The World Employment Confederation, the voice of the employment industry at global level, publishes its annual economic report. The year-long research conducted in 50 countries addresses the challenges of a changing world of work and illustrates the role of the employment industry in enabling work, adaptation, security and prosperity.
The employment industry enables 50 million people to find work
Across the markets covered in the report, current trends show a diversification of the employment industry: agency work had a net employment impact of more than 43 million jobs created with the USA, China, Japan and India leading the ranking. The highest-placed European country is France in 5th place with 2 million hires. In terms of penetration rate, agency work represents a limited part of the global working population averaging just 1.7%. The USA leads the field at 2.2%, followed by Japan (2%) and Europe (1.9%).
Employment agencies also guided some 3 million individuals through their career management or job search. Managed Services Providers (MSP) and Recruitment Process Outsourcing (RPO) continue to gain acceptance and penetration as a tool for more effective recruitment with 2.5 million people worldwide involved. Finally, direct recruitment totaled 2.1 million placements in 2015.
Employment agencies enable adaptation by closing skills gaps and placing unemployed youth in work
While the report clearly demonstrates that change is underway, forecasts vary in different industries and regions: on average, before entering into agency work 33% of workers were unemployed while just 21% returned to unemployment a year later. On another note, 43% of people starting agency work were previously employed and 71% remained employed a year later. Almost one third of agency workers are under the age of 25 and declare upskilling via agency work is key to staying employable.
“These numbers show two things: first, agencies provide both an entry point to the labour market and a stepping stone to permanent hiring. Second, the industry creates decent jobs that would otherwise not exist. In India for instance, 92% of companies would not make permanent hires if agency work was not available”, says Denis Pennel, Managing Director at the World Employment Confederation.
The employment industry reduces frictional unemployment and has an impact on public budgets
Employment agencies contribute to reduce frictional unemployment by shortening the inevitable time delays in finding a new job and ensuring better and faster matching of supply and demand for work. The report finds an inverse correlation between the evolution of hours worked via an agency and the EU unemployment rate in the EU-28. There is also evidence that high rates of agency work penetration tend to reduce undeclared work. The report highlights striking facts in India where unemployment rates have been cut by up to one half in states where the agency penetration rate is above 0.5 %. “By reducing frictional unemployment, the employment industry contributes to public budgets. This saves governments the cost of unemployment benefits while the provision of flexible workforce solutions leads to a reduction of undeclared work, increasing social charges and corporate tax being paid”, comments Annemarie Muntz, President of the World Employment Confederation.
RPO and MSP usage have a big impact on HR KPIs
Outsourcing of the recruiting function has risen steadily in the past few years. Notably, RPO adoption has grown by 32% from 2011 until today. This practice is especially beneficial for organizations that fill roles with high turnover and consistently require specific skill sets. Companies that invest in an RPO provider declare they are able to reduce hiring costs by 38%. While 71% of “best-in-class” organizations are more likely to use a Managed Services Provider.
About the World Employment Confederation
The World Employment Confederation is the voice of the employment industry at the global level, uniting labour market enablers from 50 countries and 8 of the largest international workforce solutions and brings access to and engagement with international policymakers (ILO, OECD, World Bank, IMF, IOM, EU) and stakeholders (IOE, trade unions, academic world, think tanks, NGOs). It will be celebrating its 50th anniversary during a global conference to be held in Paris on September 28th and 29th.
The World Employment Confederation strives for recognition of the economic and social role played by the employment industry in enabling work, adaptation, security and prosperity in our societies. In a fast changing world of work, the enabling functions provided by the employment industry is more important than ever (http://changingworld.work/). Thanks to its network of 169 000 employment agencies and 1.5 million HR specialists, the employment industry has been shaping the world of work since 1967.
To download the full report read the source here.