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Germany – Staffing firms prepare for market decline

23 May 2013

The temporary staffing market in Germany contracted last year due to higher pay rates for agency workers with staffing companies expecting a decline in revenue this year. This is according to new survey by market researcher Lünendonk.

This found that the market volume in the staffing industry decreased -2% year-on-year to €20.3 billion in 2012. The 25 largest recruiters in Germany, which include Adecco, Randstad, Hays and ManpowerGroup, have on average recorded revenue declines of -0.6%, it said.

Lünendonk suggests that staffing companies in the country now expect revenue to further drop by -0.5% in 2013 while the number of agency workers is also projected to decline. Staffing Industry Analysts own forecasts for the German staffing market this year suggest a much steeper decline.

German employers have warned of rising labour costs. This is in part due to new collective agreements in the staffing industry, which have raised pay rates for agency workers in a number of major sectors. Weaker economic developments have also impacted the industry.

The German staffing market has shown signs of a slowdown for over a year. The number of agency workers has been on the decline since early 2012 while overall employment levels have increased. Demand for staff has overall dropped although the labour market still shows high levels of activity. Skilled workers remain sought after in the energy, metal, electrical and automobile industry.

According to research by Staffing Industry Analysts, the top 50 firms accounted for 56% of the market in 2012, representing €10.9 billion in collective revenue. 

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