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2011 Edition (based on figures available for 2009) The agency work industry around the world ECONOMIC REPORT

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Page 1: Ciett economic report_2011

2011 Edition (based on figures available for 2009)

The agency work industry around the world

ECONOMIC REPORT

Page 2: Ciett economic report_2011
Page 3: Ciett economic report_2011

The agency work industry around the world ECONOMIC REPORT

2011 Edition (based on figures available for 2009)

Page 4: Ciett economic report_2011

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In 2009, the global agency work industry continued to feel the impact of the economic downturn that started in the USA in 2007, and quickly spread to the rest of the world. Certain countries were hit harder than others, while some continued to grow. The trends in this report go some way to showing that the openness and the socio-economic fabric of national economies and the flexibility of their labour markets account for the difference across countries.

Overall, the total number of agency workers worldwide fell 6% in 2009, compared to 2008, amounting to nearly 9 million full-time equivalents on a daily basis. In parallel, global total annual sales revenues also fell by 16%, amounting to €203 billion. The negative

impact of the economic crisis on the labour market in general, and the agency work sector in particular, began in spring 2008 and accelerated in 2009. This report goes on to begin to describe the strong recovery made by the agency work sector in the first half of 2010.

In 2009, some markets such as Brazil and South Africa continued to grow, boosted by their rapidly expanding economies, which were only temporarily set back by the crisis. However, most mature markets continued the declines which began in the previous year.

Agency work plays - and still has the potential to play further - a valuable role in easing transitions within and into the labour market. Agency work creates

jobs that would not otherwise exist, enhancing companies’ competitiveness and workers’ employability, thereby promoting a labour market that corresponds better to peoples’ - and companies’ - needs and aspirations.

In global markets emerging from crisis, the agency work industry’s capacity to anticipate and match labour market needs with the required skills is even more crucial, as agencies serve as impresarios for workers, immediately identifying job vacancies, providing training, and facilitating the transition from unemployment to work, from one assignment to the next. In addition, agency work prepared the ground for a job-creating economic upturn, helping companies face the ongoing global competitive pressure, increasing labour

Introduction

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market participation, and furthermore, accelerating and increasing the number of jobs created as the economy recovers.

Now more than ever, the agency work industry plays a key role in improving the functioning of the labour market, by facilitating the match between supply and demand of labour, by securing upwards transitions for agency workers, and by providing more work opportunities for more people.

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Content1. The players 11

2. Agency workers in numbers 19

3. The profile of agency workers 28 a. General trends b. Agency workers’ motives & satisfaction

4. Agency work’s contribution to a better functioning labour market 46 a. Transitions b. Job creation c. Inclusion & diversity

5. Companies’ rationale to use agency work 65 6. Agency work and the economic recovery 72

Page 8: Ciett economic report_2011

The key facts & figures

8

The players

• There are 72,000 private employment agencies and 169,000 branches worldwide, employing 741,000 internal staff

• In 2009 the total annual sales revenues of the top 10 private employment agencies worldwide accounted for 29% of the total agency work market

• In 2009 the global total annual sales revenues amounted to €203 billion, down 16% from 2008

• Japan is the world leader with 24% of total annual sales. The USA represents 22% of the global agency work market, followed by the UK at 12%

• Europe is the leading regional entity by total annual sales revenues, accounting for 40% of global total annual sales revenues

Agency workers in numbers

• In 2009 nearly 9 million agency workers in full-time equivalents were employed by private employment agencies across the globe, down 6% from 2008

• The agency work penetration rate is 1.7% in Japan and 1.5% in Europe and 1.3% in the USA

• The average number of hours worked by an agency worker during one year is nearly half as much as a full time worker

• Most agency work assignments are more than one month long

The profile of agency workers

• Nearly three in five agency workers are aged less than 30

• Three in four agency workers have at best finished their secondary education

• A significant proportion of agency workers do not seek a permanent employment

• The motive to work via an agency is usually to find a permanent job

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The contribution of agency work to a better functioning labour market

• Agency work facilitates transitions in the labour market

• Agency work contributes to reducing unemployment especially by serving as a stepping-stone into the labour market

• The higher the agency work penetration rate the lower the level of undeclared work

• Private employment agencies contribute to upgrading the skills of agency workers

• Vulnerable target groups use agency work as a means of entering the labour market

Companies’ rationale to use agency work

• Agency work improves companies’ competitiveness

• Agency work is not a substitute for permanent employment

• Reasons to use agency work are generally to meet peaks in demand or to fill in for absent employees

Agency work and the economic recovery

• Agency work is a bellwether of the economic situation

• As a cyclical business - and a forecasting indicator - agency work has suffered from the economic crisis, but agency workers have been the first ones to be hired when the economy recovers

• Agency work limits the risk and duration of unemployment

• The private employment agency industry has rebounded sharply since the recession

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1. The players

• There are 72,000 private employment agencies [PrEAs] worldwide, with 169,000 branches and 741,000 persons as internal staff

• Total annual sales revenues for the top 10 PrEAs account for 29% of the global agency work market

• Global total annual sales revenues amounted to €203 billion in 2009

• Japan is the world leader with 24% of total annual sales. The USA represents 22% of the global agency work market, followed by the UK with 12%

• Europe is the leading regional entity by total annual sales revenues, accounting for 40% of global total annual sales revenues

11

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There are 72,000 private employment agencies...

From 2008 to 2009 the number of private employment agencies [PrEAs] increased by 1% to reach 72,000. Europe accounts for 48% of all PrEAs, the Asia/Pacific region for 34%, North America for 8% and Africa for 4%. Japan, Germany and the UK are the top three countries in terms of number of PrEAs, accounting collectively for 56% of all agencies worldwide. As recognised by the ILO: “Private employment agencies play an important role in the functioning of contemporary labour markets. For the past three decades, the increasing need to provide workers and services to a rapidly growing and flexible labour market has led to the spectacular development of these agencies.” **

Number of private employment agencies

* figures for 2008** ILO - Private employment agencies, temporary agency workers and their contribution to the labour market | 2009

Japan UK

GermanyUSA

NetherlandsAustralia

South AfricaBrazil

South KoreaDenmark

FranceAustriaPoland

CanadaPeru

HungaryColombia

SwedenMexicoFinland

NorwaySpain*

Slovakia Turkey

PortugalCzech Republic

ChileBelgium

RomaniaArgentina

ItalySlovenia

MacedoniaGreece

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000

20,000 11,500 9,078 6,000 3,640 3,500 3,000 1,611 1,419 1,347 1,200 1,200 1,086 945 722 667 610 500 500 450 400 363 355 283 265 215 179 140 129 92 85 59 27 9

Page 13: Ciett economic report_2011

ThE PlAyErS

13

Number of branchesFrom 2008 to 2009 the number of branches increased by 1% to attain 169,000; the Asia/Pacific region accounting for 55%, Europe for 28%, and North America for 12%. Japan, the USA, and the UK are the top three countries by number of branches, accounting together for 72% of all branches worldwide.

The “branch to PrEA” ratio varies greatly from country to country, from a staggering 34.5 branches per PrEA in Italy to fewer than one per private employment agency in Germany. This difference can be explained by the very high concentration of the Italian agency work market, characterised by a small number of large companies with an extensive network. This is in contrast to highly fragmented markets, such as Germany, characterised by a large number of PrEAs, often operating from a

... with 169,000 branches worldwide

* figures for 2008

ThE PlAyErS

single local branch (some German companies operate without any branches, while there is also a number

of dormant, non active agencies influencing this number). The global average is 2.3 branches per PrEA.

Japan USA

UKGermanyAustralia

South AfricaFrance

NetherlandCanada

ItalyPoland

Czech RepublicSouth Korea

Spain*Austria

BelgiumHungarySwedenNorway

BrazilSlovakia

ArgentinaPortugal*RomaniaSlovenia

ChileGreece

0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 90.000

83,808 20,000 17,000 7,064 7,000 7,000 6,500 5,285 3,616 2900 2,941 2,069 1,983 1,700 1,500 1,234 977 850 700 489 465 430 427 194 140 102 16

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741,000 people were employed as internal staff by PrEAs in 2009

From 2008 to 2009 the number of internal staff [HR consultants and back-office people working in branches] decreased by 10% to reach 741,000. Europe accounts for 30%, the Asia/Pacific region for 26%, and South America for 25%. The top three countries in terms of internal staff are Japan, Brazil, and the USA, accounting together for 65% of all internal staff worldwide.

The global average is 4 people employed as internal staff per branch, and 10 per PrEA. This illustrates that the agency work industry is still mostly composed of small and medium-sized companies, despite the presence of several large multinationals operating worldwide.

Internal staff employed

* figures for 2008

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000

Japan Brazil

USAUK

GermanyNetherlands

FranceSweden

ItalyBelgium

MexicoSouth Africa

PolandArgenPnaAustralia

FinlandHungaryNorway

South KoreaRomania

Czech RepublicChile

SlovakiaPortugal*

SloveniaLuxembourg*

Greece

185,000 169,635 120,000 108,833 44,700 34,000 23,000 11,000 9,000 6,482 6,100 5,500 4,100 3,550 3,500 3,000 2,885 2,340 2,032 1,472 1,440 1,348 1,254 750 420 307 183

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ThE PlAyErS

Top 10 staffing companies in billions of $In 2009 some of the main global players continued to feel the impact of the economic crisis. Adecco, with $21.3 billion in total annual sales revenues, remains the market leader. Randstad is the second largest PrEA with $17.3 billion, followed by Manpower with $16.7 billion.

