By Denis Pennel

The employment industry has four enabling functions.  It enables work by creating more job opportunities; it enables adaptation by improving employability and facilitating transitions; it enables security for both workers and business, and it enables prosperity by contributing to a nation’s GDP via sales revenues and increasing worker income so driving purchasing power.

In this column I want to focus on the contribution of our industry to enabling prosperity and how this directly supports client companies in being more competitive.  Research by IW Consult in Germany has found that companies which use employment industry specialists to support them in fulfilling their staffing needs enjoy an increase in revenue that is on average 5% higher than companies who do not outsource their staffing needs. While a survey from the Aberdeen Group also demonstrates that companies using innovative workforce solutions such as recruitment process outsourcing (RPO) managed services provisions (MSP) are able to reduce hiring costs by 38%. To the same extent, most efficient organisations are 71% more likely to use a Managed Service Provider (36% vs 21%) to support the management of agency and temporary workers.

So why is this?  Well, by working with a company to help fulfil its expectations of workforce solutions the employment industry can move swiftly and support the organisation in reacting quickly in response to increased demand.  This results in higher revenue growth.  An employment agency also takes away much of the HR administrative burden from a company, leaving it free to concentrate on what it does best – run its own business.  By freeing-up organisations to focus on their core business the employment industry is helping the company to maintain its competitive edge and stay ahead of the game.

The highly volatile economy of the past 10 years has seen a constant turnover of jobs and people and there are no signs that this will change any time soon.  With the idea of a job for life and a gold watch on retirement consigned to the history books, the recruitment and retention of staff has become a full time job.  By working with the employment industry a company can place the whole, time-consuming process in the hands of experts.  With their experience and understanding of the labour market, the industry players assume full responsibility for the sourcing, selecting, appointment and often the subsequent retention of staff. They support companies in streamlining their functions, thereby maximising the value that they derive from their workforce and ensuing that their HR needs are structured in an optimal and effective manner.

Many companies face the challenge of identifying and managing talent on a global scale.  They are looking to secure the right talent at the right level and to manage the types of employees, different skillsets and contractual arrangements across continents in order to maximise opportunities in a sustainable way.  Managing the ‘workforce mix’ and structuring workforce solutions that use different contracts and forms of work – including full time, part-time, outsourced etc are crucial to providing companies with the flexibility, capacity and knowledge they need to remain competitive.  Working with the employment industry companies can be confident they are accessing legally secured workforce solutions that also offer risk management.

Over recent years the employment industry has identified this as a growing and important trend, and the sector has responded to this need by extending the range of services that it offers.  These now include agency work, direct recruitment, career management, RPO and MSP.. Annual figures from the latest WEC Economic Report show that 2 million people were recruited via search and selection activities including both white and blue collar workers.  RPO is also a fast-growing area of the employment market.  As a form of HR outsourcing it does not include payroll administration but instead focuses on the sourcing and matching of candidates for user companies and employers.  Staffing Industry Analysts estimate the size of the RPO market as some €3.3bn (2015) and the latest World Employment Confederation Economic report shows that 2.2 million people were recruited under RPO services.   The employment industry is also growing its role in career management, working with people who have been terminated to help them secure new positions and careers.  The market is estimated to be worth €3.0bn and recent figures show 3 million people were outplaced by the industry in the past year.

Companies can be confident that working with the employment industry they are accessing an efficient and close-knit community that can take on global assignments and support them in both sourcing and placing people across multiple geographies and skill sets.  Today’s employment industry around the world turns over some €415 billion from its services and employs over 1.66 million HR consultants around the globe.   With over a quarter of a million physical agencies the local branch network ensures that client organisations can also tap into detailed on-the-ground knowledge of local labour markets in making recruitment decisions.

In turning to employment experts, companies are ensuring that they retain their competitiveness.  They receive the very best advice and outcomes in fulfilling their HR needs, while not losing time and shifting focus away from their core business activities.

About Denis Pennel

Managing Director of the World Employment Confederation and of the World Employment Confederation Europe, 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 WEC

The World Employment Confederation is the voice of the employment industry at global level, representing labour market enablers in 50 countries and 7 of the largest international workforce solutions companies. The World Employment Confederation brings unique access to and engagement with international policymakers (ILO, OECD, World Bank, IMF, IOM, EU) and stakeholders (trade unions, academic world, think tanks, NGOs). 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 WEC on Twitter @WECglobal