Global Temporary Labor Industry Outlook

  • In 2017, the global temporary labor industry was valued at $463.1 billion and is expected to grow at a CAGR of 3 – 4 percent during 2017 – 2020, major revenue growth is expected in regions, such as China, Italy, France, Sweden, and India 
  • Temporary staffing constitutes $382 billion (89 percent) of the global staffing revenue, which was $428 billion in 2016. This indicates that the temporary staffing share has been growing regionally across different skill segments and industries
  • Slow revival of crude oil prices and stabilization would drive the growth of temporary labor industry in oil producing nations
  • The need for flexible workforce would drive the market especially in the APAC region. Gig economy is a rising trend in APAC, especially in Singapore and Malaysia, where the growth of online platforms supports the growth of gig economy

temporary-labour-global-market

Global Market Maturity

The strategic value additions that temporary labor can bring into the workforce have been realised and thus increasingly adopted in North America and Western Europe

Global Industry Trends

Temporary labor has been growing over the past few years, especially after the recession and slow recovery experienced across regions. Some of the factors enabling the growth have been identified and compared across regions

Global Temporary Labor Drivers and Constraints

This industry has more drivers than constraints, which contributes to the growth of the industry. Some of the prominent drivers are demographic changes, high demand for SOW and IT professionals, growth in the gig economy and technology

Drivers

  • Demand for SOW:SOW demand is increasing as it allows the client to control costs and engage staff based on the project and the pay, on completion of the project or deliverable
  • Demand in transportation and logistics:The demand for temporary labor is seen to be increasing in transportation and logistics due to the growth in warehousing, trucking and other manufacturing sectors 
  • Demand for IT professionals: The demand for temporary IT professionals is growing in the Nordic countries, which in turn drives the growth of professional temporary staffing 
  • Technology:The emergence of Human Cloud and VMS has a positive effect on the industry as it makes the process better controlled and manageable 
  • Growth in the gig economy:The baby boomers are exiting from the workforce. There is a need to retain the immense knowledge of these workers, whose services can be obtained by employing them as temporary workers, which would ensure that these more experienced workers enjoy increased flexibility in their work options

Constraints

  • Growing skill gap: Globally, preferred skills are lagging across industries, and employers are finding it challenging to fill the gap formed. This skills/talent gap has given rise to contingent workforce drastically
  • Office space constraints:Temporary workforce operate on an interim basis but require certain facilities to complete the work, such as PCs, workstations and other essentials. Hiring a large pool of temporary laborers results in the expenditure of basic essentials, which could lead to an increase in cost-per-hire
  • Artificial intelligence and robotics (Automation):Growth in robotics and artificial intelligence could result in automation of jobs, where a majority of blue-collar temporary workers are employed. The onset of such a technology could result in temporary labor being replaced, due to cost savings and efficiencies, which could be achieved