The top 10 PrEAs worldwide accounted for 29% of global annual sales revenues in 2009

Source: Staffing Industry Analysts 2009 - www.staffingindustry.com*Consolidated figures for Recruit Staffing and Staff Service

Adecco Randstad Manpower Allegis Group

Kelly Services

Recruit Staffingand

StaffService*

USG People Hays PLC Advantage Resourcing

Robert Half

25.0

20.0

15.0

10.0

5.0

0

21.3

17.316.7

4.94.3 4.2 4.2 3.8

3.22.7

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16

Global total annual sales revenues totaled €203 billion

In 2009, the global total annual sales revenues for the agency work industry amounted to €203 billion, a decline of 16% compared to 2008, reflecting the ongoing of the impact of the crisis on major economies, such as the USA and the UK.

Global annual sales revenues in billions of € *

Source: Ciett national federations

83

1996 1998 1999 2002 2003 2004 2005 2006 2007 2008 2009

130

147157

150160

191

233

256

243

203

300

250

200

150

100

50

0

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17

ThE PlAyErS

Agency work sales revenues split per countryIn 2009, Japan is the world leader with 24% of global annual sales. The USA represents 22% of the global agency work market. The UK remains the third largest market worldwide with 12% of global total annual sales revenues. Europe accounts for 40% of global total annual sales revenues, Asia/Pacific for 35%, and North America for 22%.

In 2009 Japan and the USA are global agency work market leaders by total annual sales revenues

Source: Ciett national federations

Rest of World15%

Japan 24%

UK 12%

France 8%

Netherlands 5%

Germany 6%

Australia 4%

Brazil 4%

USA 22%

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1818

Japan, the USA, and the UK are the three largest agency work markets in 2009

Japan, the USA, and the UK together account for 52% of PrEAs worldwide, 72% of branches, 54% of internal staff, 61% of total annual sales revenues, and 47% of agency workers in full-time equivalents.

The UK has the lowest “branch to PrEA ratio” and the highest “internal staff to branch ratio”. This can be explained by the high level of fragmentation of the UK agency work market, characterised by a majority of small private employment agencies that operate locally. Japan has the lowest “agency worker to branch” and “agency worker to internal staff” ratios, and the USA the largest. These figures must be assessed carefully, bearing in mind that there might be a significant amount of dormant agencies and branches in Japan.

This difference can also be partially explained by the fact that Japanese agency workers work an exceptional

76% of the average annual hours worked by a Japanese employee with a full-time open-ended contract.

Comparison of the 3 largest agency work markets in the world

Japan USA UK

Number of PrEAs 20,000 6,000 11,500

Number of branches 83,808 20,000 17,000

Number of agency workers 1,098,191 2,010,000 1,068,197

Number of internal staff 185,000 120,000 95,865

Branch to PrEA ratio 4.2 3.3 1.5

Internal staff to branch ratio 3 6 5.6

Agency worker to branch ratio 13 100.5 6.3

Agency worker to internal staff ratio 6 16.8 11.1

Country’s share of total global annual sales revenues 24% 22% 12%

AW penetration rate 1.7% 1.3% 3.6%

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2. Agency workers in numbers

19

• nearly 9 million agency workers in full-time equivalents were employed in 2009.

• The number of agency workers has risen by over 3.8 million since 1999.

• In 2009 the European average penetration rate of agency work was 1.5% and the South American average 0.8%.

• In 2009 the Japanese and American agency work penetration rates were respectively 1.7% and 1.3%.

• Agency workers work nearly half as much as full-time permanent employees.

• Most agency work assignments are more than one month long.

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9 million agency workers were employed in 2009

In 2009 the total number of agency workers worldwide amounted to nearly 9 million in full-time equivalents, a decrease of 6% compared to 2008. Europe accounts for 34%, North America for 23%, and the Asia/Pacific region for 14%.

The USA employs nearly as many agency workers in full-time equivalents [2.01 million] than the second and third biggest suppliers of agency workers combined, respectively Japan [1.1 million], and the UK [1.07 million]. Together, the USA, Japan, and the UK account for 47% of all agency workers assigned worldwide. South Africa is the fourth largest market in the world with 924,499 agency workers in full-time equivalents, ahead of Brazil [902,000], Germany [625,000] and Colombia [550,000].

Daily average number of FTEs °

° Full-time equivalents defined as the total number of hours worked by all agency workers in a country over a period of one year divided by the average number of hours worked over a period of one year by a worker with a full-time job with an open-ended contract

* figures for 2008

0 500,000 1,000,000 1,500,000 2,000,000

USAJapan

UKSouth Africa

BrazilGermany

ColombiaFrance

NetherlandsItaly

Spain*Australia

South KoreaArgentina

PolandBelgium

AustriaSwitzerland

SwedenMacedonia

Portugal*Peru

Czech RepublicChile

RomaniaHungary

DenmarkNorwayFinland

Uruguay*Slovakia

Bulgaria*Greece

Luxembourg*Slovenia

Lithuania

2,010,000 1,098,191 1,068,197 924,499 902,000 625,000 530,000 447,348 212,651 162,000 141,064 100,000 83,775 76,454 71,914 71,759 57,230 56,950 46,000 45,230 45,000 42,500 35,625 29,112 22,153 22,153 21,227 20,186 20,000 15,000 14,492 5,400 5,087 4,300 2,828 823

Page 21: Ciett economic report_2011

AGEnCy worKErS In nUMbErS

21

The number of agency workers worldwide increased from close to 5.2 million full-time equivalents in 1999 to nearly 9 million in 2009.

In the last ten years, the number of agency workers in Europe has greatly increased, partially as a result of the progressive liberalisation of certain tightly regulated labour markets, notably in Italy, Germany, and the Nordic countries, and the opening up of new markets in Central and Eastern Europe.

Outside Europe the number of agency workers has nearly doubled between 1999 and 2009, on account of the gradual deregulation of the Japanese labour market, and the advent of emerging markets, such as Brazil and South Africa, on the global scene.

The number of agency workers has increased by 3.8 million since 1999

ns = non significant; nlr = not legally recognised; na = not available; * = estimated

AGEnCy worKErS In nUMbErS

Number of agency workers [in daily FTEs / 1.000]1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

EUro

PE

Austria 21 24 30 33 31 38 44 47 59 67 68 57Belgium 60 63 71 68 66 66 73 78 88 95 92 72Bulgaria na na na na na na na na na na 5 5

Czech Republic na na na na na na na na na na 35 36Denmark 7 7 8 10 10 11 13 17 21 17 21 18

Finland 9 8 9 11 11 12 14 16 18 28 32 20France 458 515 604 602 570 555 570 586 603 638 604 447

Germany 246 276 328 341 318 330 385 444 580 715 760 625Greece na na na na na na na na na 8 8 5

Hungary ns ns ns ns 30 39 53 54 55 55* 55* 22Ireland 9 10 25 25 25 25 25 25 30 35 35* 35*

Italy 10 26 69 67 82 132 154 157 184 222 225 162Lithuania na na na na na na na na na na na 1

Luxembourg 2 3 4 4 4 4 4 4 5 5 4 4Macedonia na na na na na na na na 2 2* 2* 5

Netherlands 180 186 183 178 169 154 157 176 207 233 242 213Norway 11 11 11 12 11 10 12 15 24 25 26 20Poland ns ns ns ns ns 19 25 27 35 60 90 72

Portugal 33 45 45 45 45 45 45 45 45 45 45 45Romania na na na na na na na na na na 30 22Slovakia ns ns ns ns ns ns 11 na na na 14 14Slovenia na na na na na na na na na na 3 3

Spain 110 133 133 126 123 123 124 130 141 160 141 141* Sweden 18 24 42 38 37 29 30 32 37 59 59 46

Switzerland 30 34 39 38 37 36 41 49 61 70 69 57UK 696 761 1,027 1,027 1,036 1,111 1,175 1,219 1,265 1,378 1,220 1,068

Subtotal Europe 1,900 2,126 2,629 2,625 2,605 2,739 2,955 3,120 3,460 3,917 3,885 3,214

rEST

oF

wo

rlD

Argentina 47 46 48 47 34 54 70 81 88 96 96 76Australia na na na na na na na na na na na 100

Brazil na na na na na na na na 800 859 876 902Chile na na na na na na na na 86 33 30 29

Colombia na na na na na na na na na na na 550Japan 307 395 537 612 693 743 890 1,060 1,220 1,330 1,400 1,098

Mexico na na na na na na na na na 25 24 24* Peru na na na na na na na na na na na 43

South Africa ns ns ns ns ns ns ns 300 300 300 500 924South Korea ns ns ns ns ns ns 50 57 66 75 78 84

Uruguay na na na na na na na na na na 15 na USA 2,530 2,600 2,700 2,300 2,160 2,380 2,670 2,910 2,960 2,960 2,660 2,010

Subtotal rest of world 2,884 3,041 3,285 2,959 2,887 3,177 3,680 4,408 5,520 5,678 5,679 5,775

ToTAl worlD 4,784 5,167 5,914 5,584 5,492 5,916 6,635 7,528 8,980 9,595 9,564 8,989

Page 22: Ciett economic report_2011

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Outside Europe agency work penetration rates vary widely

Agency work penetration rates are determined by the level of maturity of the market in which they evolve. Mature agency work markets are characterised by high penetration rates, indicating a potent blend of large user bases, strong economic growth, and generally relevantly regulated markets. At a mere 1.1% of the total regional active working population, the relatively low penetration rate of agency work in South American countries reveals the region’s considerable potential for growth.

