Revenue for companies in Sweden’s staffing, recruitment and outplacement sector fell in the fourth quarter of 2024, down by 17% compared with the same period in 2023.

“The weak economic conditions and the 24-month rule in the staffing law continue to create a very challenging market,” Patrik Eidfelt, director general of staffing trade body Kompetensföretagen, said in a press release.

The revenue of the industry’s 35-largest companies amounted to just over SEK 7 billion (US$ 692.4 million) during the final quarter of 2024, SEK 1.459 billion lower than the same quarter in 2023.

Industry and manufacturing accounted for about half of the decline, but negative trends were observed across geographic regions, service areas and professional sectors.

“The weak economy has hit the industry hard. When the economic situation is uncertain, clients hold back. Combined with the 24-month rule in the staffing law, this explains the poor performance,” Eidfelt said.

The 24-month staffing law was introduced in 2022 as part of Sweden’s Agency Work Act to protect staffing agency workers, according to a report by law firm Bird & Bird. Under the law, they must be offered a permanent position if they have worked for a company for more than 24 months.

Meanwhile, demand for IT consultants increased by 19% between the third and fourth quarters of 2024, Kompetensföretagen data showed.

However, the worst-performing sectors included healthcare, down 37.4%, and sales and customer service, which fell 28.8%.