talent market quarterly q4 2016 final

FOURTH QUARTER | 2016

G l o b a l T a l e n t M a r k e t Q u a r t e r l y

Source: IHS Global Insight (October 2016). Annual average estimated/projected growth in real GDP and annual average estimated/projected unemployment rates.2

India

Australia

China

Japan

France

Germany

Russia UK

Brazil

Canada

US

Mexico

WORLD

0%

2%

4%

6%

8%

10%

12%

0% 2% 4% 6% 8%

Un

emp

loym

ent

Ra

te (

20

17

p)

GDP Growth (2017p)

As 2016 draws to a close, global economic growth is projected to come in at a subdued 2.4% for the year, the fifth consecutive year below 3%. A slight acceleration to 2.8% is predicted for 2017 as growth in North America continues, South America and Russia see some recovery activity,

and APAC markets remain relatively strong. A positive outlook for global labor markets is also forecast, with unemployment continuing to decrease as economic activity improves. Despite this rosy outlook, significant risks exist including the implications of new government

administrations in several countries (particularly the US), the onset of the Brexit process, and financial market volatility.

Q 4 ‘ 1 6

G L O B A L E C O N O M I C &

L A B O R M A R K E T S N A P S H O T

0% 1% 2% 3% 4% 5% 6%

2019p

2018p

2017p

2016e

G D P G r o w t h

WORLD

AMER

EMEA

APAC

0% 2% 4% 6% 8% 10% 12%

2019p

2018p

2017p

2016e

U n e m p l o y m e n t R a t e

WORLD

AMER

EMEA

APAC


Sources: IHS Global Insight (November 2016); SIA North America Legal Update, Q3 2016; SIA Daily News, 09.06.16, 11.23.163

Consumer and business sentiment appear to be improving somewhat, but Brazil’s recession continues. Recovery is expected to be slow, as high inflation curbs spending and there is little room for fiscal intervention. Conditions in the labor market are expected to remain difficult.

1.2%2.0% 2.2% 2.2%

7.0% 6.9% 6.6% 6.4%

2016 2017 2018 2019

GDP Growth Unemployment

As oil prices are expected to strengthen, so should the Canadian economy and labor market. Employment growth, which has been below 1% for the past three years, is forecast to accelerate, driving down unemployment. Modest gains in wages are also expected.

The US economy and labor market are entering 2017 in good shape, but the implications of a new presidential administration are yet to be determined. There will likely be some major policy changes, and expectations are that interest rates and inflation will rise in the short term.

Although the solid outlook for the US economy is a positive factor for Mexico, negative sentiments towards the country voiced by president-elect Trump have dampened the forecast for the Mexican economy. The unemployment rate may rise slightly as job creation cools.

A M E R

-3.3%

0.5%2.1% 3.4%

10.5%9.5% 9.4% 9.2%

2016 2017 2018 2019


In the wake of the US election, some uncertainties have been solved but many still remain as it is unclear what policies president-elect Trump will pursue. Despite this lingering unpredictability, the economic and labor market outlooks for North American markets are positive for 2017. South

American economies are also forecast to see an upturn in 2017, although Brazil and Venezuela will struggle to climb out of deep recessions.

BR

AZ

IL

CA

NA

DA

1.5%2.2% 2.2% 2.2%

4.9% 4.7% 4.6% 4.6%

2016 2017 2018 2019


US

2.1% 2.1% 2.9% 3.2%

4.0% 4.1% 4.0% 3.9%

2016 2017 2018 2019


ME

XI

CO

L E G I S L A T I V E H I G H L I G H T S

U N I T E D S T A T E SA federal judge temporarily blocked the new overtime exempt rule that was scheduled to become effective on December 1, 2016. Under the new rule, the minimum salary for an employee to be exempt from overtime pay was set to increase from $23,660 to $47,476.

B R A Z I LThe new government of Michel Temer has pledged to introduce an overhaul of the country’s outsourcing legislation. Currently, outsourcing is only permitted for “non-essential” jobs, but there is considerable uncertainty around what is considered “non-essential.”

