FIRST QUARTER | 2019 - Kelly Services
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FIRST QUARTER | 2019
Global Talent Market Quarterly Q1‘19
The outlook for the global economy in 2019 is decidedly cooler across most major economies, with overall growth projected to slow from
3.2% in 2018 to 2.9%, largely driven by trade tensions and political uncertainty. On the labor force side, although there are risks related to
lower participation rates and diminishing productivity, markets remain tight with unemployment in general projected to stay the course.
GLOBAL ECONOMIC & GDP Growth
LABOR MARKET SNAPSHOT 6%
0% 4.9%
4.7%
5% 4.5% 4.6%
AMER
4% APAC
2% Japan 3.2%
2.9% 2.8% 2.8%
Germany EMEA
Unemployment Rate (2019p)
3% 2.5%
China 2.3%
US WORLD
4% UK Mexico 2.0% 1.8%
2%
2.1% 1.8%
1.6% 1.7%
Russia 1%
Australia
6% 2018e 2019p 2020p 2021p
Canada
Unemployment Rate
8% WORLD
France 10%
India
8.8% 9.0% 8.9% 8.8%
9%
10% AMER
Brazil 8% 7.5% APAC
7.3% 7.3% 7.3%
7% 6.7% EMEA
12% 6.8% 6.6% 6.6%
0% 2% 4% 6% 8% WORLD
6% 6.5% 6.7%
6.3% 6.1%
GDP Growth (2019p)
5%
2018e 2019p 2020p 2021p
2 Source: IHS Markit (March 2019). Annual average estimated/projected growth in real GDP and annual average estimated/projected unemployment rates.Global Talent Market Quarterly AMER
Although economic fundamentals in North America remain mostly strong, with slightly cooler growth and tight labor markets, South America is a
mixed bag: Brazil is underperforming, while Argentina and Venezuela remain in recession and markets such as Peru and Chile are relatively healthy.
COUNTRY SPOTLIGHT
C A N A D A
B R A Z I L
12.1% 5.8% 5.8% 6.1% 6.3%
11.1% PERU
10.0% 9.2%
2.1% 1.9% 2.0% 1.9% 6.6% 6.9% 6.8% 7.0%
1.8% 1.7% 1.7%
1.3%
3.7% 3.8% 3.4% 3.6%
2018 2019 2020 2021 2018 2019 2020 2021
GDP Growth Unemployment GDP Growth Unemployment
Following a historically severe recession in 2015/16, Canada’s labor market is adding jobs at a robust
the Brazilian economy is seeing a very subdued pace to start 2019, even as the economy faces 2018 2019 2020 2021
rebound. GDP growth was just over 1% in 2017 and some headwinds. GDP growth is projected to GDP Growth Unemployment
2018, and is expected to edge up slightly in 2019. remain in the 2% range over the short term.
The Peruvian economy is strong compared to
many of its regional peers, with GDP growth
projected to edge up slightly to 3.8% in 2019.
Renewed investment in the mining sector and
U S
M E X I C O
an increase in construction and infrastructure
4.3% 4.4% activity (particularly the large-scale plans to
4.1% 3.9% 3.7%
3.3% 3.6% 3.6% fix roads and other structures damaged by
2.9% the effects of El Niño-related storms in 2017),
2.1% 1.8% 1.8% 1.7% 2.4% 2.0% 1.7% should help boost growth. Inflation, which
had spiked in the aftermath of the storms,
has also settled back down.
2018 2019 2020 2021 2018 2019 2020 2021
GDP Growth Unemployment GDP Growth Unemployment Job creation in Peru has been somewhat
uneven, with the service and commerce
Formal job creation in Mexico in 2018 was decent The US added nearly 2.7 million jobs in 2018, a sectors outpacing manufacturing and
but softer than the previous year. The outlook for remarkable performance considering the late-stage construction. Unemployment is expected to
the mining, construction, and manufacturing sectors economic cycle. As the boost from fiscal stimulus tick back up after a healthy 2018.
is weak, suggesting more tempered job growth. fades, economic growth will begin to slow.