Agency work penetration rates outside Europe in 2009*

* Defined as the number of full-time equivalents - as supplied by Ciett National Federations - divided by the total active working population - as published by the ILO

South Africa Colombia Japan USA Brazil Chile Argentina South Korea EU Average

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

6.5%

1.7%

1.3%

1.0%

0.4% 0.4% 0.4%

1.5%

2.8%

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23

AGEnCy worKErS In nUMbErS

In Europe, the level of regulation and degree of economic development explain the differences in pace of growth of the agency work industry. Recently, countries such as Germany and Poland have revealed their potential, but each for very different reasons: Germany as a heavily-industrialised economy, slowly freeing itself of very strict regulatory measures, and Poland as a budding regional leader, rapidly catching up its Western European counterparts. The steady growth from 1996 to 2007 halted abruptly in 2008 and continued its decline with a penetration rate drop of 0.2% across Europe in 2009.

The average European agency work penetration dipped from 2007 to 2009

ns = non significant ; nlr = not legally recognised ; na = not available

Agency work penetration rates in Europe since 19981998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Austria 0.6% 0.7% 0.8% 0.9% 0.8% 1.0% 1.2% 1.2% 1.5% 1.7% 2.0% 1.4%

Belgium 1.6% 1.6% 1.7% 1.7% 1.6% 1.6% 1.8% 1.9% 2.1% 2.2% 2.1% 1.7%

Bulgaria na na na na na na na na na na 0.2% na

Czech Republic na na na na na na na na na na 0.7% 0.7%

Denmark 0.3% 0.3% 0.3% 0.4% 0.4% 0.4% 0.5% 0.6% 0.8% 0.6% 0.8% 0.6%

Finland 0.4% 0.3% 0.4% 0.5% 0.5% 0.5% 0.6% 0.7% 0.7% 1.1% 1.3% 0.8%

France 2.1% 2.3% 2.6% 2.5% 2.4% 2.3% 2.4% 2.4% 2.4% 2.5% 2.3% 1.7%

Germany 0.6% 0.7% 0.8% 0.8% 0.7% 0.8% 0.9% 1.0% 1.3% 1.6% 2.0% 1.6%

Greece na na na na na na na na na 0.2% 0.2% 0.1%

Hungary ns ns ns ns 0.8% 1.0% 1.4% 1.4% 1.4% 1.4% 1.4% 0.6%

Ireland 0.6% 0.6% 1.5% 1.5% 1.4% 1.4% 1.4% 1.3% 1.5% 1.7% 1.7% na

Italy 0.0% 0.1% 0.3% 0.3% 0.4% 0.6% 0.7% 0.7% 0.7% 1.0% 0.9% 0.7%

Luxembourg 1.2% 1.7% 1.9% 2.0% 2.2% 2.3% 2.1% 2.3% 2.4% 2.4% 2.0% na

Netherlands 2.4% 2.5% 2.3% 2.2% 2.1% 1.9% 1.9% 2.2% 2.5% 2.8% 2.9% 2.5%

Norway 0.5% 0.5% 0.5% 0.5% 0.5% 0.4% 0.5% 0.7% 1.0% 1.0% 1.0% 0.8%

Poland ns ns ns ns ns 0.1% 0.2% 0.2% 0.3% 0.4% 0.6% 0.3%

Portugal 0.7% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% na

Romania na na na na na na na na na na 0.3% 0.2%

Slovakia na na na na na na na na na na 0.6% 0.6%

Slovenia na na na na na na na na na na 0.3% 0.3%

Spain 0.8% 0.9% 0.9% 0.8% 0.7% 0.7% 0.7% 0.7% 0.7% 0.8% 0.7% na

Sweden 0.5% 0.6% 1.0% 0.9% 0.9% 0.7% 0.7% 0.7% 0.8% 1.3% 1.3% 1.0%

Switzerland 0.8% 0.9% 1.0% 1.0% 0.9% 0.9% 1.0% 1.2% 1.5% 1.7% 1.7% 1.4%

UK 2.6% 2.8% 3.8% 3.8% 3.8% 4.0% 4.2% 4.3% 4.5% 4.8% 4.1% 3.6%

weighted average 1.1% 1.2% 1.5% 1.5% 1.4% 1.5% 1.6% 1.7% 1.8% 2.0% 1.7% 1.5%

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The European average agency work penetration rate was 1.5% in 2009

The European average agency work penetration rate fell from 1.7% in 2008 to 1.5% in 2009, notably due to the sustained impact of the economic crisis. Nevertheless, this average hides enormous differences from country to country, ranging from 3.6% in the UK to 0.1% in Greece. Mature markets in Western Europe, namely the UK, France, Germany and the Benelux countries, are all above average; whereas the newer markets in Southern and Eastern Europe are all below average, indicating that they still have room to grow.

Agency work penetration rates in Europe in 2009*

* Defined as the number of full-time equivalents - as supplied by Ciett National Federations - divided by the total active working population - as published by the ILO

European average penetration rate : 1.5%

4.0%

3.5%

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%

UK

Net

herla

nds

Fran

ce

Belg

ium

Ger

man

y

Aust

ria

Switz

erla

nd

Swed

en

Port

ugal

Nor

way

Finl

and

Mac

edon

ia

Czec

h Re

publ

ic

Italy

Den

mar

k

Slov

akia

Hun

gary

Pola

nd

Slov

enia

Rom

ania

Gre

ece

3.6%

2.9%

1.7% 1.7% 1.6%1.4% 1.4%

1.0%0.9% 0.8% 0.8% 0.8% 0.7% 0.7% 0.6% 0.6% 0.6%

0.4%0.3% 0.29%

0.1%

Page 25: Ciett economic report_2011

25

AGEnCy worKErS In nUMbErS

Comparison of European, Japanese andAmerican agency work penetration rates

In 2009, the European and American penetration rates fell to 1.4% and 1.3% respectively, reflecting the sustained impact of the economic crisis on these markets, whilst the Japanese penetration also fell 1.7%, although it entered the crisis later than the USA and Europe.

Penetration rate in major markets fell in 2009

Source: Ciett national federations

US

Japan

Europe

2.2%

2.0%

1.5%

1.0%

0.5%

0.0%

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

1.7%

1.0%

1.5% 1.6% 1.6%

1.8%

2.0%

1.7% 1.7%

1.5%

1.3%

1.1%

0.8%

0.5%

1.8%

1.4%

1.9%

2.1%

Page 26: Ciett economic report_2011

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Agency workers work nearly half as many hours on a yearly basis as full-time permanent employees

Agency workers tend to work less during one year than a worker with a full-time, open-ended contract - except for the notable exception of Sweden. From country to country, the average number of hours worked by an agency worker compared to the average number of hours worked by a permanent full-time employee varies greatly, from less than 15% in the Czech Republic to equivalent in Sweden.

Average number of hours worked *

* By an individual during one yearSources : Ciett National Federations, ILO 2009

Sweden

Argentina

Japan

Brazil

Australia

Mexico

Slovakia

Hungary

Greece

Netherlands

Chile

Switzerland

Italy

Norway

Poland

France

Czech Republic

Belgium

0 500 1,000 1,500 2,000

1,6251,627

1,8201,589

1,7721,354

1,6891,320

1,7211,200

1,8931,120

1,7691,021

1,989

2,121

1,389

1,902

1,643

1,802

1,422

1,969

1,542

1,992

1,568

840

730

697

690

465

450

419

382

370

288

251

Average per full-time permanent employee Average per agency worker

Page 27: Ciett economic report_2011

27

AGEnCy worKErS In nUMbErS

In most countries, the average length of assignment of an agency worker exceeds one month, and often even exceeds three, the notable exceptions being Italy [66%] and Poland [63%], where more than half of the assignments are less than one month long. All assignments in South Korea are over one month long, and only 4% of assignments in Sweden last for less than a month.

* The length of an assignment refers to the duration spent executing a specific job in one single company. A contract can be renewed several times, depending on the legal obligations of the country in question, to fulfil one single assignment. If the worker changes function in the same company, or executes the same job in another company, then

the assignment is said to have changed.

Most agency work assignments are more than one month long

Average length of agency work assignments *

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

South Korea

Sweden

Germany

Chile

Peru

Japan

South Africa

Macedonia

Greece

Austria

Australia

Brazil

Argentina

Netherlands

Czech Republic

Switzerland

USA

Mexico

Belgium

France

Poland

Italy

72%24%

66%34%

4%

7%

9%

10%

12%

16%

17%

29%

39%

27%

23%

23%

38%

64%

52%

63%

65%

61%

45%

18%

19%

24%

25%

39%

17%

31%

45%

43%

64%

45%

30%

25%

27%

27%

32%

34%

37%

45%

66%

63%

30%

35%

30%

38%

18%

12%

19%

25%

23%

30%

40%

43%

35%

50%

54%

44%

30%

12%

37%

40%

Short-term [< 1 month] Medium-term [1 – 3 months] Long-term [3 months]

Page 28: Ciett economic report_2011

28

3. The profile of agency workers

28

• Differences in gender balance depend on the socio-economic fabric of a country.

• Three in five agency workers are aged less than 30.

• nearly three in four agency workers have at best finished their secondary education.

• Agency work is mostly used in the manufacturing and services sectors.

• The motive to work via an agency is usually to gain work experience.

• A significant proportion of agency workers do not seek a permanent employment.

• Most agency workers are satisfied with their job.

Page 29: Ciett economic report_2011

2929

a. General trends

Page 30: Ciett economic report_2011

30

Differences in gender balance depend on the socio-economic fabric of a country

From country to country, differences in gender balance in agency work are determined by the particular socio-economic fabric and economic history of each country, as well as by the sectors allowed to use agency work. More services-oriented markets tend to employ more women, such as Sweden [60% of women and 57% in the services sector], whereas markets with a strong industrial fibre usually employ more men, such as Germany [70% of men and 48% in the manufacturing sector].

