.Full report available at:https:/ 8 Idem9 The Gartner 2022 CEO Survey can be accessed at the fol-lowing link:https:/ Speaking at the 2022 World Employment Conference in Brussels EndnotesNational FederationsCorporate MembersEUROPEAustria(AT)-PD Belgium(BE)-FedergonBulgaria(BG)-NECB Czech Republic(CZ)-APPS Denmark(DK)-Dansk Erhverv Estonia(EE)-EPREL Finland(FI)-HPL France(FR)-Prismemploi Germany(DE)-BAPGreece(GR)-ENIDEAIreland(IE)-ERFItaly(IT)-AssolavoroLatvia(LV)-LPDAANORTH EAST ASIAChina(CN)-CAFST Japan(JP)-JASSA South Korea(KR)-KOHRSIAAPAC SOUTHERNAustralia(AU)/New Zealand(NZ)-RCSAIndia(IN)-ISFIndonesia(ID)-ABADIPhilippines(PH)-PALSCONLATIN AMERICA Argentina(AR)-FAETT Argentina(AR)-CAPE Brazil(BR)-FENASERHTT Chile(CL)-AgestColombia(CO)-ACOSETPeru(PE)-AETT AFRICAEgypt(EG)Target HRSouth Africa(ZA)-APSO 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)-Kompetensfretagen Switzerland(CH)-swissstaffing Turkey(TR)-OIBD United Kingdom(UK)-RECNORTH AMERICA Canada(CA)-ACSESSMexico(MX)-AMECHUnited States(US)-ASAMembers of the World Employment Confederation 46|WEC Social Impact Report 2022www.wecglobal.orgWECglobalWorld Employment ConfederationTour&Taxis BuildingAvenue du Port 86c Box 302 1000 Brussels,Belgium10/22 StephensonDesign.eu
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Economic Report 2022About the World Employment ConfederationThe 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 which the private employment services industry plays in enabling work,adaptation,security and prosperity.This role involves building networks with relevant stakeholders including policy makers,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 Confederations Head Office at infowecglobal.org.Foreword 02 Overview of Private Employment Services 03Key Findings 04 Private Employment Services Industry 05HR services Agency Work 12 Direct Recruitment 18 Career Management 19 MSP 20 RPO 21Regional focus North America 22 South America 23 Europe 24 Asia Pacific 25WEC Intelligence Resources&Products 26Glossary 27Methodology 28Contents1|WEC Economic Report 2022Foreword2020 was a historic year in many respects.The COVID-19 pandemic gripped the world and plunged economies into recession and labour markets into freefall.Countries around the world put in place unprecedented measures to curb infections and safeguard public health.Measures such as social distancing,restrictions on migration and sectoral lockdowns came at a significant cost to economic growth.At the same time,governments delivered mas-sive financial support programmes to help businesses and workers.While the struggle with the pandemic continues into a third year in 2022 and recovery from the global crisis is still underway,it is important to look back and assess the impact of the pandemic and to draw lessons from the past.The private employment services industry was one of many sectors to see a decline in the first year of the pandemic.Turnover of the entire industry,bringing together the five ser-vice segments agency work,direct recruitment,career management,Managed Services Providers(MSP)and Recruitment Process Outsourcing(RPO),contracted by 9%in 2020.This decline marks a halt to the positive annual growth seen for the past couple of years but comes as no surprise.Despite this challenging context,the private employment services industry focused more than ever on making a clear and positive contribution in supporting people,businesses,and labour markets.In 2020,our industry placed more than 58 million people in labour markets globally.By providing training opportunities,facilitating job transitions,fostering inclusiveness,and providing supplementary access to social benefits,the sector played a crucial role in mitigating the impact of the crisis.This role was particularly needed in the healthcare sector,which,thanks to agency work,was appropriately staffed and equipped to weather the crisis.We encourage you to consult our annual Social Impact Reports which provide evidence and analyses of how the private employment services sector generates more value for workers.In 2021,we already experienced strong growth in the private employment services industry,as many of the largest markets began their recovery quickly after the initial and unprece-dented downturn of the second quarter of 2020.As conditions improved and businesses adapted to the new uncertainty brought about by the pandemic,economies and labour mar-kets picked up again.Higher-frequency indicators for the private employment services sector show that as of the end of 2021,several of the largest markets are already back to pre-crisis levels in terms of activity and turnover.As the world of work reinvents itself,the future of the private employment services industry can only be bright!Our sector is certainly ready to seize the opportunities ahead.Denis PennelManaging DirectorEven Hagelien Chair of the Economic Affairs Committee2|WEC Economic Report 2022Overview of the private employment services represented in this reportAgency 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-isations 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 staffing provider.Direct RecruitmentServices for matching offers 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 OutsourcingA service by a third-party specialist provider,to assume the role of the clients 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 ManagementServices 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 Services3|WEC Economic Report 2022Key FindingsIn 2020,when the global COVID-19 pandemic turned economies,labour markets and societies upside down,the private employment services industry,like many other sectors,was heavily impacted.Turnover for the global industry declined by 9.0%in 20201,compared with a 