3 Sources: IHS Markit (March 2019)Global Talent Market Quarterly APAC
Led by China, the APAC region also is likely to see a slight economic cooldown in 2019. Despite the easing in trade and economic activity, most
labor markets in APAC remain resilient with relatively stable unemployment rates.
COUNTRY SPOTLIGHT
C H I N A
A U S T R A L I A
6.6% 6.3% 6.0% 5.9% TA I WA N
5.3% 5.2% 5.3% 5.3% 3.8% 3.8% 3.8% 3.8%
3.0% 2.7% 2.7% 2.6%
3.7% 3.7% 3.7% 3.7%
2018 2019 2020 2021 2018 2019 2020 2021
2.6% 2.1%
GDP Growth Unemployment GDP Growth Unemployment 2.0% 1.9%
Australia’s growth was strong at 3.0% in 2018, but is The Chinese economy remains on a gradual
expected to moderate somewhat in 2019 as export slowdown path, with GDP projected to grow 6.3% in 2018 2019 2020 2021
growth and household consumption weaken. The 2019. The government will likely introduce monetary
labor market is still experiencing skills shortages. and fiscal stimulus to manage the slowdown. GDP Growth Unemployment
Taiwan maintains a complicated economic and
political relationship with mainland China. The
9.1% slowdown in the Chinese economy, along with
8.9% 8.7% 8.7%
J A P A N
I N D I A
a softening in the electronics sector, is helping
to create a similar slowing effect on Taiwan’s
economy. GDP growth is projected to moderate
2.4% 2.5% 2.6% 2.7% to the 2% level in 2019 as the export
environment remains subdued.
0.8% 0.7%
7.2% 7.1% 7.0% 6.9% 0.7% 0.5%
Despite the moderation in economic growth,
2018 2019 2020 2021 labor market performance is projected to
2018 2019 2020 2021
remain solid. Taiwan has a highly-skilled and
GDP Growth Unemployment GDP Growth Unemployment
highly-educated labor force. The government’s
The outlook for India’s economy is for continued Japan’s economic growth is projected to remain just economic revitalization program is targeting
strong growth in the 7% range. Modest fiscal under the 1% range in 2019 before slowing amid a growth in emerging sectors such as biotech/
stimulus measures will offset some headwinds, weaker export climate. Sustained skills shortages pharma, green energy, smart machinery, and
including lower investment and consumer spending. continue in the labor market. the Internet of Things.
4 Sources: IHS Markit (March 2019); Taiwan TodayGlobal Talent Market Quarterly EMEA
A weakening trade environment and business and political uncertainties—fueled in no small part by Brexit concerns—are dampening the outlook
for economic growth across Europe in 2019. Nevertheless, labor markets remain tight with skills shortages abounding.
COUNTRY SPOTLIGHT
G E R M A N Y
F R A N C E
9.1% 8.8% 8.7% 8.6%
TURKEY
3.4% 3.2% 3.2% 3.1%
1.5% 1.5% 1.0% 1.0% 1.2%
1.1% 0.9% 0.9%
12.2% 12.4% 12.4%
10.9%
2018 2019 2020 2021 2018 2019 2020 2021
2.5%
GDP Growth Unemployment GDP Growth Unemployment 1.1% 1.5%
0.3%
The French economy will grow slowly over the short Despite ongoing domestic demand strength, the
term, constrained by external demand risks. The external environment is also projected to dampen 2018 2019 2020 2021
labor market also is expected to show marginal German growth in 2019. Labor market conditions GDP Growth Unemployment
improvements, with unemployment easing. remain extremely and historically tight.
Turkey’s economic growth plunged in late 2018,
as a currency crisis led to tightened economic
policies. In addition, inflation, already high
U K
R U S S I A
before the lira collapse, ballooned to 25% and
4.8% 5.0% 5.0% 4.9% 4.9% beyond in the fourth quarter of 2018. As a
4.4% 4.7%
4.1% result, the country faces recessionary conditions
2.3% in the first part of 2019, with some recovery
1.5% 1.7% 1.7% 1.4% 1.4% predicted for the second half of the year.
0.9% 1.1%
The manufacturing sector, a key component of
2018 2019 2020 2021 2018 2019 2020 2021 the economy, has remained relatively resilient.
