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Spain – Market conditions deteriorating, says Norte Grupo CEO

03 January 2013

Javier Carrasco, CEO of Norte Grupo HR Solutions, shared his views on the state of the Spanish staffing market in an interview to the daily El Mundo.

After expanding by 3.6% in 2011, the revenue generated by temporary work agencies declined by 15% in 2012, to reach €2,200 million. It is estimated that since 2007 the Spanish staffing industry's turnover has fallen by more than 40%. The market is increasingly consolidated as small companies either have to close down or be acquired ​​by larger groups. Furthermore, those that remain open have undertaken restructuring and staff reductions to adapt to the new market conditions.

The Norte Group CEO believes temporary work agencies manage about 14% of all temporary contracts in the country. Therefore, Carrasco argues that private recruitment agencies should have a greater role to play in the labour market and would bring professionalism and stability. He adds that this would also reduce expenditure on unemployment benefits, arguing that intermediation of private employment agencies increases the employability of workers

In sectors such as industry or services, private agency penetration rate exceeds 20%, mainly because employers in these sectors require a temporary workforce to cope with peaks and troughs in demand.

Carrasco also provides his views on the labour reform voted last year. He believes that this was too little too late: “if it had come into force ​​four years ago, then many companies would have had alternatives to closure. Today, offering flexibility mechanisms are important but their development is insufficient. We must study what works elsewhere in Europe as we are lagging behind in our country.”

He went on to say: “The law already allows for collaboration between public employment services and temporary employment agencies. Unfortunately, no progress has been made ​​in establishing partnerships with the regions. It is now more necessary than ever to move in this direction because the private employment agencies can contribute strongly to the efficient management of talent search and training of employees.“

Carrasco believes that “the times have gone when unskilled workers were receiving competitive salaries”. Instead, Carrasco adds that the Spanish economy and the labour force should step up a few notches in the value chain and re-focus on “the knowledge related sectors, research and development. “

Asked whether he believes economic growth will come back in the third quarter, Carrosco acknowledges that some macroeconomic indicators are beginning to offer a different picture to that of recent years and certainly agrees that at the end of 2013 the first signs of recovery may be in sight. But in terms of employment, Carrasco does not think there is any real good news to expect before 2014.

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