3.1%contraction of global GDP(International Monetary Fund).Agency work turnover,the largest segment of the private employ-ment services industry,was down by 10.0%globally.Direct recruitment turnover dropped by 16.3%,while the MSP and RPO markets contracted by 3.3%and 10.3%respectively.As entire sectors closed for much of the year in order to contain the pandemic,and the services sector the major share of agency work activities was especially affected,these declines came as no surprise.On the other hand,the career management industry grew in 2020,due its countercyclical nature.In economic downturns accompanied by waves of dismissals,the career man-agement industry,and in particular outplacement services,are much needed to transition laid off personnel to new employment opportunities.The largest 15 agency work markets generated 93%of global sector revenues,while the 15 largest direct recruitment markets accounted for 95%of the global turnover in that segment of the private employment services industry.Nearly all of these markets declined in 2020.Most of them saw drops in the double-digit range,with the US agency work and direct recruitment turnover down by 12%and 29%respectively.2 The UK markets contracted by 9%and 38%3 and Germany,France and the Netherlands fared similarly,at least when looking at the agency work mar-kets.Japan,the second largest agency work market after the United States,is the only market to have grown in 2020 when looking at revenues.A part of the growth in the Japanese market can be attributed to rising salaries of agency workers due to regulatory changes,which in turn resulted in an inflation of agencies fees.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 applied2 -11%and-25%in local currency3 -8%and-37%in local currencyThe number of workers placed in jobs by the private employment services sector dropped drastically in most countries in 2020.In total,the industry placed 58 mil-lion people in the labour market in that year.When excluding China,one of the few markets which saw an increase in the number of people placed in jobs,2020 saw an 11%drop in the number of people placed by the agency work sector.The global penetration rate of the agency work sector also dropped in 2020.The rate which indicates the share of agency workers in full-time equivalents among the working population was at 1.5%,down from 1.6%in the year before the pan-demic.Sector activity tends to be highly cyclical.The flexibility provided to labour markets by agency work services acts,on the one hand,as a shock absorber to businesses needing to quickly scale down operations,leading to a relatively quicker reduction in sector activity during uncertainty at the onset of an economic downturn.On the other hand,employment in the sector expands more rapidly than in the overall labour market once conditions show signs of improvement,as businesses can quickly hire new workers.Looking ahead,agency work markets around the world are experiencing a remark-able recovery.The most recent country data indicates several countries being close to or above pre-crisis levels once again towards the second half of 2021 when looking at both volume and value of the agency work sector.While this current edition of the Economic Report focuses on the year 2020,it is expected that in 2021 the industry made up for much of the losses experienced during the previous,unprecedented year.4|WEC Economic Report 2022 Private Employment Services Industry Global Market 2020:465.8bnCareer Management:2.2bnRPO:5.1bnAgency Work:361.4bnDirectRecruit-ment:59.4bnMSP37.8bn.through an MSP 92.6bn13xX %8%1%.through an agency 268.7bnTop 5 Markets(sales revenues)2020:293bn of global revenues63%Private Employment Services IndustryTotal turnover of the global private employment services industry in 2020 is estimated at 465.8 billion($532 bn).Once again,the agency work sector generated the major share of revenues among all five HR service segments of the industry,contributing 78%of global revenues.Agency work revenues stood at 361.4 billion($412.7 bn)in 2020.The revenue share of activities which are purely attributed to Managed Services Provision(MSP)is estimated to be around 8%in 2020(37.8 billion),while the majority of MSP activities can actually be attributed to the agency work sec-tor.Direct recruitment activities resulted in revenues of 59.4 billion($67.8 bn),equivalent to 13%of the global industry turnover.Recruitment Process Outsourcing(RPO)and career management markets remain relatively small in size,at 5.1 billion($5.8 bn)and 2.2 billion($2.5 bn)respectively.While the estimates in this report only include countries that are members of the World Employment Confederation,their combined market share of the global private employment services market is close to 100%.Note:Statistics gathered from WEC members and Staffing Industry Analysts.Around 71%of MSP activities fall under agency work.This is represented in the split of agency work revenues.5|WEC Economic Report 202210-1002030405060%-20-30-40Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q4Q3Q2Q1Q3Q2Q1Agency work activity-Europe(quarterly y-o-y change)GDP growth-EU28(quarterly y-o-y change)1213110910081819202117151614PRIVATE EMPLOYMENT SERVICES INDUSTRY2021 agency work markets rapidly recovered from much of the losses from 2020Source:WEC members;Eurostat In 2021,economic and labour market conditions improved in many countries.Output in most OECD countries surpassed their pre-crisis levels(OECD).The esti-mated global loss in working hours for 2021 is 4.5%for the baseline scenario,compared with 9%in 2020(ILO).Migrant employment had bounced back as well(OECD).With these improved conditions,the agency work industry around the world recovered rapidly from the major decline in 