Worldwide Recruiting and Staffing Services Spending to Reach $85.5 billion by 2007, A Growth Rate of 7.7%, IDC Reveals
FRAMINGHAM, MA – MAY 12, 2003 – The weak economic environment that persisted throughout 2002 negatively affected recruiting and staffing services in the United States and around the globe, a new report from IDC reveals. The study indicates that the worldwide market for recruiting and staffing services in 2002 was $58.9 billion, a decrease of 6.3% from 2001. One bright spot, however, was the increased demand for end-to-end hiring process automation technologies and services.
"Although the worldwide and U.S. economic slowdown has negatively impacted online job boards and traditional recruiting and staffing services, we expect the market to stabilize and return to growth over the forecast period as economies recover," said Marc Pramuk, senior analyst for HR Management and Staffing Services at IDC. "Greater opportunities abound for providers of comprehensive hiring process automation – especially as the scope of these offerings expands to include internal hires as well as external applicants and as it links more strongly with clients' efforts to address retention, performance measurement, and workforce optimization."
Among the key market trends presented in this new study are the following:
IDC forecasts that worldwide recruiting and staffing service spending will increase to $85.5 billion by 2007, with a compound annual growth rate (CAGR) of 7.7% during the period. The U.S. market will increase to nearly $36.6 billion in 2007 on a CAGR of 8.8%.
The greatest challenges facing recruiting and staffing service providers are the continued worldwide economic uncertainty and the threats of war and terrorism around the globe. A key obstacle impeding growth in hiring is the need for organizations to maximize their return on investments in the workforce. Yet the lack of generally accepted metrics and performance benchmarks inhibit the ability of HR organizations to maximize this return.
IDC expects the recruiting and staffing services market to continue to face soft hiring demand in 2003 before returning to historical growth levels by the end of 2004. Because of the level of economic and geopolitical uncertainty, service providers should be especially prudent in examining the available options and assessing the opportunities and strategies to best position themselves to survive and even thrive in the evolving marketplace. Recruiting and staffing service providers must position themselves to benefit from the growing interest in workforce optimization and performance management as an emerging opportunity.
The IDC study, Worldwide and U.S. Recruiting and Staffing Services Forecast, 2003-2007, (IDC #29162), presents the 2002 market sizing and a five-year forecast for 2003-2007 for the worldwide and U.S. markets for recruiting and staffing services, including the U.S. opportunity for erecruiting. In addition to presenting these forecasts for recruiting and staffing services, this document reviews key drivers and inhibitors that influence the timing andmagnitude of the market opportunities within them. The study concludes with guidance for service providers to aid their efforts toward establishing or expanding their services mixes and competitive presence in order to capitalize on the opportunities appropriate to their strategies, strengths, and situations.
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