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Sweden – Weaker demand expected for staffing services

14 March 2012

The staffing industry in Sweden experienced a peak in 2011 with many firms reporting record revenues in their fourth quarter results but the trend may not last – it is unclear which direction the industry is heading in the coming six months according to Bemanningsforetagen, the Swedish Staffing Association.

A new survey by Bemanningsforetagen shows that about a quarter of staffing agencies expect to reduce their staff in the coming three months as demand has dropped by -60%. And over 66% of companies in February reported that their business has worsened in the last three months.

Overall, this signals a deterioration in the economic cycle but, according to the survey, the majority of companies in the industry are optimistic about the next six months, as 61% are expecting an increase in demand. This leaves many with the hope that the downturn in the Swedish economy will be relatively short.  

But a recent study conducted by Monster shows that recruitment activities in Sweden have gone down in February by -6% as 2012 started with an overall decline in hiring levels.

“While the Monster Employment Index Sweden recorded positive annual recruitment demand consistently throughout 2011, we’re seeing a different picture at the start of 2012, with a mild overall decline in recruitment levels,” commented Carl Silverstolpe, managing director, Monster Scandinavia.

“However, despite the overall retraction in online recruitment levels, there are still bright spots, with more talent being sought in industry sectors including IT as well as research and development.”

Commenting on the general challenges that the staffing industry is facing in Sweden, the Director of SSA, Henrik Bäckström said to Staffing Industry Analysts that current regulations also hamper the growth of the industry.

“We are waiting for the Swedish government to implement the agency work directive (AWD) into Swedish Law. We are keen to lift restrictions for our business in both law and collective agreements. We are also, as all other Swedish employer organizations, renegotiating our collective agreements this spring. Also in this case we are aiming for better regulations for our industry,” he said.                              

“The Swedish staffing market is young (15 years) and quite small (1.5 % penetration rate). So there seems to be quite high potential for growth at least for some companies,” said Mr Bäckström.  

Bemanningsforetagen estimates that the Swedish staffing industry employs around 76,000 people on an annual basis in the country. 

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