2020.The United States,the largest agency work market globally,already reached pre-crisis levels in the sec-ond quarter of 2021.During that period,the volume of agency work assignments grew by 50%on average compared to the second quarter of 2020,when the industry experienced its most pronounced contraction.In the subsequent quar-ters,agency worker volumes continued expanding on a year-on-year basis,up 31%in Q3 and up 21%in Q4 of 2021.In Europe,the sectors recovery has not been as quick as in the United States,but nonetheless impressive,with most markets being close to pre-crisis levels towards the end of 2021 and some having already surpassed them.The second quarter of 2021 saw impressive growth in agency work activity,up 54%compared with the same quarter in 2020.Here,as in the United States,growth was unprecedented.This is largely due to the fact that the base period for comparison is the quarter during which the impact of the pandemic-induced crisis peaked and resulted in the most pronounced declines observed since these statistics started being collected.Agency work activity in Europe also continued expanding in the subsequent two quarters on average,although at a slower pace.The positive growth rates only just about outpaced the rates of contraction seen in the same quarters of 2020.6|WEC Economic Report 202210-1002030405060%-20-30-40Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q4Q3Q2Q1Q3Q2Q11213110910081819202117151614Agency work activity-US(quarterly y-o-y change)GDP growth-US(quarterly y-o-y change)PRIVATE EMPLOYMENT SERVICES INDUSTRYSource:American Staffing Association;Federal Reserve Bank of St.LouisComparing the current crisis to the previous global crisis,the impact on the sector has been more pronounced and rapid as is the case for economies and labour markets in general.At the same time,the recovery,while not fully achieved at the end of 2021,is just as fast and pronounced.The agency work sector remains a sound indicator of where the economy is head-ing.Historically,sector activity has been highly correlated to GDP growth.Generally,the flexible employment element characteristic of agency work means that,at the onset of a contraction,activity in the sector declines before a drop in overall employment rates typically a lagging indicator.This was visible throughout the global financial crisis and is also observed during the crisis induced by the COVID-19 pandemic.On the other hand,agency work activity is,for the same reasons,among the first sectors to expand again at the turnaround point,when economic outlook improves after a downturn.In Europe,the agency work sector started expanding again on a year-on-year basis in the first quarter of 2021,while overall GDP growth remained negative but close to zero,signalling the onset of the recovery.The most recent monthly and quarterly statistics on agency work sector develop-ments can be accessed on the World Employment Confederation website,in a regularly updated briefing document.7|WEC Economic Report 2022Global sales revenues of service segments:2019 2020%change 2019|2020-10%RPO5.1bn-16%Direct recruitment59.4bn-3%MSP(including agency work activities)130.5bn-10%Agency work(excluding MSP activities)268.7bnCareer management2.2bn 14%PRIVATE EMPLOYMENT SERVICES INDUSTRYMost services decline,except career management Note:Statistics gathered from WEC members and Staffing Industry Analysts.8|WEC Economic Report 2022PRIVATE EMPLOYMENT SERVICES INDUSTRYThe private employment services industry market size contracted by 9.0tween 2019 and 2020,when the global COVID-19 pandemic and subsequent containment measures resulted in the first global economic contraction in more than ten years(IMF).With global supply chains disrupted,labour migration largely restricted and entire economic sectors having been closed,private employment services faced a difficult environment in which to operate.In the second quarter of 2020,the share of the global workforce living in countries with required closures for all but essential workplaces stood as high as 70%(ILO).2020 therefore marked a halt to the positive annual growth observed over previous years.Agency work,the largest segment of the private employment services industry,drove most of the industrys decline and saw an annual drop in turnover of 10.0%.The direct recruit-ment market size saw more a pronounced decline,albeit from a smaller base,down 16.3%in 2020.Turnover generated by MSP activities was down by 3.3%globally,while RPO revenues dropped by 10.3%.Outplacement,the main type of services delivered by the career manage-ment industry,was the only segment of the private employment services industry to experi-ence growth in 2020.Up by 14%,the outplacement sector benefitted from its countercyclical nature in that demand for its services expanded greatly amid the layoff waves seen during the COVID-19 crisis.Virtually all countries were affected by the pandemic,and most have introduced some form of containment measures to limit the spread of the virus.These direct influences,along with indi-rect negative impacts due to global supply chain disruptions,led to economic contractions around the world.In effect,nearly all agency work and direct recruitment markets declined in 2020,many of them at double-digit rates.The decline in the global MSP market was primarily driven by the Europe,Middle East and Africa(EMEA)region and the Americas,with the smaller Asia Pacific(APAC)region having seen an expansion in the market in 2020.RPO markets declined across all three regions.Growth in outplacement was seen across all large markets in 2020,with the US market experi-encing particularly strong growth,driving much of the positive evolution of the sector globally.Global private employment services industry 2020 