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How an ever-more sophisticated workforce solutions industry is supporting companies in navigating a complex economic landscape

Opinion by Denis Pennel

 

Organisations are operating in an increasingly complex and fast changing economic environment.  Markets are highly volatile and companies need to be equipped to respond quickly to the ebb and flow of demand. Being in a position to meet this unpredictability requires an agility of approach and a willingness to recognise that in today’s global economy, change is the only true constant.

The employment and recruitment industry is uniquely placed to understand the needs of both businesses and workers. It provides workforce solutions that enable businesses in realising their potential and it supports workers in an unstable and often ill regulated employment landscape

More than 70 million people around the world gained access to the labour market as a result of the employment and recruitment industry in 2015. Today the industry is offering an increasingly sophisticated range of HR services in response to the changing needs of economies and markets. Let’s take a closer look at some of them.

For many years now the employment and recruitment industry has provided agency work services to plug gaps in demand and bring on board specific skills not available in-house. These services while established, and very well organised, continue to evolve in line with emerging needs.  Today’s agency workers meet an increasingly diverse set of skills required by companies – including highly-skilled professionals working in areas such as IT, marketing and accounting which comprise almost one quarter of agency workers.

Training is also a service that continues to be provided by the recruitment and employment industry.   Despite high levels of unemployment there is a global skills mismatch which the employment and recruitment industry is doing its part to address. The sector trained some 1.5million workers in 14 different countries in 2013, allowing them to enhance their employability and remain in the labour market.

A further area of buoyant growth is search and selection. Also known as direct recruitment, these services match employment offers with applications and support client companies in sourcing the right candidates.  Ciett figures record that its members hired 17.7 million candidates around the world in 2013, and the true number is likely to be appreciably greater. Latin America, and in particular Brazil is one of the largest markets, placing 767,000 people in 2013, closely followed by Europe where the industry placed over 634,000 people and Japan and Australia where the search and selection sector is also strong.

Indeed the effective matching of supply with demand in the workplace is an area of continued growth for the sector as unstable job markets, increasingly disengaged workers and ongoing discrimination lead to inefficient labour markets. The recruitment and employment industry recorded an 8-10% increase in fees in 2015, and with fees often based on the salary of the worker, this growth also demonstrates that the placements are increasingly for executive and white-collar positions which command higher salaries. Most of these agencies are now also moving digital with online services encompassing online sourcing, matching and staffing as well as crowd working. Online staffing is the most prominent and involves direct contract between hirers and workers and a clear transaction process. This already is an established sector and is still growing fast.

Outplacement is yet another service offered by the sector in supporting companies in today’s workplace reality. Outplacement services provide short and long-term support to employees who have been terminated. Provided individually or in groups they help people in securing a new career or position and are most usually paid for by the terminating employer. Latest figures show the largest markets for these services to be Brazil, Sweden and Belgium.

The most recent and emerging service for the recruitment and employment services sector is Recruitment Process Outsourcing – RPO. This describes the services provided by a third-party specialist who assumes the role of the client’s recruiting department by owning and managing all or a part of its recruitment process and relationships related to it.  Typically this does not include payroll but can include sourcing, matching and possibly hiring and all the skills, technologies and process methodologies along the way. RPO is a subset of business process outsourcing and was worth $4.4bn in 2015, with the industry placing almost 1.7million people in Brazil as well as making headway in markets including Mexico, Sweden and Romania.

In this age of six sigma, no-fault production and just-in-time delivery, often the only area left where organisations can make a difference is in their people. Recruiting the right people with the right skill-sets and then retaining and motivating them in the face of ongoing change can offer significant competitive advantage for companies.  The recruitment and employment industry can provide the services that make the difference between an organisation that is good, and one that is truly great.

About Denis Pennel

Managing Director of Ciett and Eurociett, Denis Pennel is a labour market expert with deep knowledge and years of experience relating to employment at global and EU levels. He recently published “Travailler pour soi”, a book about the new realities of work.

Follow Denis on Twitter @PennelDenis

About Ciett

As the International Confederation of Private Employment Services, Ciett is the authoritative voice representing the interests of agency work businesses. Founded in 1967, Ciett consists of 51 national federations of private employment agencies and eight of the largest staffing companies worldwide. Its main objectives are twofold: to help its members conduct their businesses in a legal and regulatory environment that is positive and supportive; to gain recognition for the positive contribution the industry brings to better functioning labour markets.

Follow Ciett on Twitter @ciett_waytowork

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