Wednesday - 19 November 2008
Analysis 

Getting the Euro vision

Published: 20 August 2008  Author: Julian May 

As continental Europe starts to become more flexible with temporary employment laws, Julian May reports on the opportunities ahead for UK recruiters

UK recruiters are taking advantage of "softening" labour laws in continental Europe as the employment market opens up and demand for professional staff increases.

Peter Searle, chief executive of Spring Group, told Recruiter that France, Germany and Italy would be big growth areas for UK recruiters.

The IT recruitment firm, which already has offices in Rome, Milan, Metz, Frankfurt and Brussels, is opening offices in Toulouse and Lyon this year, with a presence in Paris and an office in Berlin.

Searle said: "The UK has a £25bn recruitment industry and the potential for European growth is huge."

Spring plans to double staff at its Italian operation this year to 24 and keep doubling the operations in France using organic growth. "The secret is having good local guys who know the marketplace and have the cultural understanding to run the operations.

"France is in a position now through [French President Nicolas] Sarkozy that the UK was in the 1990s when the government relaxed employment laws to create a flexible labour market, effectively allowing recruitment agencies to grow the temporary market."

Searle added that the government is allowing recruiters to supply people on a sub-contractual basis in France — to act as an intermediary — which is a "softening" of strict contract renewal regulations.

"Around 90% of temp work in France is low skilled and much of it in agriculture. But the demand for professional services in manufacturing, IT, financial, law, HR and supply management roles is going to create huge potential for recruiters, as the economies of Italy and France change from agricultural and low skilled to commercial," he said.

Meanwhile, global recruiter Empresaria, which opened offices in Germany after the liberalisation of employment regulations in 2005, has continued to see double digit growth in the temporary market because penetration remains so low.

Armin Preisig, head of European operations at Empresaria, maintains that Germany is the best placed central European country for structured growth in the temp market. "We have doubled the 6% organic growth in temporary help in the first and second quarters this year that Adecco achieved, well above the 5-8% average. This is against a background of a contracting GDP (gross domestic product) in Germany at the moment. As the economy lifts we will be in an excellent position, and France and Italy have slightly negative growth at the moment."

He said the stringent collective labour agreements where the trade unions had a major say in assignments were softening. "There remains two basic collective labour agreements in Germany. One very much favours higher pay rates and the other is cheaper for temporary agencies and less dependent on union agreement."

Despite workers' councils still holding a lot of sway when it comes to accepting temp help, the unions are realising that temp recruitment can create jobs and reduce unemployment, added Preisig.

He said the growth of SMEs in Europe, which understood the potential of temporary staff, and a shrinking labour market in Europe with greater demand for skills was providing UK recruiters with many opportunities.


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