466bnAgency workDirect recruitmentCareer management Recruitment Process Outsourcing Managed Services Providers-9.0%y-o-y9|WEC Economic Report 2022PRIVATE EMPLOYMENT SERVICES INDUSTRYIn 2020,a combined 190,000 private employment agencies were operating in the 40 countries around the world where figures were available.Branches of agencies around the world employed 3.7 million people(based on figures from 35 countries),delivering employment services to companies and individuals.In most countries,the number of agencies and internal staff declined in the first year of the pandemic.One of the few countries where 2020 saw an increase in operating agencies and employed staff is China( 16%, 15%).When excluding China and considering those countries for which comparable figures were available for 2020 and 2019,the number of agen-cies operating dropped by 3.9%in 2020,while the number of internal staff decreased by 8.6%in the same year.11These 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 contribute to well-functioning labour markets by matching employers with jobseekers.The majority of agencies are in Europe,followed by Asia Pacific,North America and South America.For more regional market information,consult the“Regional Focus”section of this report.1 When including China,the number of operating agencies and internal staff grew by 4.1%and 6.8%respectively in 2020.NOTE:Real figures are most likely higher,as statistics for all countries were not available.190,000Private Employment Agencies:Internal Staff:Temporary work agenciesDirect recruitment agenciesManaged Services ProvidersRecruitment Process OutsourcingCareer management firmsMILLION3.73.7The number of service providers decreases in most countries10|WEC Economic Report 2022China19,290USA13,600Japan6,187Mexico5,300France2,400India1,000Netherlands926Germany783Italy736Brazil720Spain666Poland661Belgium607Australia431Switzerland347South Africa220Sweden179Slovakia*112Austria*89Norway70Portugal*64Czechia*61Ireland48Chile45Argentina45Finland*39Agency work headcounts(000s),2020Slovenia*34Romania*33Russia32Greece31Bulgaria30Lithuania*27Denmark*17Latvia*16Croatia*15Hungary*13Estonia5Luxembourg*3*EurostatPRIVATE EMPLOYMENT SERVICES INDUSTRY58 million people were placed in the labour market in 2020In 2020,at least 58 million people were placed in 38 countries around the world in the labour market by private employment agencies.The agency work sector placed the vast major-ity but recorded a year-on-year decline of 11%(if only including countries for which comparable figures for 2020 and 2019 were available).This figure excludes China,where the number of peo-ple placed by the sector saw an increase of 64tween 2019 and 2020.1 The largest contractions in the number of placements happened in Brazil,India and the United States.In the vast majority of countries,with very few exceptions,the number of agency workers dropped.China overtook the United States in 2020 as the market with most people placed in jobs by the agency work sector,accounting for more than one-third of all agency workers placed in jobs glob-ally.In Japan,the number of agency workers rose as well.Mexico also saw an increase in the number of workers placed by the sector,surpassing 5 mil-lion in 2020,a year before regulation prohibiting the sector from operating came into effect.The ten countries which placed the most agency workers account for more than 90%of all agency workers placed in jobs globally.1 When including China,the global number of people placed by the agency work sector saw an increase of 6%in 2020.Number of people placed by private employment agencies globally:MILLION5858Number of placements through direct recruitment:MILLION3 3Number of placements through temporary work agencies:MILLION555511|WEC Economic Report 2022107.165.736.727.217.118.315.810.08.44.95.34.75.14.73.4Top 15 agency work markets,sales revenues(billion)|annual change(%),2020USAJapanUKGermanyAustraliaFranceNetherlandsItalySwitzerlandBelgiumIndiaCanadaChinaSpainSweden107.1 65.736.727.218.317.115.810.08.45.35.14.94.74.73.4-12%2%-9%-13%-22%-11%-5%-1%-14%-16%-16%-4%-15%-14%HR SERVICESNearly all agency work markets register unprecedented contractionNote:Statistics gathered from WEC members and Staffing Industry Analysts.Figure for the Netherlands is an estimate based on CBS figures.All growth rates are in Euro terms.12|WEC Economic Report 2022HR SERVICESIn 2020,the 15 largest agency work markets represented 93%of the sectors global turnover.The three largest markets the United States,Japan and the United Kingdom contributed 58%of the total.The US agency work industry remained by far the largest market,generating 30%of the global turnover.Europe is the largest region when looking at regional agency work market values,with nine of the largest 15 markets being located in the region.These markets contributed a combined 36%of sector turnover to the global figure.Due to the COVID-19 pandemic and the subsequent economic crisis,all agency work markets in the region have contracted drastically in 2020.Most agency workers in Europe are employed in the services sector,which was shut down for a significant length of time in 2020 during the various phases of containment measures,resulting in these market declines across Europe.France was the hardest hit(-22%),followed by Spain(-15.3%),Belgium(-14.3%),Sweden(-14.1%),Germany(-12.5%),the Netherlands(-10.5%),the United Kingdom(-9.3%),Italy(-4.8%)and Switzerland1(-1.1%).The US agency work market contracted by 12.3%in 2020 due to the global crisis,2 while the Canadian market declined by 16.1%.Turning to the Asia and Pacific region,agency work markets have been more resilient during the pan-demic.The Japanese agency work market grew by 1.9%in 2020.This is partly due to the