Published on 25th February 2025
After a strong rebound in 2022, private employment agencies faced strong headwinds in 2023. The Economic Report 2025 of the World Employment Confederation indicates that agency work activity in terms of hours worked declined across the globe with only a few exceptions. Several drivers entered into play, including a challenging economic environment, skills mismatch in a tight labour market, and geo-political tensions. Labour markets were gradually loosening, inflation stood above central banks’ targets, and global GDP growth was meagre.
The number of people placed in jobs by the HR Services industry globally remained, however, broadly stable in 2023 at just over 60 million individuals. The strong decline in the US (-13%) was balanced by strong growth in India (+16%), China (5%), the UK (11%) and Japan (2.4%).
“In these challenging times, HR services agencies have worked further on improving their efficiency and reached out to more people in need of a job, be it via physical outlets or online platforms,” analyses Marius Osterfeld, Chairman of WEC’s Economic Affairs Committee. “More than ever, HR services agencies act as catalysts for economic growth, bridging the gap between talent and opportunity. By fostering flexibility and efficiency, they create win-win outcomes for workers and employers alike.”
The HR services industry turnover grew 0.5% in nominal terms in 2023, largely as a result of an increase in workers’ remuneration. Sales revenues in the largest HR services market, the US, declined 11.2% in 2023, while Japan, Germany, the UK and Australian markets experienced positive nominal growth. Among smaller markets, France and Sweden have also experienced nominal declines (-0.8% and -5.4% respectively), while Japan (+8%), China (+5%), Australia (+5%) and India (+4%) all registered healthy nominal growth.
Early 2024 indications suggest that the agency work activity dynamics in Europe and North America continued being challenged, while buoyant in Asia and South America. Despite the fact that the number of open job postings continued inching downwards, the gap remains, not least due to a skills mismatch arising from the green and tech transitions. This points to a great need and opportunity for training and (re-)skilling of job seekers.
“As WEC’s recent research ‘The Work We Want’ has shown, it has never been this difficult to plan for future workforce needs. HR managers all over the world are coming to the conclusion that flexible workforce solutions are the way forward to address skills gaps, meet seasonal demands, and adapt to market needs in this rapidly changing environment,” explains Viktorija Proskurovska, Labour Market Intelligence Manager at the World Employment Confederation. “Beyond finding people a job, HR services agencies empower workers. Through skilling and career guidance, they enable them to enhance their value and access better opportunities.”
WEC’s Economic Report also offers socio-demographic data on agency workers, such as gender distribution, education levels and length of assignment.
Explore our Economic Report 2025 for an in-depth review of 2023 data, including regional perspectives, and an early look at 2024 trends!