Agency workers’ gender balance

AustraliaJapan

FinlandDenmark

ChinaSweden

ColombiaUK

GreeceUSA

BrazilCzech Republic

PolandChile

NorwayRomania

ItalySouth AfricaNetherlands

MexicoHungarySloveniaSlovakiaBelgium

MacedoniaGermany

FranceSwitzerland

Austria

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

34%34%

39%40%40%

42%42%

44%44%

46%48%48%49%

51%52%52%52%53%54%54%

56%57%58%

66%70%71%

75%

66%66%

61%60%60%

58%58%

56%56%

54%52%52%51%

49%49%48%48%47%46%46%

44%43%42%

34%30%29%

25%80% 20%

30% 70%

Male Female

Page 31: Ciett economic report_2011

ThE ProFIlE oF AGEnCy worKErS

31

Age distribution of agency workersOver-represented in the agency work sector, when compared to the total active working population, most agency workers are aged below 30. Agency work often serves as a first professional experience for first-time entrants into the labour market, providing them with a valuable initial experience or serving as a stepping-stone to permanent employment. The three notable exceptions to this trend are the USA [68% over 30], Germany [60% over 30], and Macedonia [69% over 30]. This can be explained by the fact that in some of these countries agency work is culturally accepted as a viable alternative to permanent employment.

Most agency workers are aged below 30 ThE ProFIlE

oF AGEnCy worKErS

China

Macedonia

France

USA

Sweden

Romania

Italy

Slovakia

Slovenia

Germany

Colombia

Greece

Czech Republic

Japan

Chile

Uruguay

Switzerland

Mexico

Belgium

South Africa

Netherlands

Poland

Brazil

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

0% 9%

5%

21%5%

29%6%

27%6%

7% 24%

20%7%

17%7%

21%8%

31%8%

28%8%

37%8.3%

28%9%

25%10%

30%10%

33%10%

27%10%

40%11%

15%

33%17%

25%

22%

13%

26%

23%

25%

30%

34%

16%

34%

34%

21%

26.9%

24%

40%

15%

26%

19%

32%

26%

20%

45%

16%

31%

33%

34%

24%

34%

38%

30%

21%

25%

13%

27%

20%

30%

23%

32%

39%

15% 26%

18%

30%

24%

32%36%

17%

8%

8%

12%

6%

22%

12%

6%

18%

14,8%

12%

5%

15%

8%

12%

6% 4%

13%

7%

10%15%

30% 30% 30% 10%

26%3% 21% 34% 16%

< 21 21 - 25 26 - 30 31 - 45 > 45

Page 32: Ciett economic report_2011

32

Most agency workers have only school-leaving qualification

In most countries, the majority of agency workers have a low to medium initial education level. On average, 51% of agency workers worldwide have finished secondary school, and 23% have not. Spain [56%] and the Czech Republic [70%] are the only countries where a majority of agency workers have not completed their secondary education. Agency work can play an important role in helping these low-skilled workers enter the labour market and gain valuable experience.

Initial education level of agency workers

* figures for 2008

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Japa

n

Nor

way

Chile

Gre

ece

Finl

and

Aust

ralia

Port

ugal

*

Sout

h Af

rica

Swed

en

Uru

guay

Switz

erla

nd

Bulg

aria

USA

Belg

ium

Net

herla

nds

Luxe

mbo

urg* UK

Braz

il

Hun

gary

Spai

n*

Czec

h Re

publ

ic

Low [not completed secondary education] Medium [completed secondary education] High [completed higher education]

49%

14%

31% 27%

50%

20%

5%

40%

15%10%

49%

32% 31%

19%25%

39%

11%5% 5% 5%

52% 48%

80%

63%58%

40%

70%

85%

50%

75%

66%

25%

42% 42%

53% 40%

25%

52%

51%

39%

25%

2% 3% 6% 6%9% 10% 10% 10% 10% 10%

24% 26% 26% 27% 28%35% 36% 37%

44%

56%

70%

46%

Page 33: Ciett economic report_2011

ThE ProFIlE oF AGEnCy worKErS

33

Sectoral distribution of agency work use in Europe Reflecting the ongoing mutations of the European economies, the sectoral distribution of agency work in Europe has seen a recent trend away from usage in the industrial sector [30% average], towards a growing use in the services sector [45% average]. Manufacturing remains an important user of agency work in traditionally industrial economies, such as Poland [70%] and Hungary [61%]. Czech Republic [12%] and the Netherlands [10%] make important use of agency work in public administration, as do Luxembourg [27%] and France [23%] in the construction sector. Hungary is the only country to make significant use of agency work in the agricultural sector [12%].

Sectoral distribution of agency work in Europe

* figures for 2008

ThE ProFIlE oF AGEnCy worKErS

High [completed higher education] Manufacturing Services Construction Public Administration Agriculture Other

Nor

way

Gre

ece

Bulg

aria

*

Luxe

mbo

urg*

Den

mar

k*

Port

ugal

*

Net

herla

nds

Swed

en

Spai

n*

Switz

erla

nd

Belg

ium

Fran

ce

Italy

Ger

man

y

Czec

h Re

publ

ic

Hun

gary

*

Pola

nd

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

9%

23%

0%

9% 9%

21%

18%

27%

1%

48%

20% 40%

8%

20%23%

3%3%

8%

12%

10%12%

9%

1%4% 4% 1% 1%

2%

2%12%

1% 1% 4%

14%

2%2%

0%2%

64%

39%

7%

15%

3%

10%

2%

1%

25%

40% 25%

57%40%

37%

49%30%

22% 6%

25%

5%

62%

67%

90%

9% 11% 12% 15%21%

29%35%

39% 41%46%

52%

61%70%

33%

10% 10%

2%3%

3%

53%

38%

2%2%

Page 34: Ciett economic report_2011

34

Sectoral distribution outside Europe

Peru [10%] makes important use of agency work in the public sector. Construction is an important user of agency work in South Africa [17%]. More than three in four Chilean agency workers work in the services sector, and 42% of South Korean agency workers work in the manufacturing sector.

Sectoral distribution of agency work outside Europe

Chile Brazil South Africa Peru Japan Mexico Colombia South Korea

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

9% 16%15%

8%16%

13%

3%

2%4%

17%10%

7%

0%

4%3%0%

3%

4%

22%

3%

10%

23% 25% 27%33%

42%

78%

38%43%

57%

22%

43%

1%4%1%

12%

38%

44%

Manufacturing Services Construction Public Administration Agriculture Other

15%

55%

16%

10%

2%2%

Page 35: Ciett economic report_2011

ThE ProFIlE oF AGEnCy worKErS

35

b. Agency workers’ motives and satisfaction

Page 36: Ciett economic report_2011

36

Outside Europe the motive to work via an agency is usually to find a permanent job or work flexibly

The main motives to work as an agency worker are generally work and career-related. It is often to find a permanent position [59% in the USA], but can also be to gain additional income [68% in Brazil]. Gaining access to training is an important reason to work as an agency worker in Brazil [41%] and the USA [40%], but not so in South Africa [10%] or Japan [3%]. For those seeking to balance personal and professional life, the inherent flexibility that agency work offers is cited as an important motive in Japan [45%] and the USA [41%], two countries with a firmly established agency work industry.

Reasons to work as an agency worker outside EuropeJapan50%

40%

30%

20%

10%

0%

-

-

-

-

-

-

45%

39%

29%

19%14%

11%

3%

70%

60%

50%

40%

30%

20%

10%

0%

59%

41% 40% 40%32%

25%19%

Find

pe

rman

ent j

ob

Wor

k in

a

flexi

ble

way

Gai

n w

ork

expe

rienc

e

Gai

n ac

cess

to

trai

ning

Had

no

othe

r cho

ice

Gai

n ad

ditio

nal

inco

mes Get

in

form

atio

n

South Africa

Brazil

70%

60%

50%

40%

30%

20%

10%

0%

Find

pe

rman

ent j

ob

Wor

k in

a

flexi

ble

way

Gai

n w

ork

expe

rienc

e

Gai

n ac

cess

to

trai

ning

65%

10% 10% 10%

70%

60%

50%

40%

30%

20%

10%

0%

68%

52%

42% 41% 39%32%

18%

Gai

n ad

ditio

nal

inco

mes

Gai

n w

ork

expe

rienc

e

Get

info

rmat

ion

Gai

n ac

cess

to

trai

ning

Find

pe

rman

ent j

ob

Had

no

othe

r cho

ice

Wor

k in

a

flexi

ble

way

Wor

k in

a

flexi

ble

way

Had

no

othe

r cho

ice

Get

in

form

atio

n

Gai

n w

ork

expe

rienc

e

Find

pe

rman

ent j

ob

Gai

n ad

ditio

nal

inco

mes

Gai

n ac

cess

to tr

aini

ng

USA

Page 37: Ciett economic report_2011

ThE ProFIlE oF AGEnCy worKErS

In most European countries the main motive is - as outside Europe - to find a permanent position [28% in the Netherlands] or to gain work experience [30% in Finland]. Other non-work or career-related motives exist to engage in agency work, often to obtain additional incomes [38% in Finland], but also to achieve a better work-life balance by working in a flexible way [28% in the Netherlands].