strength of the manufacturing sector,but also due to regulatory changes stipulating equal pay for agency workers taking effect.As a consequence of the salary increases,agencies rates and turnover were inflated.In Australia,the agency work market size,while having remained stable in Euro terms,actually expanded in constant currency terms.While 2020 brought about major declines in the agency work sector around the world,2021 is marked by a steady recovery of those losses.Many of the largest markets which saw a contraction in 2020 have reached pre-crisis levels again as of Q4 2021.These include Canada,France,Italy,Sweden and the United States.The Dutch,German and Swiss agency work markets remain slightly below,but close to their 2019 levels.1 In constant currency,the Swiss agency work market contracted by 4.7%in 2020.2 In constant currency,the US agency work market contracted by 11%in 2020.13|WEC Economic Report 2022AME RICAS 1.1%GLO BAL 1.5%APAC 1.7%E URO PE 1.2%Agency work penetration rate,2020(%)UK2.9NL2.6CN2.5JP2.3FR2.3BE2.1AU2.0CH1.8AT1.7DE1.7US1.6IE1.6SK1.5SE1.2IT1.2SI1.2NO1.1PL0.7ES0.7CZ0.6LV0.6GR0.5FI0.5PT0.4LU0.4HR0.3AR0.3BR0.3EE0.3LT0.2DK0.2CL0.2RO0.10.1HU0.1INRU0.02Note:Rates are calculated by dividing the number of agency workers in full-time equivalents(sources:WEC members;estimates based on 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.HR SERVICESAgency work penetration rates drop in many countries 14|WEC Economic Report 2022HR SERVICESIn 2020,the global weighted average penetration rate of the agency work sector stood at 1.5%,a decline from 1.6%in 2019.This rate represents the share of agency work in overall employment and can be subject to various factors.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 and hiring and firing,weighing the trade-off between efficiency 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 low penetration rates showcase to an extent the potential future growth of the sector in the country.Due to the flexible nature of agency work,sector employment tends to drop before overall employment during an economic contraction.This explains the decline of the share of agency work employment in the year of the COVID-19 pandemic and economic crisis.In particular,agency workers currently still have potentially reduced access to the much used short-time working-/or furlough schemes,which prevented massive increases in the number of unemployed,specifically in Europe.This could however also mean that the real share of agency work within actual hours worked among employed people is underestimated for 2020,as employment was artificially kept under control in many countries.The Americas saw the larg-est decline in the regional penetration rate,due to a massive contraction in the number of agency workers in Brazil,and a fall in the share in the United States the regions two largest countries in terms of total employed people.In the APAC region,the share of agency work among total employment has grown in 2020,with increases seen in China and Japan.15|WEC Economic Report 2022Global1031032549Europe62823643Eastern Europe33257340Croatia,Czechia,Estonia,Poland,Romania,RussiaSouthern Europe2 0163754Greece,Italy,Portugal,SpainCentral&Northern Europe1112134402Austria,Belgium,Denmark,Finland,France,Germany,Netherlands,Norway,Sweden,Switzerland.APAC203631355Australia,India,Japan,New ZealandSouth America233194871 OtherPublic AdministrationServicesConstructionManufacturingAgriculture Argentina,Brazil,Chile,ColombiaSectoral distribution of agency workers across regions(%)HR SERVICESServices sector employs majority of agency workers,with regional differencesAt a global level,the largest share of agency workers are employed in the services sector(49%),while one-fourth work in the manufacturing industry(25%).Construction is the third largest sector at 10%,while the agricul-tural sector employs just 3%of agency workers globally.16|WEC Economic Report 2022Agency workers in the healthcare sector:2019 2020100202515530% 0.7% 0.6% 4.0% 0.5% 1.0% 10.0% 2.5%HR SERVICESTaking a closer look at the services sector,the share of agency workers working in healthcare services increased in a number of countries during the period of the COVID-19 pandemic.As many branches of the services industry were shut down for a significant time,other sectors experienced shortages in worker numbers,in particular essential and“frontline”sectors.Private employment agencies were well-placed to reallocate workers from shut-down occupations to areas where they were much needed,in effect mitigating the impact of the crisis on employ-ment,while simultaneously providing relief to care workers who were heavily bur-dened during the health crisis.17|WEC Economic Report 2022-29%-2%-4%-5% 9%-38%-23%-8%-11%-10%-26%-32%-9%-9%-26%Top 15 markets in direct recruitment,sales revenues(billion),2020,change 2019/2020(%)NetherlandsSouth KoreaSwitzerlandIndiaSpainItalyNew ZealandIrelandUKJapanGermanyChinaAustraliaUSA15.49.88.46.44.83.60.50.40.4South Africa0.40.70.61.01.12.9HR SERVICESDirect recruitment is the service most impacted in nearly all countriesNote:Statistics gathered from WEC members and Staffing Industry Analysts.Germany figure is preliminary,based on 2020 growth rate obtained from the national statistics office.The global direct recruitment market size dropped to 59 bil-lion in 2020,down by 16.3%from its 2019 level.Turnover in that segment contracted more sharply than the agency work market,both globally and in most countries.As the year 2020 was marked by high uncertainty in terms of the evolution of containment measures,employers were reluctant to create open-ended positions for recruiters to fill.The United States,Australia and China were the largest markets in the direct recruitment sector