C A N A D AThe Canadian government released a review of the Temporary Foreign Worker Program in September 2016. The review, which is facing criticism for both its brevity and its content, provides recommendations on easing limitations on temporary foreign worker hiring.


4

Economic growth is expected to be subdued in 2017 as uncertainty from the external European environment as well as the upcoming spring election weighs on activity. Although recent reforms will introduce some flexibility in the labor market, the employment situation remains fragile.

1.8% 1.7% 1.7% 1.6%

6.1% 6.1% 6.2% 6.2%

2016 2017 2018 2019


Germany’s economy is forecast to remain on a solid growth path, buoyed by consumer spending and increasingly by investment. The unemployment rate remains at historically low levels, although the influx of refugees may raise rates slightly in the near term.

The official EU exit process is expected to begin by the end of March 2017, ushering in uncertainty in the economy. The labor market, which had shown some resilience in the aftermath of the Brexit vote, is also expected to lose some momentum as business confidence falters.

As oil prices recover, so too will the Russian economy; however, growth is still expected to come in below 1% for 2017. Despite reports of job losses in both services and manufacturing, the unemployment rate remains relatively low, suggesting some level of underemployment.

E M E A

1.2% 0.9% 1.3% 1.2%

10.0% 9.8% 9.6% 9.6%

2016 2017 2018 2019


FR

AN

CE

GE

RM

AN

Y

2.1%1.2% 1.2% 1.5%

5.0% 5.3% 5.8% 6.1%

2016 2017 2018 2019


UK

-0.6%

0.8%1.6% 2.1%

5.7% 5.7% 5.1% 4.9%

2016 2017 2018 2019


RU

SS

IA

L E G I S L A T I V E H I G H L I G H T S

U KPrime Minister Theresa May has ordered a review of the country’s labor laws. The emphasis will be on examining job security, pay, and the rights of workers, particularly for self-employed, temporary, and zero hours contract workers.

G E R M A N YAmendments to the Labor and Social Affairs Employment Act (AUG) were approved by the German government.The new regulations stipulate that temporary workers may only be used for 18 months (unless a collective agreement governs a longer duration), and that temporary workers should also receive the same wages as the permanent staff after nine months. The proposed changes will come into effect on April 1, 2017, as opposed to the previous date of January 1, 2017.

Labor markets continue to improve across western Europe, but many still face challenges including high youth unemployment. Uncertainty stemming from the start of the Brexit process and elections upcoming in 2017 is weighing on economic forecasts for many European markets.

Rising oil prices should help Russia and many Middle Eastern economies, but geopolitical, fiscal, and structural challenges remain.

Sources: IHS Global Insight (November 2016); SIA EMEA Legal Update, Q3 2016; SIA Daily News, 10.24.16, 10.12.16

F R A N C EFrance’s parliament adopted controversial labor law reforms that are aimed at making layoffs easier, in effect from August 2016.


5

Continued healthy expansion is predicted for the Australian economy, driven in part by several new liquefied natural gas projects in the coming years. The increased investment is expected to help boost job creation, but higher labor force participation may moderate large gains in unemployment.

7.1% 7.5% 7.5% 7.8%

8.6%7.9%

7.5% 7.4%

2016 2017 2018 2019


China’s gradual economic slowdown is expected to persist in 2017. The subdued economy, along with record numbers of university graduates, is leading to "slow employment“ among young people, who are pursuing further studies, entrepreneurship or taking a gap year rather than working.

Steady and modest growth for the Japanese economy will be underpinned by government stimulus. The labor market remains very tight with steady employment demand and historically low unemployment levels; however, lower corporate profits are limiting wage growth.

The Indian government's sudden recall of the two largest denomination currency notes is expected to curb growth prospects in the short term, as liquidity issues may disrupt household and business spending. The move was intended to help reduce India's black-market economy.