In Europe the main motive to work via an agency is also to find a permanent job or gain work experience

37

Reasons to work as an agency worker in Europe

ThE ProFIlE oF AGEnCy worKErS

Netherlands Czech Republic

France

30%

25%

20%

15%

10%

5%

0%

28%

18%

6%

1%

Find

pe

rman

ent j

ob

Wor

k in

a fl

exib

le w

ay

Gai

n w

ork

expe

rienc

e

Gai

n ac

cess

to

trai

ning

40%

22%

15%9%

5% 3% 2%

40%

30%

20%

10%

0%

It su

its

curr

ent n

eeds

way

of l

ife

Had

no

othe

r cho

ice

To g

ain

expe

rienc

e

Acce

ss

to tr

aini

ng

To g

et

perm

anen

t con

trac

t

Beca

use

of m

y ag

e

35%

30%

25%

20%

15%

10%

5%

0%

32%

16%

12% 12%9% 8%

3%

Find

pe

rman

ent j

ob

Had

no

othe

r cho

ice

Gai

n w

ork

expe

rienc

e

Gai

n ad

ditio

nal

inco

mes

Get

info

rmat

ion

Wor

k in

a

flexi

ble

way

Gai

n ac

cess

to

trai

ning

Finland60%

50%

40%

30%

20%

10%

0%

48% 47%

38%

30%

Agen

cy w

ork t

he

easie

st w

ay to

get

a jo

b

Wor

k in

a

flexi

ble

way

Gai

n ad

ditio

nal

inco

mes

Gai

n w

ork

expe

rienc

e

Page 38: Ciett economic report_2011

38

However a significant proportion of agency workers do not seek a permanent employment

In several countries, a considerable number of agency workers do not seek a permanent position, notably in Japan with 58%, the Netherlands with 44% and Australia with 35%. Whether it is to find the right balance between private and professional life, or to obtain additional income or access to training, agency work is seen as a practical answer to match different aspirations to flexibility.

Percentage of agency workers not looking for a permanent job

60%

50%

40%

30%

20%

10%

0%Japan Netherlands Australia Switzerland Brazil USA Norway Finland

58%

44%

35%

30%

25%23%

20%

14%

Page 39: Ciett economic report_2011

39

ThE ProFIlE oF AGEnCy worKErS

Benefits of working as an agency worker in France

However a significant proportion of agency workers do not seek a permanent employment

In France, the most cited benefits of working as an agency worker are the “capacity to adapt” [87%] and the relations held with colleagues [87%]. Most French agency workers are convinced that agency work allows them to acquire new skills [72%] and the professional experience [85%] they need to improve their employability, thereby ultimately providing them with more work opportunities.

In France agency work is seen as enhancing employability

Source: OME study: Regards croisés sur l’intérim 2010

Capacity to adapt

Relations with colleagues

Professional experience

Teamwork experience

Autonomy

Knowledge of firm

Sense of responsibility

Acquisition of new skills

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

87%

87%

85%

85%

84%

82%

79%

72%

Page 40: Ciett economic report_2011

40

In the USA agency work is recognised as an effective means of searching for a job

In the USA, the most cited benefit of working as an agency worker is “career advice or coaching” [20%]. This illustrates the key role that agencies play in the triangular work relationship, acting as a mentor for the agency worker. The next most mentioned positive attributes are the “availability of jobs” [17%] and the fact that it is “easier for [the] job applicant” [14%].

Benefits of using agency work in the USA

Source: American Staffing Association 2008

Career advice or coaching

Availability of jobs

Easier for job applicant

Access to higher-quality jobs

Shorter length of job search

Flexibility in job opportunities

Immediate compensation

Personal touch and guidance

Prescreening of opportunities

Qualified job leads

20%

17%

14%

13%

11%

9%

7%

5%

4%

1%

0% 5% 10% 15% 20%

Page 41: Ciett economic report_2011

41

ThE ProFIlE oF AGEnCy worKErS

Agrees with the statement: “Agency work provides a better work life balance” *In a poll of the general public taken in seven European countries, the UK is seen to believe most firmly that agency work offers a better balance between work and private life [66%], followed by Poland [60%], and the Netherlands [58%]

Agency work is seen as offering the right balance between work and private life

*5373 people were polled in Belgium, France, Germany, Italy, Netherlands, Poland, Spain and the UK. Data was weighted demographically according to age, sex and occupational status.Source: OME study :Regards croisés sur l’intérim 2010

66%

60%58%

52%

46%

38%

35% 35%

70%

60%

50%

40%

30%

20%

10%

0%United

KingdomPoland Netherlands Belgium France Italy Germany Spain

Page 42: Ciett economic report_2011

42

Agency work is accepted as a desirable form of work

83% of the UK general public would recommend agency work to family or friends according to a recent survey. This positive trend is displayed throughout the surveyed countries with Poland [76%], Belgium [74%], and France [69%] all willing to recommend agency work to people they know.

Agrees with the statement: “Would you recommend agency work to family or friends?” *

*5373 people were polled in Belgium, France, Germany, Italy, Netherlands, Poland, Spain and the UK. Data was weighted demographically according to age, sex and occupational status.

Source: OME study: Regards croisés sur l’intérim 2010

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

83%

76%74%

69%

62%

55%

49%

42%

United Kingdom

Poland Belgium France Netherlands Italy Spain Germany

Page 43: Ciett economic report_2011

43

ThE ProFIlE oF AGEnCy worKErS

Satisfaction of agency workers in the UKMore than four in five agency workers in the UK reported that they were “very” or “fairly” satisfied with working via an agency, and less than one in eight said they were “fairly” or “very” dissatisfied with it. This counters the popular misconception that agency workers are generally dissatisfied with the work they find through an agency, and explains the important proportion of agency workers who wish to continue to work in a flexible way.

Most agency workers in the UK are satisfied with their job

Source: REC & BERR Study 2008

Verydissatisfied

3%

Verysatisfied

40%Fairly satisfied

41%

Neither7%

Fairlydissatisfied

9%

Page 44: Ciett economic report_2011

44

In the Netherlands most agency workers are satisfied with the quality of their work

72% of agency workers in the Netherlands reported that they were “satisfied” or “very satisfied” with the content of their work, and 64% with the variation. The wages were judged “satisfying” or “very satisfying” by 61%, as were the number of working days by 80%. This partially explains why 44% of agency workers in the Netherlands do not seek a permanent position, and prefer to work as temporary agency workers.

Satisfaction of agency workers in the Netherlands

Source: ABU/ECORYS 2009

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Number of working hours per week

Content of work Variation in work Wage

3% 5% 5%

11%

23%

49%

12%

11%

20%

46%

18%

3%

7%

18%

52%

20%

6%

12%

59%

21%

Very satisfied Satisfied Neutral Dissatisfied Very dissatisfied

Page 45: Ciett economic report_2011

ThE ProFIlE oF AGEnCy worKErS

45

Satisfaction of agency workers in France87% of agency workers in France reported that they were “satisfied” or “very satisfied” with the relationship they had with their employment agency. 91% were happy with the content of their work. The wages were judged “satisfying” or “very satisfying” by 75%, as the balance between professional and private life [81%].

In France agency workers have a good relationship with their employment agency

Source: OME study :Regards croisés sur l’intérim 2010

ThE ProFIlE oF AGEnCy worKErS

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%Relationship with

employment agency Balance between

professional and private lifeContent of work Delay between

placementsWages

4% 4% 4%7%

13%

48%

29%23%

53%

13%

10%5%

61%

30%

9%

55%

31%

8%

44%

43%

Very satisfied Satisfied Dissatisfied Very dissatisfied

Page 46: Ciett economic report_2011

46

4. Agency work’s contribution to a better functioning labour market

• Agency work facilitates transitions in the labour market.

• Agency work contributes to reducing unemployment especially by serving as a stepping-stone into the labour market.

• More people are employed after working as an agency worker than before.

• The higher the agency work penetration rate, the lower the level of undeclared work.

• Vulnerable target groups use agency work as a means of entering the labour market.

Page 47: Ciett economic report_2011

47

a. Transitions

Page 48: Ciett economic report_2011

48

Agency work facilitates transitions in the labour market

Agency work broadens the range of work solutions available to workers to meet their lifestyle choices or personal constraints at every step of their professional lives. Intrinsically flexible, agency work can serve as a stop-gap economic measure, a means of enhancing employability, or improving work-life balance.

“Factors helping to drive the growth in TAW include its active use to facilitate the re-engagement of long-term unemployed into work, and a growth in the labour force participation of people that need or prefer temporary work.” *

* Source: Eurofound - Temporary Agency Work and Collective Bargaining in the EU | 2009

Transitions in the labour market

1st time entrant

Experiencedworker

laid-offworker PensionerStudent

• Financeeducationwhilststudying

• Providetemporaryassignmentsleading to apermanentcontract

• Gain a firstprofessionalexperience

• Provide newopportunities to evolve andimprove lifeconditions

• Provide a flexible working solution to meet familial responsibilities

• Facilitatetransitionsfrom one job to another through outplacement services

• Provide extrafinancial revenues

• Improvework-lifebalance

Page 49: Ciett economic report_2011

49

AGEnCy worK’S ConTrIbUTIon To A bETTEr FUnCTIonInG lAboUr MArKET

Agency work penetration rate and unemployment ratesBy serving as labour market intermediaries, and improving the matching of workers with jobs, PrEAs contribute to reducing unemployment - both frictional and long-term - and help people enter, and re-enter, the labour market.

Frictional unemployment By rapidly placing agency workers on assignments, PrEAs reduce the frictional rate of unemployment - i.e. the period of inactivity between jobs - allowing people to remain active, thereby enhancing their skills and experience, and helping them to quickly find a new job.Long-term unemployment Working via an agency allows the long-term unemployed to regain self-confidence, acquire new skills, and demonstrate their capacities to potential employers.

Agency work contributes to reducing unemployment

Source : Ciett National Federations, IMF 2010

USA

JP

UK

FR

2.0%1.8%1.6%1.4%1.2%1.0%0.8%0.6%0.4%0.2%0.0%

97 98 99 00 01 02 03 04 05 06 07 08 09

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%97 98 99 00 01 02 03 04 05 06 07 08 09

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%

97 98 99 00 01 02 03 04 05 06 07 08 09

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%97 98 99 00 01 02 03 04 05 06 07 08 09

AW penetration Rate Unemployment Rate

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50

b. Job creation

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51

AGEnCy worK’S ConTrIbUTIon To A bETTEr FUnCTIonInG lAboUr MArKET

Less people are unemployed after working as an agency worker than before

Many agency workers are officially registered as “unemployed” before working with an agency [37% average]. This proportion falls to less than half that level after working as an agency worker [15% average]. Economists Lawrence Katz of Harvard University and Alan Krueger of Princeton University assert that the agency work industry was responsible for up to 40% of the drastic reduction in unemployment witnessed in the USA in the 1990s. This illustrates the double effect of agency work’s stepping-stone function: first, from unemployment to work, and second, from a temporary contract to a permanent one.

