IDC forecasts worldwide recruiting and staffing service spending will increase to $94 billion by 2008, with a compound five-year annual growth rate (CAGR) of 8.7%. The U.S. market will continue to lead in this area and will increase to $40 billion in 2008.
"The worldwide and U.S. market for recruiting and staffing services has turned the corner and is once again gaining momentum," says Lisa Rowan, Program Manager for HR Management and Staffing Services at IDC. "Recruiting services suppliers are beginning to offer capabilities that go beyond just the external hiring process to encompass other facets of the talent management continuum. By further extending their offerings through development or alliances with suppliers of other transformational HR services and core HR services, vendors will effectively distinguish themselves in a crowded field."
Among the key findings presented in this new study are the following:
- The worldwide market for recruiting and staffing services in 2003 increased 5.6% to $62 billion. The United States led this growth with recruiting and staffing services revenue increasing 6.1% to $26 billion.
- 2003 growth across the different segments of recruiting and staffing services varied, but the variability proved to underscore the overall improvement in the economy and employment picture. Recruiting-related segments experienced strong growth but outplacement services grew at a much slower pace, indicating that the market encountered fewer large-scale layoffs.
The single biggest obstacle for the end-to-end hiring solutions providers will continue to be the sheer number of vendors in the space and the buyer confusion that surrounds a crowded market. Suppliers are advised to take advantage of their revenue growth in recruiting-related transactional services to invest in the development and acquisition of services that prove to distinguish them from the competition in the area of transformational HR including workforce performance management.