A P A C

2.8% 2.5% 2.7% 2.9%

5.7% 5.6% 5.5% 5.5%

2016 2017 2018 2019


Despite some tempering of economic activity in the major growth engines of China and India, APAC is still expected to outpace all other regions. The labor market outlook for APAC is similarly healthy as job creation continues and unemployment is on a downward trend.

AU

ST

RA

LI

AI

ND

IA

0.6% 0.7% 1.0% 0.6%

3.1% 3.2% 3.2% 3.3%

2016 2017 2018 2019


JA

PA

N

6.7% 6.4% 6.4% 6.4%

4.1% 4.1% 4.1% 4.0%

2016 2017 2018 2019


CH

IN

A L E G I S L A T I V E H I G H L I G H T S

I N D I AThe recent session of parliament saw reform activity on several labor laws. One bill seeks to extend and enhance maternity leave provisions, while another aims to increase the compensation amount provided to workers in the case of industrial accidents. The Child Labor law was also amended to ban employment of children under 14 across all sectors, prohibits the employment of those aged 14-18 years in hazardous occupations, and introduces more stringent punishments for offenders.

S I N G A P O R EAn employment pass or permanent resident status is required for all foreign professionals, managers, and executives who work in Singapore. As of January 1, 2017, the qualifying salary for Singapore Employment Pass applications will increase from $3,300 to $3,600 per month.

Sources: IHS Global Insight (November 2016); SIA APAC Legal Update, Q3 2016; Straits Times, 11.24.16


8.4%

6.4%

5.0%

2.8% 2.5% 2.3% 1.6% 1.1%

Italy Spain Mexico France US UK Canada Australia

6

W O R L D

G L O B A L T A L E N T S P O T L I G H T :

Y O U T H W O R K F O R C E

T A P P I N G T H E V A S T P O T E N T I A L O F Y O U N G W O R K E R SYoung workers are a strategic asset for countries, representing the future of their labor force –but new research from PwC shows that while some countries are succeeding in developing their young labor force, others are losing out on opportunities.

PwC developed the Young Workers Index, which measures how well OECD countries are developing the economic potential of their younger workers over time. The index is a weighted average of several indicators that reflect the labor market impact and educational participation of people from ages 15 to 24.

Which countries perform best at developing young talent? Core European and Nordic countries lead the list, comprising the top seven spots, with Switzerland and Germany at the top. Germany in particular has seen significant improvement in the outlook for young workers over the past decade, boosted by a strong vocational training framework and reforms that have increased labor market flexibility. Many Southern European countries, on the other hand, are still struggling to recover from the harsh impact the economic recession had on the young workforce.

PwC estimates that the economic potential that is being lost by countries that are not taking full advantage of their young workforce may be tremendous. Combined, OECD countries could add over $1 trillion to their total GDP over the long term if laggard countries matched the level of young worker engagement seen in Germany.

Source: PWC Young Workers Index 2016

P O T E N T I A L L O N G T E R M B O O S T T O G D P F R O M D E V E L O P I N G Y O U N G T A L E N T

Y O U N G W O R K E R S I N D E X : S E L E C T E D O E C D C O U N T R I E S

0 20 40 60 80

Italy

Greece

Spain

Portugal

Turkey

Mexico

Ireland

Belgium

France

UK

Korea

OECD AVERAGE

Finland

New Zealand

Sweden

Japan

Australia

Israel

US

Canada

Netherlands

Denmark

Norway

Iceland

Austria

Germany

Switzerland

2015

2006

*Total across 30 OECD countries: $1.1 trillion

$1.1T represents only 30 of 35 OECD countries for which all data was available

YOUNG WORKERS INDEX INDICATORS INCLUDE:

• NEET rates (young people not in employment, education, or training)

• Employment rates• Unemployment rates• School drop-out rates• Educational enrollment

rates


7

I N D U S T R Y

W O R K F O R C E S O L U T I O N S S P O T L I G H T :