Unemployed before & after agency work

* % of agency workers that are officially registered as unemployed before and 12 months after temping

South Africa Germany Norway France GreeceCzech

RepublicSwitzerland Sweden Brazil Netherlands

70%

60%

50%

40%

30%

20%

10%

0%

before

after

65%

17%

56%

17%

46%

10%

43%

25%

34%

6%

31%

18%

30%

20%

30%

9%

19%

15%

12%8%

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52

Employed before & after agency workOn average, the proportion of those in employment before [29%] and after [59%] having worked as an agency worker is more than doubled. This supports the argument that agency work serves as a stepping-stone, especially for first-time entrants to the labour market, enhancing worker employability, by proposing job assignments and vocational training.

More people are employed after working as an agency worker than before

Switzerland Belgium Luxembourg Germany Czech Republic Norway Portugal France

* % of agency workers that are employed (either with a temp, fixed-term or open-ended contracts) before and 12 months after temping

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

before

after

45%

60%

44%

77%

43%

69%

33%

48%

20%

80%

18%

71%

6%

74%

36%

56%

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AGEnCy worK’S ConTrIbUTIon To A bETTEr FUnCTIonInG lAboUr MArKET

Agency work is an effective way to land a first job

According to a poll carried out among 5373 European citizens, the overwhelming majority of people believe that agency work is a good way to enter the job market for the first time. The United Kingdom and Belgium hold this view most strongly with 93% and 86% respectively agreeing that temporary agency work is an effective means of getting a first job. Even in Germany, the most sceptical country, 59% believe temporary agency work to be effective.

Agrees with the statement: “Agency work is an effective way to land a first job” *

*5373 people were polled in Belgium, France, Germany, Italy, Netherlands, Poland, Spain and the UK. Data was weighted demographically according to age, sex and occupational status.Source: OME study :Regards croisés sur l’intérim 2010

United Kingdom Belgium Poland France Spain Netherlands Italy Germany

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

92%

86% 85% 84% 82%80%

71%

59%

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54

Agrees with the statement: “Agency work is an effective way of finding a permanent contract” *Temporary agency work helps people find permanent work. A study carried shows that across Europe there is acceptance of the fact that temporary employment agencies are the best way of securing permanent work. In the United Kingdom 90% agreed, in the Netherlands [78%] and Poland [77%]

Agency work is an effective way of finding permanent work.

*5373 people were polled in Belgium, France, Germany, Italy, Netherlands, Poland, Spain and the UK. Data was weighted demographically according to age, sex and occupational status.Source: OME study :Regards croisés sur l’intérim 2010

United Kingdom Netherlands Poland Belgium France Spain Germany Italy

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

90%

78% 77%

69%

61%

52%

43%40%

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AGEnCy worK’S ConTrIbUTIon To A bETTEr FUnCTIonInG lAboUr MArKET

Temporary work agencies are the best channel to find permanent work

A Study from the Netherlands shows that temporary agency work is the most effective means of making the transition from temporary work into a permanent contract. 29% of those surveyed used temporary employment agencies for this purpose compared with adverts in newspapers and magazines [14%] and unsolicited applications [14%]

How do temporary employees find permanent work in the Netherlands?

Source: ABU/ECORYS 2009

Temporary work agencies

Advertisements in newspapers and magazines

unsolicited job applications

via friends, family, acquaintances, colleagues

Internet

recruitment and selection agency

centre for work and Income

secondment agency

via school, education/training programme, internship

Job/career fair

re-integration company

Other

29%

14%

14%

14%

8%

4%

2%

2%

2%

1%

0%

10%

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56

Temp-to-hire conversion rate in the USA*The median temp-to-hire conversion rate in the USA is 20%. This confirms agency work’s acknowledged stepping-stone function, whereby it facilitates transitions from a temporary contract to a permanent one. However, conversion rates can vary widely according to the segment. Commercial agency work has a much higher temp-to-hire conversion rate than professional agency work. The companies that report the highest median rate of conversion - 40% - derive most of their revenue from the office/clerical segment. At the other end of the spectrum, companies that derive a majority of their revenue from the health sector report a median temp-to-hire conversion rate of 10%.

Temp-to-hire conversion rates in the USA vary according to the segment

* % of agency workers in the USA that get an open-ended contract after tempingSource: Staffing Industry Analysts 2008 - www.staffingindustry.com

Office / Clerical Industrial IT Finance / Acc Tech / Eng Healthcare

40%

35%

30%

25%

20%

15%

10%

5%

0%

40%

30%

20% 20% 20%

10%

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AGEnCy worK’S ConTrIbUTIon To A bETTEr FUnCTIonInG lAboUr MArKET

The higher the agency work penetration rate, the lower the level of undeclared work

There appears to be an inverse correlation between penetration rate of agency work and level of undeclared work. By serving as a legal alternative in sectors often plagued by illegal labour, agency work can bring to the labour market thousands previously illegally employed, and hence serve as a means of fighting undeclared work. Working via an agency allows workers to take full advantage of all the legal protection and enforcement mechanisms available, unlike the often insecure and potentially risky work available through illegal channels.

Agency work penetration rates and undeclared work as a percentage of GDP

Sources: EuroStat, Ciett National Federations, Bain analysis

UK

NL

FR DE

BE

SE

FI IT

GR

4.0%

3.5%

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%

0% 5% 10% 15% 20% 25% 30% 35%

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58

Agency work and undeclared work rates in ItalyIt was only in 1997, with the “Treu package”, that agency work was legally recognised in Italy. Since then, additional regulatory changes were introduced to further liberalise the Italian agency work industry: in 2000, with the opening up of the agricultural, construction and public sectors, and in 2003, with the “Biagi law”. In 2005, a study conducted by the Italian National Institute of Statistics demonstrated that agency work played a key role in the reduction of undeclared work.

In Italy the lifting of restrictions on agency work helped curb undeclared work

Source: Confinterim.it, EuroStat, Instuto Nazionale di Statistica, LitSearch

Undeclared work rate AW penetration rate

Lifting of sectoral bansLifting of furtherrestrictions to AW

Legal recognitionof AW

15.0%

14.5%

14.0%

13.5%

13.0%

12.5%

12.0%

11.5%1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

1.0%

0.9%

0.8%

0.7%

0.6%

0.5%

0.4%

0.3%

0.2%

0.1%

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AGEnCy worK’S ConTrIbUTIon To A bETTEr FUnCTIonInG lAboUr MArKET

Agency work facilitates quality transitions through skills upgrading

In many EU countries, the agency work industry has developed specific training schemes to facilitate access to vocational training for agency workers. In seven EU countries - Austria, Belgium, France, Italy, Luxembourg, Spain, and the Netherlands - sectoral bi-partite training funds have been set up. Countries with more long-term training programmes tend to train less temporary agency workers than countries with short-term training programmes. This reflects the fact that the agency work industry establishes training schemes to suit the specific needs of the labour market. It is also generally the agency that takes the initiative to train a worker.

1 - Maximum contribution rate 2 - Minimum contribution rate as determined by collective labour agreementSource : IDEA Consult 2008

Training programmes provided to agency workers

FR BE NL ES IT

Number of trained agency workers [x 1.000] 270,0 19,6 138,7 10,9 204,2

% of trained agency workers 12,3% 3,6% 19,0% 1,4% 35,6%

Number of training hours [x 1.000] 10.110 303 760 1.221

Number of training hours per trained agency worker 47,4 15,4 69,8 6,0

Amount invested in training by temporary work agencies [x 1.000.000] 331 4,7 35 4,8 149

Amount invested per trained agency worker (€) 1.225,9 239,7 252,3 440,4 729,6

Amount invested in training in % of wages 2,15% 1 0,50% 2 1,02% 1,25%

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c. Inclusion & diversity

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AGEnCy worK’S ConTrIbUTIon To A bETTEr FUnCTIonInG lAboUr MArKET

The number of agency workers over 50 is increasing in Italy

Workers over 50 are under-represented in the Italian agency work population. However, their numbers are continually on the rise. In 2004, 2006 and 2008, the proportion of agency workers aged over 50 has steadily increased from 3% to 4% to 5%.

“Agency work offers groups such as migrant workers, women returning from childcare breaks, disabled and unemployed people across to the labour market. In principle, agency work can help workers develop their skills and experience, thereby offering pathways into more secure employment.” *

* Source: Eurofound - Temporary Agency Work and Collective Bargaining in the EU | 2009

Age distribution of agency workers in Italy in 2004, 2006 & 2008

Source : Ebitemp 2009

2004

2006

2008

<24 25 - 29 30 - 34 35 - 39 40 - 49 >50

30%

25%

20%

15%

10%

5%

0%

28%27% 27% 27%

23%22%

19%19%

18%

12%13% 13%

11%

14%

16%

3%4%

5%

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62

Percentage of agency workers aged 50 & over in FranceIn France, the number of agency workers aged over 50 increases every year, and has more than doubled between 1996 [4.1%] and 2009 [8.6%]. This trend mirrors both the ongoing demographic crunch, with an ever ageing population, and the desire of older workers to remain active. The agency work industry helps these older workers to remain in the labour market, providing them with more flexible opportunities to meet their expectations.