in terms of value,together gen-erating 57%of the global sectors turnover in 2020.Much of the decline in the global market size is attributed to the sharp contraction in the United States,which saw a drop of 29%in 2020.While the United States remained the largest direct recruitment market,its share of global turnover dropped from one-third to one-fourth between 2019 and 2020.APAC remained the best performing region,with Australia,China and Japans combined direct recruitment market con-tributing 39%to the global market size.Japan was the only market which did not contract during the year of the COVID-19 pandemic,while Australia and China saw less pronounced contractions than the rest of the world.In Europe,many markets saw double-digit contractions in their direct recruitment markets,with the United Kingdom,one of the regions largest markets,down more than any other market(-38%).The Swiss direct recruitment market value also took a significant hit(-32%),as did Ireland(-23%),Italy(-11%),Spain(-10%)and the Netherlands(-9%)18|WEC Economic Report 2022Top 10 career management markets,sales revenues(billion),20200.770.350.220.190.140.110.100.090.090.08NetherlandsAustraliaSwedenBelgiumJapanGermanyUKCanadaUSAFranceHR SERVICESCareer management grows due to counter-cyclical natureThe global career management sectors market size expanded by 14%in 2020,reaching 2.2 billion.Career management is the only segment among the five services of the private employment services industry to have grown in 2020.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 off,by guiding and preparing them for the next step in their careers.Being countercyclical,demand for such services tends to increase during economic downturns.Amid large waves of layoffs resulting from the impacts of the COVID-19 pandemic,career management services were therefore much sought after in 2020,explaining the expansion of the sector.Much of the growth in the global market size was driven by a significant expansion in the US market for outplacement,which represents more than one-third of the global turnover of the sector.In the United States,the government spent relatively fewer resources on keeping workers employed through the use of short-time working schemes,unlike in many European countries.Consequently,the number of layoffs was much higher and demand for outplacement services grew faster.The US market was up around 30%in 2020.While the market grew relatively more in terms of the volume of workers who received outplacement services in the United States,high demand in some specific sectors resulted in shorter transition programmes,as people needed to be moved to new jobs quickly.Shorter programmes,as a consequence,resulted in a slightly muted increase in the value of the market.Together with the US market,the French and Dutch career management markets generated nearly two-thirds of the global market size.Most large European outplacement markets also saw pronounced growth in 2020,albeit less strong than in the United States.Massive investment in short-time working schemes kept the number of people being laid off under control,resulting in a relatively slower increase in demand for outplacement services.European markets grew by around 8%in 2020.Note:Based on estimations by members of the World Employment Confederations Career Management Task Force.19|WEC Economic Report 2022HR SERVICESMSP markets decline in Americas and EMEA,but hold steady in APAC Source:Staffing Industry Analysts.Managed Services Providers,regional market value(billion)AmericasEMEAAPACGlobal2016933631062017103769116201810426711920191346771352020134374130The global Managed Services Provider(MSP)market was estimated at a value of 130 billion in 2020,an annual decline of 3.3%.Representing 57%of the global spend,the Americas is the largest region,home to two of the three largest MSP markets the United States and Canada.By far the largest MSP market,both in the region and globally,is the United States,generating 52%of global MSP revenues.The regional MSP market spend in the Americas dropped by 3%in 2020.The second largest region is Europe,the Middle East and Africa(EMEA),generating one-third of global spend.Nearly half of the regions MSP spend was generated in the UK,which was also the second largest MSP market globally.The EMEA region was the hardest hit in terms of MSP market size,down by 5%in 2020.Around one-tenth of global MSP spend was generated in the Asia and Pacific region(APAC),with Australia and India being the strongest markets.The APAC region held steady in 2020,up by 1%compared to 2019.Despite the contraction in 2020 due to the impacts of the COVID-19 pandemic,MSP markets across all regions experienced pronounced growth over the past years,with the global market spend remaining up by 12%in the three years between 2017 and 2020.In particular,the smaller APAC region expanded rapidly,up by 29%in that period.The more mature,larger regions grew by 8%(Americas)and 16%(EMEA)during that time.Firms which specialise in MSP are third-party service providers taking over a client companys contingent workforce management.The major share of MSP spend(71%in 2020 according to Staffing Industry Analysts)comprises temporary employees and independent contractors-meaning that the spend of a large part of MSP programmes can,in effect,be attributed to revenues from the agency work sector.This share has been decreasing over the past years.The remaining share of MSP spend is raised by statement of work and/or outsourcing activities by the service provider.20|WEC Economic Report 2022HR SERVICESRecruitment Process Outsourcing,regional market value(billion)AmericasEMEAAPACGlobal0.91.11.8201620170.91.42.220181.11.92.720195.71.01.72.520205.24.64.23.8RPO markets decline across all