H R T E C H N O L O G I E S

Sources: HR Technology Disruptions for 2017, Deloitte by Bersin 2016; HR Technology is Helping to Change the Entire Work Culture, TLNT 2016; Talent Tech Labs

T A L E N T R E L A T I O N S H I P & T E C H N O L O G Y D I S R U P T I O N SWith the talent industry poised at a shift in both management philosophies and technologies, there is a great deal of opportunity for disruption: the marketplace is shifting from tools that automate traditional HR practices to platforms and apps that make life at work better. Driven by massive technological change—the shift from cloud to mobile; the explosion in analytics and artificial intelligence; and the emergence of video, social systems, and wearables—HR platforms are changing. And even more importantly, the way we manage people has changed, making many of the traditional HR systems from only a decade ago seem out of date.

When HR technology providers emerged in the 1990s and early 2000s, their primary business objectives were to automate and integrate traditional human resources processes such as hiring, payroll and training. More recently, the HR technology market has consolidated, moving rapidly toward cloud-based solutions and introducing people analytics, as organizations leverage data to help attract and retain top talent.

Now as we move toward 2017, new research by Deloitte finds that next generation HR systems will be people- rather than process-focused, offering solutions that contribute to employees’ work experience, engagement levels and work-life balance needs. Examples of these next generation solutions include “always on” engagement and social recognition tools, mobile learning apps, and enhanced gig worker platforms offering free agents and organizations alike new tools and systems to help get work done. These, and other HR technologies focused on enabling a more fluid, connected and self-directed workforce, will not only improve the talent experience, but may lead to better business outcomes as well.

“Today, companies are far less focused on automating and integrating their talent practices. Instead, they are worried about employee engagement, teamwork, innovation, and collaboration. They want HR tech solutions that are engaging, useful, and productivity-oriented. Integrated talent management is still important, but it has become a “hygiene” problem. The real focus is on reinventing how people work; creating team-based tools for goal alignment and coaching; putting in place systems to provide feedback and measure engagement; and rethinking the way we measure performance, manage careers, and enable individual learning.”

― HR Technology Disruptions for 2017, Deloitte by Bersin

2000 2016 & beyond

AUTOMATEHR process automation

INTEGRATEIntegrated

talent management

ENGAGECloud-based

and data driven

EMPOWERApps that

make work life better

progression over time

Benefits/ compensation administration

HRISATS

Sourcing/ recruiting

Learning management

Integrated/ cloud-based workforce management

Performance management

Succession management

Analytics

Social integration

Real-time engagement

Mobile, self-service

Culture & team connection

Proactive learning

Wellness

E V O L U T I O N O F H R S Y S T E M S

Freelance Marketplace/ Management

Employer Reviews

Automated Referrals

Crowdsourced Recruitment

Candidate Relationship

Management

Job Marketing/ Distribution

Resume Parsing

Talent Matching Systems

Job Boards

Skills/ Psychometric Assessment

Recruitment Marketplaces

Social Search

Social CV/ Resume Building

Career Advice/

Coaching

Video Interviews

T A L E N T T E C HS E L E C T E D

A R E A S O F F O C U S

ABOUT KELLY SERVICESAs a global leader in providing workforce solutions, Kelly Services, Inc. (Nasdaq: KELYA, KELYB) and its subsidiaries offer a

comprehensive array of outsourcing and consulting services as well as world-class staffing on a temporary, temporary-to-

hire, and direct-hire basis. Kelly® has a role in managing employment opportunities for more than one million workers

around the globe by employing 550,000 of these individuals directly with the remaining workers engaged through its talent

supply chain network of supplier partners. Revenue in 2015 was $5.5 billion. Visit kellyservices.com and connect with us

on Facebook, LinkedIn, & Twitter.

A KELLY SERVICES REPORT

All trademarks are property of their respective owners. An Equal Opportunity Employer. © 2016 Kelly Services, Inc. 16-0084

Kelly Services Inc. makes no representation or warranty with respect to the material contained within this report.

kellyservices.com

talent market quarterly q4 2016 final

Recruiting & HR