In France the proportion of older agency workers keeps on increasing

Source : Dares 2010

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

9.0%

8.0%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

4.1%4.3% 4.4%

4.9%

5.3%

5.7% 5.8%6.1%

6.4%6.7%

6.9%

7.5%

8.0%

8.6%

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63

AGEnCy worK’S ConTrIbUTIon To A bETTEr FUnCTIonInG lAboUr MArKET

Agency workers from target groups are on the rise in the Netherlands

Agency work gives “outsiders” a viable access to the labour market, thereby increasing labour market participation and diversity. Ethnic minorities, older people, labour incapacitated and the long term unemployed accounted for 31% of agency workers in the Netherlands in 2008. This is up from 27% in 2006. Agency work increases labour market flexibility, whilst providing basic rights and working conditions to agency workers. Because the agency remains the worker’s employer, his rights are capitalised from one assignment to the next. Agency work thus integrates “outsiders” in the labour market, who then benefit from the same working conditions as those provided to other agency workers.

The percentage of special target groups among temporary employees in the Netherlands

Source: ABU/ECORYS 2009

2006

2008

14%

18%

12%13%

2% 1%

3%2%

27%

31%

Ethnic minorities Older workers (45+) Labour incapacitated Long-termunemployed

Total (corrected foroverlap)

35%

30%

25%

20%

15%

10%

5%

0%

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AGEnCy worK’S ConTrIbUTIon To A bETTEr FUnCTIonInG lAboUr MArKET

Employment of disabled agency workers in FranceIn France, 43% of disabled workers are classified as skilled blue collar workers, while 7% occupy middle management positions. 16% are white collar employees and 34% are unskilled blue collar workers. Through private employment agencies, disabled agency workers are integrated at every level of companies.

Disabled temporary agency workers take on a range of positions

Source : Prisme 2010

64

Whitecollar16%

Unskilled bluecollar 34%

Skilledblue collar

43%Middle

management7%

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65

5. Companies’ rationale to use temporary agency work

• Agency work improves companies’ competitiveness.

• Agency work is not a substitute for permanent employment.

• Companies use agency work to meet peaks in demand or to fill in for absent employees.

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66

Agency work improves companies’ competitiveness

To remain competitive, organisations must improve their response to output fluctuations, by adapting their workforce and skills to changes in a competitive environment, and focusing on their core business. The range of services proposed by private employment agencies answers these challenges.

“TAW enables user firms to make relatively easy labour adjustments and cost savings by outsourcing some responsibility for recruitment and administration.” *

Source: Eurofound - Temporary Agency Work and Collective Bargaining in the EU | 2009

The use of agency work helps companies to improve competitiveness

Virtuous circle ofcompany andemployment

growth

Sustainability ofpermanent jobs

Close adaptationto activity fluctuation

AW use

Productivitygains

Competitivenessimprovement

Better resistance

to economic cycles

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67

CoMPAnIES’ rATIonAlE To USE TEMPorAry AGEnCy worK

Companies employing temporary agency workers in 2009 (%)Across the EU, agency work is used by companies to remain competitive. In Belgium 57% of companies used temporary agency work at some point in 2009. The figure was also high in Denmark [49%], France [35%] and the UK [35%]. The figure is highest in countries with the most developed labour polices and lowest in countries which still need to enact labour market reforms.

21% of European companies make use of temporary agency workers

Source: Eurofund - European Company Survey 2009

BE DK FR UK FI LU NL IT

EU27 SE D

E ES IE

MK AT SI BG PT CY MT

HU LV CZ EL RO LT EE SK HR TR PL

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0%

57%

49%

35% 35%34%

29%28%

24% 23% 22% 22% 21% 21%

17% 17% 16%15%

12%9%

8% 8% 8% 7%6% 5% 5%

4%5%3%

5%2%

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68

Agency work is not a substitute for permanent employment

Research has shown that 80% of jobs created by agency work would not have existed if agency work were not an option. This confirms that agency work is not a substitute for permanent employment, notably because it does not meet the same needs, as it is generally used for specific flexibility requirements that cannot be covered by permanent contracts. The fact that long-term assignments are rare - and the persistently high turnover of agency workers - further supports this assumption. Any limited substitution effect must be assessed in a long-term perspective, as part of companies’ overall HR strategy to integrate a flexible component into their workforce.

Source: Continental Research Corporate, Sept 2005

Job creation in the UK: What is the alternative to the use of agency work?

No job creation instead of agency work

Job creation instead of agency work

Partial job creation instead of agency work

Work not done4%

Does not know4%

Hire permanentworkers

15%

Externalflexibilitysolutions

16%

Internalflexibilitysolutions

61%

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69

CoMPAnIES’ rATIonAlE To USE TEMPorAry AGEnCy worK

By using agency workers, companies aim to minimise their exposure to risk when the near future seems uncertain. Once the outlook brightens, agency work helps companies to cope with sudden increases in demand or to face seasonal fluctuations. The use of agency workers is also an effective means of finding the right employee, whether to fill a permanent position, or to replace a worker leaving.

In the USA the main reason to use agency workers is to fill in for absent employees or temporary vacancies

Source: American Staffing Association 2009

Main reason to hire agency workers in the USA

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

80%Fill in for absent employees or temporary vacancies

Provide extra support during busy times or seasons

Staff special short-term projects

Help find good permanent employees

72%

68%

59%

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70

In the UK the main reason to use agency workers is to meet peaks in demand

Three in five employers say that they use agency workers to fill a temporary position “always” or “most of the time”. The other most frequently used methods to cover for temporary vacancies are resorting to casual staff, followed by fixed term contract workers and increased over-time. The overall flexibility provided by agency work is a key argument for the services sector, whereas the manufacturing sector uses it to evaluate staff for permanent recruitment, or merely to help keep running costs down.

Source: REC / BERR Study 2008

How important would you say that agency workers are to your organisation in terms of the following ?

1 = not important 5 = very important

Why do employers use temporary agency workers in the UK?

Manufacturing

Services

Meeting peaks in demand/covering busy periods

Overall flexibility

Vetting staff before permanent recruitment

Covering short term staff leave/absences

Helping keep running costs down

Obtaining access to skills you cannot otherwise recruit

Allowing the business to try a new business line orworking patterns without permanent commitment

4.35 3.99

3.353.91

4.273.65

3.53.56

4.142.8

2.662.99

3.21

2.63

0 1 2 3 4 5

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71

CoMPAnIES’ rATIonAlE To USE TEMPorAry AGEnCy worK

As an instrument for employers to adapt the size of their workforce to fluctuations in product demand, agency work is very sensitive to variations in the business cycle. In the Netherlands, companies use agency work for two primary reasons: to absorb peaks in demand and to cover for short-term staff leave. Agency work is considered the most appropriate solution to meet these flexibility-related needs. It is also seen as an alternative for many HR-related functions traditionally carried out internally by companies, thus allowing them to focus on their core activities.

In the Netherlands the main reason to use agency workers is also to meet peaks in demand

Source: ABU 2005

Reasons for hiring agency workers in the Netherlands

Flexibility related

HR related

75%80%

70%

60%

50%

40%

30%

20%

10%

0%

60%58%

43%

Absorb demand peaks Cover short-term staff leave Pre-select potential hires Outsource HR

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72

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73

6. Agency work and the economic recovery

• Agency work is a bellwether of the economic situation.

• As a cyclical business - and a forecasting indicator - agency work has suffered from the economic crisis, but agency workers have been first to be hired when the economy recovers.

• Agency work limits the risk and duration of unemployment.

• The private employment agency industry has rebounded sharply since the recession ended.

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74

Agency work is a bellwether of the economic situation

The use of agency work echoes the behaviour of the general economy. Various studies have confirmed that there is a direct correlation between variations in GDP and the level of use of agency work. In years of growth, the supply and demand of agency workers increase proportionally, and diminish when the economy falters. As a precise indicator of the economic situation, the evolution of the agency work industry is therefore monitored as such, as private employment agencies are the first impacted by the crisis.

Agency work growth* and GDP growth

Sources : Ciett National Federations, IMF 2010*Evolution of turnover

GDP growth AW growth

USA UK

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

-1.0%

-2.0%

-3.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0%

-20.0%

-25.0%

-30.0%

-35.0%

97 98 99 00 01 02 03 04 05 06 07 08 09

5.0%4.0%3.0%2.0%1.0%0.0%

-1.0%-2.0%-3.0%-4.0%-5.0%-6.0%

40.0%

30.0%

20.0%

10.0%

0.0%

-10.0%

-20.0%

97 98 99 00 01 02 03 04 05 06 07 08 09

JP FR

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

-1.0%

-2.0%

-3.0%

40.0%

30.0%

20.0%

10.0%

0.0%

-10.0%

-20.0%

-30.0%

97 98 99 00 01 02 03 04 05 06 07 08 09

4.0%3.0%2.0%1.0%0.0%

-1.0%-2.0%-3.0%-5.0%6.0%

40.0%

30.0%

20.0%

10.0%

0.0%

-10.0%

-20.0%

97 98 99 00 01 02 03 04 05 06 07 08 09

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75

AGEnCy worK AnD ThE EConoMIC rECoVEry

Evolution of number of hours worked by agency workers(year on year)

The crisis affected the different European agency work markets at different times, depending on the openness of their economies, the maturity of their markets, and their dependence on certain segments of the economy. Accordingly, a country like Germany which weathered the crisis better than most, can be seen to have surpassed the previous levels of temporary agency work achieved before the beginning of the crisis. This can be partly attributed to Germany’s relatively low penetration rate. Indeed it highlights that Germany is taking advantage of this latent potential to begin economic growth again.

