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Netherlands – Medium sized recruitment agencies more optimistic

13 September 2013

Competition in the staffing market has intensified over recent years, with small and medium sized recruitment agencies more confident in their future market position than bigger firms, according to research by economic and social policy research firm Panteia.

The research into the differences between employment agencies, funded by the trade association NBBU, was compiled from an extensive survey of 300 recruitment agencies and 100 clients. The survey found that many respondents expect that competition for market share will increase in the coming years.

This was especially true for larger companies with almost 70% of large companies expecting more or tougher competition from other recruitment firms. This is true for only 40% of small recruitment firms. The most optimistic are the medium sized enterprises. In addition to offering recruitment services, they predict an increase in client demand for payroll services.      

Marco Bastien, director of NBBU, commented: “It is remarkable that the smaller parties remain very positive in such a difficult market. There are a lot of comments along the lines of ‘that just gives me more opportunities’.”

Smaller temporary recruitment agencies are able to place temporary workers on longer contracts than large agencies, 40% longer on average compared with 25% for larger firms.

Michel Winnubst, a researcher at Panteia, said: “The explanation for this may be that small staffing companies have a strong bond and good contract with the worker and client.” This assumption also explains why small and medium sized staffing companies are so successful in getting the unemployed back into the job market. The research shows that small and medium sized firms assisted 72,000 job seekers off of unemployment benefit in 2011.

At the same time small staffing companies are more dependent on a limited number of customers, and also a limited number of services. This dependence allows the small recruitment firms to offer customisation options to clients, however, it also carried substantial risks in the form of the loss of a client can have a significant impact on company revenue and profitability.

The Dutch staffing market has become increasingly tight in recent years. Turnover and the number of hours worked by temporary workers has continued to fall. For the Dutch market, Staffing industry Analysts forecasts a single digit decline for 2013 as a whole. Staffing Industry Analysts is scheduled to release an updated list of the Top 50 largest staffing firms in the Netherlands on Monday.

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