The global employment industry recorded a sales turnover of €491 billion in 2016, according to a new report from the World Employment Confederation. The WEC’s market estimate is different to Staffing Industry Analysts as the WEC bundle a number of complementary services to comprise the “employment industry” including RPO, MSP and career management. The WEC’s estimate for the size of the agency work market and direct recruitment is identical to Staffing Industry Analysts’ estimate for the global staffing market in 2016 of €388 billion.  

The report showed that agency work represented the largest business segment and grew by 10% when compared to 2015. Agency work accounted for 71% of the total annual sales revenue. The report stated that the “fortunes of the agency work sector are closely tied to the economic cycle with companies hiring agency staff during periods of growth in order to meet extra demand.”

Within the segment of agency work, Japan showed growth of 8%, year-on-year while Europe also grew with placements of people under 25 years of age on the rise and Germany, the Netherlands, Italy and Spain also performed well. In the US, the world’s largest agency work market, the report suggests that business remained stable as did China, the world’s third largest market.

Direct Recruitment (permanent placement) accounted for €37.8 billion of the total employment industry with US, UK, Australia, Germany, Canada, Japan and China the largest markets.

Using data from Staffing Industry Analysts, the WEC state that Management Service Provision (MSP) was the second largest sector in the report, representing 20% of the total and generating €97 billion. It grew by 11% during 2016 with the top ten markets being US, UK, Australia, Germany, Canada, India, Netherlands, Switzerland, Belgium and France.

Again, using Staffing Industry Analysts’ data the WEC report mentions that Recruitment Process Outsourcing (RPO) was the sector to grow the most year-on-year with a 13% expansion across all regions and a turnover of €3.4 billion.

Career management fell slightly in 2016, driven largely by a fall in outsourcing due to fewer layoffs as economic growth returns. The sector reached €2.7 billion with 37% of sales in North America, 33% in Europe, 18% in APAC and 3% in Latin America.

 World Employment Confederation president, Annemarie Muntz, commented, "The employment industry grew in 2016, despite mixed macroeconomic conditions, and the global unemployment rate fell to 5.7% - down from 6.1% the previous year. The employment sector plays a key role in reducing unemployment around the world, including for vulnerable workers such as women - who are more likely to be unemployed across all age groups - and youth - three times more likely to be unemployed than the general population."

In Europe, nearly 9.5 million people were placed in agency work in 2016, according to the WEC. In direct recruitment, Europe placed also 1.5 million people and the largest markets by value are UK, Germany, Ireland, Netherlands, Switzerland, Belgium and France.

In North America, the WEC Report showed that the US accounted for 93% of total revenues.

In Latin America, Brazil was the strongest market, accounting for approximately 20% of total revenues. RPO growth stood at 34% year on year compared with a global average of 13%. Brazil also had the highest agency work penetration in the region, followed by Mexico, Colombia, Chile and Argentina. Direct recruitment in Brazil recorded €0.3 billion in revenue. Meanwhile, Mexico showed growth of 6.6% year-on-year in employment services.

In the APAC region, Japan, Australia and China were ranked among the ten best performing markets in both agency work and direct recruitment. Japan, the second largest agency work market showed year-on-year growth of 8% recording over €40 billion. In agency work, China recorded over €30 billion in revenue in 2016 and recorded revenues of €2.4 billion in direct recruitment.

Meanwhile, Australia saw the second highest agency work penetration rate of 3.6% and global revenues of €10 billion. The report also stated that India represents an emerging market in the HR solutions industry, especially in MSP where it had revenues of €1.8 billion and ranks sixth in the world.

The RPO market in APAC recorded revenue growth of 14% over the past year, according to the WEC.