The agency work industry in Europe returned to growth in 2010

Source: Ciett National Federations 2010* number of remunerated working days - ** total number of temporary agency workers

France

35.0%

25.0%

15.0%

5.0%

-5.0%

-15.0%

-25.0%

-35.0%

-45.0%

-55.0%Jan 08

Feb 08

Mar 08

Apr 08

May 08

Jun 08

Jul 08

Aug 08

Sep 08

Oct 08

Nov 08

Dec 08

Jan 09

Feb 09

Mar 09

Apr 09

May 09

Jun 09

Jul 09

Aug 09

Sep 09

Oct 09

Nov 09

Dec 09

Jan 10

Feb 10

Mar 10

Apr 10

May 10

Jun 10

Jul 10

Aug 10

Sep 10

Oct 10

Belgium Netherlands Spain Italy* Germany**

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76

Number of agency workers in France began to increase again in Feb 2010

The agency work industry in France began to grow again in February 2010, and the number of full time equivalent workers has risen compared with the same period in 2009 since that date. At the end of 2009 unemployment in France had reached 9.8%. The number of agency workers in France fell by 26%, from 604,000 in 2008 to 447,000 in 2009. The agency work penetration rate is now 1.7%, down from 2.2% in 2008.

Evolution in number of agency workers in France *

Source: Prisme 2010* in FTEs / percentage change year on year

Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

-0.5%

4.0%

12.0%

16.0%

18.5%

20.5% 21.0%

14.0%

15.0%

20.0%

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77

AGEnCy worK AnD ThE EConoMIC rECoVEry

Evolution in number of agency workers in Belgium *The agency work industry in Belgium grew by 6.2% [in terms of the number of full time equivalent workers employed] in March 2010 compared to the same period in 2009. This was the first growth in the Belgian agency work industry since it entered the crisis. The growth has continued steadily since that point with most recent figures pointing to a rise of 19.1% in September 2010 compared with September 2009.

Number of agency workers in Belgium have been rising since March 2010

Source: Federgon 2010* in FTEs / percentage change year on year

Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

-2.7%

-1.4%

6.2%

10.7%

16.2%

14.9%

16.6%

12.5%

19.1%19.6%

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78

The Italian agency work industry began growing again in February 2010

The Italian agency work industry began to grow again in April 2010. It noted an increase of 3.6% in the number of remunerated days by agency workers compared with April 2009. Growth has continued steadily since that point. The impact of the crisis on the Italian labour market was relatively mild in 2008 but grew in strength in 2009. The Italian agency work market was also hit later than other European countries. This is partially due to regulatory changes introduced in 2001, 2004 and 2006 that helped liberalise the market, thereby cushioning the initial impact of the crisis on the industry.

Evolution in number of remunerated days by agency workers in Italy

Source: Ebitemp 2010*percentage change year on year

Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10

40.0%

30.0%

20.0%

10.0%

0.0%

-10.0%

-20.0%

-30.0%

-5.4%

3.6%

13.3%

21.5%

25.8% 28.3% 27.2%

-23.0%

-15.1%

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79

AGEnCy worK AnD ThE EConoMIC rECoVEry

Evolution in number of agency workers in the Netherlands *The Agency work industry in the Netherlands returned to growth in period 5 (May) of 2010 with a growth rate of 9% in hours worked compared with the same period in 2009. The Netherlands returned to growth later than other European countries and at a lower rate. It must be noted however that the crisis hit the Netherlands later and the industry suffered less than in other countries (the industry decreased by 13.5% in 2009).

The agency work industry returned to growth later in the Netherlands than in other European countries

Source ABU 2010* in FTEs / percentage change year on year

Wk 1-4 Wk 5-8 Wk 9-12 Wk 13-16 Wk 17-20 Wk 21-24 Wk 25-28 Wk 29-32 Wk 33-36 Wk 37-40 Wk 41-44

15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0%

-8.0%

-13.0%

-6.0%

9.0%

-1.0%

5.0%6.0%

5.0%

8.0%

10.0% 10.0%

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80

The Spanish agency work industry returns to growth strongly, following crisis

In 2010, the Spanish agency work industry began to grow again in February 2010 and continued to do so throughout the year. In 2009, Spain was heavily hit by the global economic crisis. As one of the fastest growing economies in recent years, its impact was all the more significant. Unemployment climbed to over 19% in December 2009.

Evolution in number of agency workers in Spain *

Source: AGETT 2010* in FTEs / percentage change year on year

Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

-0.2%

13.3%

24.7%

12.2%

14.3%

8.7%

7.3%

21.2%

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AGEnCy worK AnD ThE EConoMIC rECoVEry

Evolution in number of agency workers in Germany*Germany’s agency work industry began to grow again as early as January 2010 and in September 2010, the German agency work industry returned to pre-crisis levels of employment. This can be partly attributed to Germany’s relatively young and still immature market in comparison with other major economies.

The number of agency workers in Germany returned to pre-crisis levels in 2010

Source BZA 2010* Total number of workers/ percentage change year on year

Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 sep 10

40.0%

35.0%

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

2.9%

11.0%

23.6%

32.0%

34.6%35.5%

34.2%

38.0%

33.7%

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82

Source: American Staffing Association 2010

The American agency work market began to recover earlier than the industry in Europe

American economic activity measured by employment peaked in December 2007. Since then, it has lost jobs until mid 2009 when it began to grow again. But even though the decline in agency work occurred later, it rapidly outpaced that of the American workforce at large, as it played its role of buffer, cushioning the impact on permanent staff. The strong recovery of the industry points that in the recovery, agency workers are among the first to be hired.

US staffing employment index since 2006

15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0%

-20.0%

120

110

100

90

80

70

60

19/0

6/20

06

19/0

8/20

06

19/1

0/20

06

19/1

2/20

06

19/0

2/20

07

19/0

4/20

07

19/0

6/20

07

19/0

8/20

07

19/1

0/20

07

19/1

2/20

07

19/0

2/20

08

19/0

4/20

08

19/0

6/20

08

19/0

8/20

08

19/1

0/20

08

19/1

2/20

08

19/0

2/20

09

19/0

4/20

09

19/0

6/20

09

19/0

8/20

09

19/1

0/20

09

19/1

2/20

09

19/0

2/20

10

19/0

4/20

10

19/0

6/20

10

19/0

8/20

10

19/1

0/20

10

Week-to-Week Change ASA Staffing Index (Set at 100 on 6/12/2006)

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83

AGEnCy worK AnD ThE EConoMIC rECoVEry

based on a survey of buyers from 171 large [1000+ employee] companies Source: Staffing Industry Analysts 2009 - www.staffingindustry.com

When business recovers, which workers do you typically hire first ?The agency work industry can quickly call upon a large pool of workers, and provide organisations with appropriate workers to better manage competitive pressures. As a result, the agency work industry is among the first to create jobs as soon as the economy recovers, as companies first hire agency workers to meet an increase in orders, before recruiting permanent staff when the situation stabilises. As Pat McFadden - Former UK Minister of State for Employment Relations - said: “Agency work is a valued route into employment and plays a vital role in enabling employers to respond flexibly to changing business needs - and are likely to be particularly important in enabling employers and employees to take full advantage of the upturn.”

Agency workers are the first hired when business recovers

Don’tdistinguish

26%

Contingentworkers

50%

Permanentworkers

23%

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84

AGEnCy worK AnD ThE EConoMIC rECoVEry

Source: American Staffing Association 2009

Agency work typically rebounds sharply after recessions

The agency work industry not only creates jobs that would not otherwise exist, but it also accelerates the number of jobs created once the economy recovers. Historically, PrEAs are among the first to create jobs in economic upswings, enjoying double-digit growth rates when the economy emerges from a recession. As business picks up, companies first hire temporary help, before recruiting permanent staff once business has stabilised. Since 1990, the growth rate of agency work sales revenues in the USA has exceeded GDP growth by more than 2.5 times.

US staffing typically rebounds sharply after recessions

Temporary Help ADE Real GDP % Change

35.0%

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0%

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1998

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

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Page 86: Ciett economic report_2011

About Ciett

86

As the International Confederation of Private Employment Agencies, Ciett is the authoritative voice representing the interests of private employment agency industry across the world.

Founded in 1967, Ciett consists of 44 national federations of private employment agencies and seven of the largest staffing companies worldwide: Adecco, GI Group, Hudson, Kelly Services, Manpower, Randstad, and USG People.

Its main objective is to help its members conduct their businesses in a legal and regulatory environment that is positive and supportive.

Ciett is divided into five regional organisations: Africa, Asia [AsiaCiett], North America, South America [CLETT&A], and Europe [Eurociett].

Page 87: Ciett economic report_2011

AfricaMorocco | FNETTSouth Africa | APSO

South AmericaArgentina | FAETTBrazil | SINDEPRESTEMChile | AGESTColombia | ACOSETPerú | AETT Perú

north AmericaCanada | ACSESSMexico | AMECHUSA | ASA

Asia/Pacific Australia & New Zealand| RCSAChina | CAFSTJapan | JASSASouth Korea | KOSA

EuropeAustria | VZABelgium | FEDERGONBulgaria | BG StaffingCzech Republic | APPSDenmark | Dansk ErhvervEstonia | ESAAFinland | HPLFrance | PRISMEGermany | BZAGreece | ENEPASEHungary | SZTMSZIreland | NRFItaly | ASSOLAVOROLatvia | LASALithuania | TEAALuxembourg | ULEDI

Macedonia | NFTWAMNetherlands | ABUNorway | NHO ServicePoland | Polskie Forum HRPortugal | APESPERomania | ARAMTSlovakia | APASSlovenia | ZAZSpain | AGETT & AETTSweden | BemanningsförtagenSwitzerland | Swiss StaffingTurkey | OIBDUK | REC

Page 88: Ciett economic report_2011

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