A temporary boost: The industry will bounce back in the short term but has problems to face
London, United Kingdom (PRWEB) June 07, 2013
The Temporary-Employment Placement Agencies industry supplies people to replace or supplement a client's existing labour force on a short-term basis. Industry operators serve clients across a broad range of industries. According to IBISWorld industry analyst Andrew Johnson, “the industry is heavily affected by economic conditions, as companies prefer to preserve the jobs of permanent employees in a downturn.” However, temporary workers are often the first to be hired during the initial recovery phase. There are over 1.6 million temporary workers in the United zingdom, representing about 6.4% of the total labour force.
Industry revenue is estimated to grow at a compound annual rate of 0.9% during the five years through 2013-14, but it has been a turbulent period for industry operators. From a high of £29.3 billion in 2007-08, revenue fell to £26.3 billion in 2009-10. In 2013-14 the industry is forecast to have recovered, earning £29.3 billion of revenue. In 2013-14 the effect of resurgent business confidence is expected to be counteracted by increased demand for permanent employees. Consequently growth is expected to be flat over 2013-14, maintaining the level reached in 2012-13 when the industry was boosted by the use of temporary staff at the London Olympic Games.
Although there have been signs of an upturn in demand for temporary workers since 2010-11, this is being clouded by reduced demand from the public sector as the government implements budget and employment cuts. Newly introduced regulations, such as the Agency Worker Regulations (AWR) 2010, have buffeted the industry over the five-year period.
Johnson adds, “the short-term outlook for the industry is relatively good as continued uncertainty over the strength of the UK economy is expected to play in to the hands of temporary-employment placement agencies.” IBISWorld forecasts that industry revenue will strengthen in 2014-15, but over the longer term through to 2018-19, the industry is forecast to decrease. The continued decline will be partly due to the introduction of the AWR, which is expected to increase costs for agencies and employers, thus making employers more reluctant to hire temporary staff through industry players. A reduction in the supply of temporary workers is expected to negatively affect the industry in the medium term as business confidence grows and more permanent positions become available, reducing the number of people forced into temporary work.
The Temporary-Employment Placement Agencies industry is highly fragmented. Most operators are small or medium-sized establishments. In 2012, almost 70% of industry establishments employed fewer than 10 people. Although there are some large global players in the industry, their combined share of industry revenue is small. Indeed, the top four players account for less than 15% of total industry revenue with only Adecco classed as a major player.
For more information on the Temporary-Employment Placement Agencies industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Businesses in this industry supply labour to clients for limited periods to temporarily replace or supplement their existing labour force. The individuals continue to be employed by the agency but are supervised by the client at the worksite. The industry excludes employees outsourced on a long-term basis, who are classified in other industries according to the activity they perform.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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