regionsSource:Staffing Industry Analysts.Note:No figures for 2017 available.2017 growth is estimated at 13%by Staffing Industry Analysts.The global market value for Recruitment Process Outsourcing(RPO)stood at 5.2 billion in 2020,equivalent to a decline of 9%from 2019.Nearly half of the global RPO market value is generated in the Americas region(48%),which saw a decline of 7%since 2019.The region containing Europe,the Middle East and Africa represented one-third of the global RPO value and contracted by 12%.The smaller Asia and Pacific region was down by 10%.While RPO markets were down compared to 2019,2020 marked the halt of an impressive series of expansions over the past years.Globally,the value of RPO markets was still up 13%compared to 2018.Across the different regions,RPO markets were also still by double-digits.Similar to direct recruitment services,RPO is primarily focused on filling open-ended vacancies.During the first year of the pandemic,companies were more reluctant to create new open-ended vacancies in times of high uncertainty.In effect,RPO and direct recruitment markets contracted more than MSP and agency work markets.RPO is a service whereby a third-party provider takes over a clients recruiting department.Going beyond the provision of a contingent workforce,RPO providers characteristically also specialise in recruiting a firms direct employees,without remaining a part of the resulting employment relationships.21|WEC Economic Report 2022REGIONAL FOCUSNorth America remains driven primarily by the US marketTrends in the region are primarily driven by developments in the United States,the largest market in North America and globally by various metrics.Globally,36%of people placed in the labour market by the industry were placed in North America,with 72%of placements in the region completed in the United States.Nearly one-third of global agency work revenues were attributed to the region,with the larg-est market globally the United States generating 94%of the regions agency work turnover.In 2020,the regions agency work market contracted by 13%.North America also accounted for more than half of the global MSP market,nearly half of RPO revenues and one-third of direct recruitment turnover.460,300Internal StaffPlacementsMILLION27,300Private Employment AgenciesAgency Work Revenue113.3BILLIONMSP Revenue72.2BILLIONDirect Recruitment Revenue15.8BILLIONRPO Revenue2.3BILLIONCountries included in figures:CanadaMexicoUSA18.918.922|WEC Economic Report 2022REGIONAL FOCUSSouth America remains small in market size,largely driven by Brazil350,000Internal Staff5,500Private Employment AgenciesPlacementsMILLIONNote:Statistics gathered from WEC national federations and Staffing Industry Analysts.Countries included in figures:ArgentinaBrazilChileColombiaSouth America remained the smallest region when comparing the above metrics to other regions.The region is to a large extent dominated by the Brazilian market,which accounts for the vast majority of the private employment services industrys placement of people in the labour market in South America.2%of global place-ments happened in this region,while just below 1%of agency work turnover was generated here,most of which in Brazil.The Brazilian agency work market has been contracting over the past years and saw an above-average decline in 2020,resulting in a fall in the regions market share overall.South Americas agency work market size dropped by 37%in 2020.0.90.9Agency Work Revenue2.6BILLIONMSP Revenue2.2BILLIONDirect Recruitment Revenue0.3BILLIONRPO Revenue0.2BILLION23|WEC Economic Report 2022REGIONAL FOCUSEurope sees contraction across all markets Nine of the 15 largest agency work markets globally are located in Europe,making it the region generating the larg-est share of global agency work turnover.A combined 40%of global agency work revenues was raised in European markets.The European agency work market contracted by 13%in 2020.Europe also generated just under one-third of the global market values of the direct recruitment,MSP and RPO markets.The region also stands out as the one with the largest number of operating private employment agencies.More than 40%of agencies are in Europe,responsible for placing around 17%of all people placed in jobs globally.373,600Internal Staff75,500Private Employment AgenciesBILLIONAgency Work Revenue145.3BILLIONMSP Revenue41.7BILLIONDirect Recruitment Revenue17.6BILLIONRPO Revenue1.5BILLIONAustriaLithuaniaBelgiumLuxembourgBulgariaNetherlandsCroatiaNorwayCzech Rep.PolandDenmarkPortugalEstoniaRomaniaFinlandRussiaFranceSlovakiaGermanySloveniaGreeceSpainHungarySwedenIrelandSwitzerlandItalyTurkeyLatviaUK Countries included in figures:PlacementsMILLION Note:Statistics gathered from WEC national federations and Staffing Industry Analysts.BILLION9 924|WEC Economic Report 2022REGIONAL FOCUSPositive trends in Japan drive the APAC regionCountries 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.Most of the industrys placements of people in the labour market took place in the APAC region,to the largest extent driven by China,which placed more workers than any other country globally.Nearly half of all placements,therefore,happen in the APAC region.The agency work market in the region generated just above one-fourth of global industry turnover.Japan is the second largest agency work market globally and the only major market to have grown in 2020,resulting in positive develop-ments in the region overall.The region is characterised by its strong direct recruit-ment sector,which accounts for 43%of the global direct recruitment market.67,100Private Employment AgenciesAgency Work Revenue95.3BILLIONMSP Revenue12.6BILLIONDirect Recruitment Revenue24.9BILLIONAustraliaChinaIndiaIndonesiaJapanNew ZealandRPO