Posted on: 8 September 2016 By: TeamEuropages

recruiting in Europe

While jobseekers have struggled in many sectors since the global financial crisis, the industry for providing jobs has remained steady. Recruitment has been a growth area for some years now, with the primary effect of economic instability being that it put many agencies off expanding abroad. Now that the climate around Europe is more stable and local businesses are operating with healthy margins, expansion looks to be an extremely compelling prospect.

Since the peak of the crisis in 2011, unemployment figures across the Eurozone have declined slowly but consistently, sitting at 10.1% as of March 2016. While youth unemployment and the overall rates for Spain and Greece largely refuse to budge, widespread economic recovery and initiatives to boost temporary work (such as the controversial ‘zero hour contracts’) have helped to improve the figures, and increased the role of agencies in vetting and helping suitable candidates. The turnover of temporary workers has risen markedly across Europe, with year-on-year growth figures from 2014 hitting 21% in Poland and 14% in Denmark.

The resulting boon to recruitment agencies is twofold: an increase in turnover obviously correlates to an increase in commissions, but it also means more people gaining experience in the workplace. This upturn in employment is resulting in a more confident and competitive workforce, where 52% of young Brits in January 2016 were actively seeking a career change, and job searches in February rose by 40%. Agencies are increasingly moving from helping the unemployed into low-level jobs to courting the best talent, and convincing them to move up the ladder.

EUreka moment

The boost to recruitment agencies is borne out in the figures. International recruiter Hays reported a 16% rise in its ROW and continental European profits going into 2016, with a 14% boost in 2nd largest market Germany and record rises in seven separate countries. Of eight European markets surveyed in 2016, seven saw year-on-year growth in revenue, with only Norway shrinking. A developing economy in Poland, and the lower penetration of temporary and flexible work, means that growth in this field is forecast to hold steady at 20%. And the hours worked by recruiters across ten surveyed countries rose by 2.5% year-on-year, with only Germany and Norway falling.

Even the post-Brexit picture in the UK is looking fairly rosy. The first half of 2016 saw a 10% rise in the formation of new recruitment agencies compared to the same period in 2015. When surveyed before the vote but after the referendum was scheduled, 86% of UK agencies were confident of achieving their goals in 2016. The jobs market is currently among the strongest in Europe, notably helped by the previous Prime Minister’s focus on creating jobs through temporary work and apprenticeships. The R&D and manufacturing industries are at the centre of a funding push, too, with significant tax rebates and the continued ‘Northern Powerhouse’ program looking to solidify multiple major industries across the country.

Within government, the new prime Minister’s promise to ease up on ‘austerity politics’ has breathed new hope into the public sector, with many expecting an increase in funding and a subsequent increase in available jobs. Brexit would appear to throw a spanner in the works, but while it certainly presents challenges, there may also be upsides for agencies. Should the UK choose to opt out of the EU Temporary Agency Workers Directive, it would cut down on the currently mandatory paperwork needed to catalogue all temporary workers. Though the weak pound would make initial investment more difficult, establishing European subsidiaries to a UK-based agency could significantly enhance profits in the long term.

Digital development

As the pace of economic recovery across Europe accelerates, temporary workers will become less fertile grounds for expansion. But the desire to start and grow businesses expands to other fields. The prevalence and success of startups across Europe is creating new demand for skilled workers that stands to be filled by agencies. Cities including Stockholm, Berlin and Amsterdam are turning into world-beating ‘tech hubs’, and the latter is making a claim to be Europe’s new financial capital. Using digital services and communications, it might not even be necessary to set up physical offices abroad. Companies could ‘soft launch’ with a website or other services and begin to build contacts locally before taking the financial plunge.

With fintech, Cloud technology and virtual reality the hot topics among entrepreneurs in 2016, there are myriad opportunities for recruitment agencies to be on the leading edge when it comes to niche interests. And the wider the net is cast, the more opportunities there will be to take advantage of talent in different areas, and potentially commute people across the EU’s open borders. Countries like Estonia and Poland, where the current HR infrastructure is still fairly nascent and many skilled workers are leaving for western Europe, could be the perfect locations to build a continental network.

The confidence within the sector is largely based on pre-Brexit figures, and the effects on the political and economic climate around Europe are difficult to measure. It is of course still possible that the UK will remain within the European Economic Area, and be subject to the same demand for freedom of movement. But at least within the Eurozone, the desire on the EU’s part to distance itself from the UK should shore up its own currency. If anything, the movement of operations from the UK and the rest of the world may work to reinforce the European economy, and contribute to the creation of a more malleable workforce.

As the founder of Open A European, Heather Landau has honed her skills in service advisory from the pragmatic to the practical. With a total of 25 years combined experience in international marketing and business development, Heather is a leading voice on company formation in Europe, and operates similar services across North America and the rest of the world.

Prior to OAEC, Heather worked in the IT research industry, selling research solutions to the likes of Hewlett Packard, IBM, Microsoft and Intel, as well as information providers Reuters. On top of her knack for helping SMEs develop into the USA, Australia and Europe, Heather holds a BA (Hons) in Modern Languages (French/Italian), and is conversational in German and Spanish.

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