However, inflation will temper domestic
GDP Growth Unemployment GDP Growth Unemployment
demand for products, and softer demand also is
After an unexpectedly strong performance in 2018, Uncertainties surrounding the Brexit process are expected across European countries, testing the
Russian economic growth is projected to moderate driving down confidence among businesses and resiliency of the sector in 2019. Labor market
in 2019 amid weaker domestic demand. The consumers alike; UK economic growth is expected conditions are also projected to weaken,
unemployment rate is forecast to tick up slightly. to come in at under 1% in 2019. including a spike in unemployment, in 2019.
5 Sources: IHS Markit (March 2019)Global Talent Market Quarterly LEGISLATION
New labor regulations specific to contract and temporary workers have been introduced, including equal pay and conditions for part-time,
contract, or temporary workers in Quebec, Canada; and the ability of contractors and other temporary workers in Poland to join labor unions.
IRELAND
CANADA A new bill was passed that prohibits zero
As of January 1, a new act in Quebec prohibits hours contracts, with exceptions for work
employers from paying part-time, contract or that is done in emergency circumstances INDIA
temporary workers less than full-time workers or short-term relief work to cover routine The Indian labor ministry has proposed
who are doing the same job. The same act also absences for the employer. legislation that would introduce a
requires temporary agencies who place foreign consolidated mandatory licensing
workers to be licensed, and it gives employees scheme for staffing companies. The new
the option to refuse to work more than two law would consolidate 13 separate
POLAND
hours beyond their normal daily hours existing licensing laws, and would
As of January 1, workers employed on civil
eliminate the need for staffing
law contracts such as self-employed
companies to procure a license for every
UNITED STATES contractors, interns and volunteers, will
job where they provide labor.
The minimum wage rate increased (or will become eligible to join or create trade
increase) in over 20 states in 2019. Nineteen unions. Contractors will also be entitled to
states increased minimum wages on January 1, certain protections stemming from union SINGAPORE
while new rates take effect at the end of March membership, such as protections against New amendments to the Employment Act
in Michigan and in July in Oregon and termination for participating in union extend rights such as holiday and sick
Washington DC. Additionally, some localities activities. leave entitlements, rights on dismissal and
have higher minimum wage rates: for example, contract termination, and salary payment
the $15 minimum wage is now in effect in New UAE rights to managers and executives above a
York City for businesses with at least 11 The cabinet passed a resolution that provides certain salary threshold. The amendments
employees and for all fast-food workers. equal labor market opportunities for workers also extend the definition of workers
with special needs/disabilities. Employers categorized as “vulnerable,” meaning that
must ensure that their recruitment practices, more workers will be entitled to other
COLOMBIA working conditions and environment, enhanced protections in areas such as
Under a new decree that comes into effect in compensation policies, and termination hours of work, rest days, overtime
June 2019, companies are responsible for levying policies do not discriminate against workers payments and annual wage supplements.
and paying social security contributions for any with special needs and disabilities.
self-employed workers or contractors they use.
6 Sources: SIA North America Legal Update; SIA Latin America Legal Update; SIA Europe Legal Update; SIA Middle East and Africa Legal Update; and SIA APAC Legal Update, Q4 2018; shrm.orgGlobal Talent Market Quarterly TA L E N T
G L O B A L TA L E N T S P O T L I G H T:
GLOBAL MOBILITY
WORKING ABROAD IS LESS ATTRACTIVE
Workers’ desire and willingness to relocate for their jobs depend on many 57% of workers said in 2018 they would be
things: personal and family obligations, political and economic conditions, 57% willing to relocate to another country for work
demographics and life stages, and even technological advances. A new report 64% in 2014
from Boston Consulting Group found that globally, workers’ attitudes about
relocating have changed since BCG conducted a similar study in 2014.
According to the new study, 57% of workers now say they would be willing to 61% of men 60% of non-parents
61% 60%
move to another country for work, down from 64% in 2014. Desire varies 53% of women 52% of parents
greatly by demographics, and also by country: more than 90% of workers in
India and more than 70% of Brazilian workers say they would move for work;
and men, workers without children, younger workers, and married workers
are more interested in relocating. Willingness to work abroad has increased 65% of married workers 61% of 20-somethings
65% 61%
substantially since 2014 in a handful of countries, including the US and UK. 51% of single workers 44% of those ages 60+
However, willingness to move decreased by more than ten percentage points
in 12 of the 50 largest countries in the survey.