Revenue1.0BILLIONPlacementsMILLIONNote:Statistics gathered from WEC national federations and Staffing Industry Analysts.28.228.2948,000Internal Staff25|WEC Economic Report 2022Market DataRegulatory EnvironmentCapacity building&benchmarkingLabour Market ResearchNational Federation MembersLabour MarketsPrivate Employment Services IndustryAccess key global and regional data Global Labour Market Fact Sheet Global Labour Shortage Statistical BriefingStay informed about the latest research on Changing World of Work WEC/ADAPT The Future of Work monthly joint newsletterFollow the latest labour law develop-ments across the world WEC-IOE Industrial Relations and Labour Law monthly joint newsletterBenchmark your federation to your peer members National Federations ReportLearn how to build up your capacity as a federation 4 National Federation Playbooks Capacity building/benchmarking/discussion forumsUnderstand the staffing regulatory landscape Annual Regulatory ReportForecast the staffingregulatory evolution Quarterly Staffing Executive Regulatory OutlookGet on-demand staffing regulatory information Tailored regulation briefings upon requestTrack the industrys key figures Annual Economic ReportCompare national staffing markets National Markets Dashboard(full file)National Markets Dashboard(one pager)Follow monthly evolution of agency work markets Development of the agency work sector statistical briefingCompare staffing and labour market indicators WEC-SIA European Employment BarometerLearn about worker trends and data Social Impact ReportGet more information from the HO Tailored datafiles upon request26|WEC Economic Report 2022WEC Intelligence Resources&ProductsANNEXMembers OnlyANNEXGlossary of Terms Used and AcronymsAgency WorkAgency 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,Labor Hire in Africa or Temporary Staffing in the USA.Career ManagementCareer 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 RecruitmentServices 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 Convention 181),including search and selection.Managed Services Provider(MSP)MSP is a service whereby a company takes on primary responsibility for managing an organisations contin-gent workforce programme.Typical responsibilities of an MSP include overall programme management,reporting and tracking,supplier selection and man-agement,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 clients site.An MSP may or may not be independent of a staffing provider.Penetration RateDaily 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 IndustryAgency 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 clients 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.27|WEC Economic Report 2022MethodologyANNEXThe data presented in this report is for the calendar year 2020,unless stated otherwise.Sources vary depending on the data,although the majority of the figures are collected by the World Employment Confederation from its national federation members.This is primarily the case for the agency work market.Some national federations gather data directly from their respective members,whereas others collect data from public sources or research partner institutions.The World Employment Confederation also partners with Staffing Industry Analysts(SIA),allowing for a more complete assessment of the industry across the various HR ser-vices(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 segments have been included:agency work,direct recruitment,MSP,RPO and career management ser-vices.Due to the fact that a major share of MSP activi-ties 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 differ for the two service segments in question.To minimise the extent of double counting,a certain share of total MSP sales revenues was sub-tracted and attributed to the total agency work sales revenues.This share is estimated by Staffing Industry Analysts to be around 71%.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 staff.Note also that 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 or on the methodology applied,please contact Robin Lechtenfeld,Labour Market Intelligence Officer at the WEC Head Office(robin.lechtenfeldwecglobal.org)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 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 con-tent,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 pub-lished should be mentioned as World Employment Confederation Economic Report 2022.Disclaimer28|WEC Economic Report 2022Members of the World Employment Confederation ANNEXNational FederationsCorporate MembersEUROPEAustria(AT)-PD Belgium(BE)-FedergonBulgaria(BG)-NECB Croatia(HR)-HUP Czech Republic(CZ)-APPS Denmark(DK)-Dansk Erhverv Estonia(EE)-EPREL Finland(FI)-HPL France(FR)-Prismemploi Germany(DE)-BAPGreece(GR)-ENIDEAIreland(IE)-ERFItaly(IT)-AssolavoroLatvia(LV)-LPDAALithuania(LT)-LIIA NORTH EAST ASIAChina(CN)-CAFST Japan(JP)-JASSA South Korea(KR)-KOHRSIAAPAC SOUTHERNAustralia(AU)/New Zealand(NZ)-RCSAIndia(IN)-ISFIndonesia(ID)-ABADIPhilippines(PH)-PALSCONLATIN AMERICA Argentina(AR)-FAETT Argentina(AR)-CAPE Brazil(BR)-FENASERHTT Chile(CL)-AgestColombia(CO)-ACOSETPeru(PE)-AETT AFRICASouth Africa(ZA)-APSO Luxembourg(LU)-FES Netherlands(NL)-ABU Norway(NO)-NHOSH Poland(PL)-Polskie Forum HR Portugal(PT)-APESPE RH Romania(RO)-AFSRU Russia(RU)-ACHAZ Slovakia(SK)-APAS Slovenia(SI)-ZAZ Spain(ES)-ASEMPLEO Sweden(SE)-Kompetensfretagen Switzerland(CH)-swissstaffing Turkey(TR)-OIBD United Kingdom(UK)-RECNORTH AMERICA Canada(CA)-ACSESSMexico(MX)-AMECHUnited States(US)-ASA29|WEC Economic Report 2022www.wecglobal.orgWECglobalWorld Employment ConfederationWorld Employment ConfederationTour&Taxis BuildingAvenue du Port 86c Box 302 1000 Brussels,Belgium02/22 StephensonDesign.eu
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