There may be trouble ahead...
The first quarter results from the industry Research unit’s 360º programme of tracking surveys with agencies, employers and agency workers paints a picture of continued optimism, but behind the headline figures there are warning signs about future growth.
The tracking surveys have now been running for more than 15 months, providing the opportunity for year-on year comparisons for the fi rst time. Agencies appear significantly more optimistic about short-term business prospects at the beginning of 2007 than they were a year ago, with 85% believing that business prospects would improve slightly or strongly compared to just 76% at the start of 2006.
Time series data shows that levels of agency optimism have increased month-on-month since September 2006.
More candidates available
The strong economy and an increase in the pool of candidates available appears to be contributing to agency confidence. Results from the first three months of 2007 show that agencies have more workers registered available for work compared to 12 months ago (33% of agencies had a candidate pool in excess of 1,000 compared to only 21% in the first quarter of 2006).
In spite of this, roughly the same number of workers are reported out on assignment.
And work is easier to find
At the start of 2006, 45% of workers found it relatively easy to find work. This figure increased to 50% for the first quarter of 2007, although ease of finding work reached a peak over the Christmas period. The latest data suggests that, on average, agency workers are registered with just under three agencies and have an average length of assignment of 158 days. The increased ability to find work may explain growing levels of overall satisfaction among agency workers. Satisfaction levels have increased from 69% to 84% (quite or very satisfied) over the year. The proportion of workers seeking a permanent position fell from 60% to 46% over the same period.
So what do employers think?
Employers’ outlook confirms agency optimism, with most predicting a slight increase in the use of agency workers over the next six months. Again, predicted levels of anticipated use are higher than at the start of 2006 with ‘speed’ being sited as the main reason for using agencies over in-house alternatives.
Underlying issues
But the survey reveals that employers have worrying underlying issues that may impact on future agency use if they are not addressed. The curve tracking overall employer satisfaction shows a downward trend over the past six months. Also, specific areas of agency support are perceived to have dipped, including ‘helpfulness of agency staff’ and ‘quality of workers’ supplied.
Conclusion
The Industry remains in good shape, but should be concerned that employers’ levels of satisfaction seem to be waning.
There are two camps of thought as to why this is happening. One says that some agencies are becoming complacent during a period of sustained growth.
The other, more sinister, scenario is that employers are becoming so demanding in terms of margins and additional services that some agencies are starting to buckle under the pressure.
These results are simply the inevitable consequences of forced economies around service delivery.
The 360 degree tracking research is made possible by the leadership and financial support of the Industry Research Steering Group. Current members include: Adecco, Pertemps, MatchTech, Meridian BS, Randstad and Vedior.