% WILLING TO MOVE TO ANOTHER COUNTRY FOR WORK
≤50% >50%-60% >60%-70% >70%-80% >80%-90% ≥90% CHANGE 2014-2018
China ▼ Argentina Canada ▼ Australia Colombia India ▲ ▲ Increase of 10+
Greece ▼ Germany ▲ Finland Brazil ▲ Luxembourg Venezuela ▲ percentage points
Hungary ▼ Indonesia ▼ France ▼ Japan Norway ▼ Decrease of 10+
Poland ▼ Italy Malaysia Mexico South Korea percentage points
Russia Netherlands ▼ Switzerland ▼ Philippines ▼
Portugal ▼ Thailand ▼ Singapore No arrow: change
US ▲ UK ▲ between +10 and -10
percentage points
Selected countries
7
Source: Decoding Global Talent 2018, Boston Consulting GroupGlobal Talent Market Quarterly INDUSTRY
WORKFORCE SOLUTIONS SPOTLIGHT:
DIRECT SOURCING
MSP MODELS
A DIRECT APPROACH TO CONTINGENT TALENT Projected Growth Rate (CAGR 2016-21)
As employers continue to look for more innovative, effective, and efficient
15% 16%
ways to access and manage contingent talent, MSP models such as direct
sourcing and hybrid (which combine multiple sourcing models) are seeing 8%
strong growth. A direct sourcing model provides organizations with an 7%
outsourced service that leverages the employer´s brand to identify, pool, and 2% 3%
re-engage talent for contingent job opportunities.
Direct sourcing (sometimes called contingent RPO) currently is more prevalent Master Vendor IC/SOW Hybrid Direct Total
outside the Americas, and is projected to continue to supplant traditional Vendor Neutral Sourcing
vendor neutral and master vendor MSP solutions as talent optimization and
visibility become more critical to next generation MSP buyers.
KEY DRIVERS FOR MSP ADOPTION
CONTINGENT RPO:
WORKFORCE SOLUTIONS BUYER ADOPTION 1 Needing help to find skilled contingent talent
Sourcing that is in short supply to fill specific roles
AMER 20% 21%
2 Wanting to minimize organizational risk
EMEA 21% 17% Compliance surrounding use of contingent talent
APAC 27% 16%
3 Needing to have a comprehensive view of all of
Visibility the contingent talent within an organization
Currently In Place Seriously Exploring within 2 Years
Contingent RPO: An MSP model in which a supplier sources contingent “Kelly leverages its strong MSP capabilities, along with best-in-class
labor through client-dedicated recruiters who use the client brand to technology and state-of-the-art talent attraction methodologies, to create
attract candidates; candidate pools are owned by the client. (SIA) pools of mission-critical contingent talent for its Direct Sourcing clients.”
-- Keith Hensler, Kelly Services Direct Sourcing Product Manager
8
Sources: Workforce Solutions Buyers Surveys 2018 and The Lexicon, SIA; Next-Gen MSP, Nelson Hall, 2017 and 2019ABOUT KELLY SERVICES® As a global leader in providing workforce solutions, Kelly Services, Inc. (Nasdaq:KELYA) (Nasdaq:KELYB) and its subsidiaries offer a comprehensive array of outsourcing and consulting services as well as world-class staffing on a temporary, temporary-to-hire, and direct-hire basis. Kelly® directly employs nearly 500,000 people around the world in addition to having a role in connecting thousands more with work through its global network of talent suppliers and partners. Revenue in 2017 was $5.4 billion. Visit www.kellyservices.com and connect with us on Facebook, LinkedIn, and Twitter. A KELLY SERVICES REPORT All trademarks are property of their respective owners. An Equal Opportunity Employer. © 2018 Kelly Services, Inc. All rights reserved. Confidential and Proprietary. Kelly Services Inc. makes no representation or warranty with respect to the material contained within this report. kellyservices.com
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