By ET Bureau - January 24, 2023 4 Mins Read
Magnit™, a global Integrated Workforce Management (IWM) Platform provider, today released its Winter 2023 Europe Labour Market Report. The report highlights the constant & diverse challenges facing the European labour market due to rising interest rates, the energy crisis, global supply chain shortages, record inflation and the continuation of the war in Ukraine. It also details how negotiating this tumultuous landscape is further complicated by an unusual mix of positive and negative data trends.
“To help organisations better understand and navigate the changing marketplace, Magnit analysed billions of data points to provide insight across multiple countries focusing on professional and technology job roles,” says Sam Smith, President, EMEA at Magnit. “Across much of Europe we found a lack of confidence in the current economic market that is markedly different from the optimism that came at the start of 2022. This uncertainty is driving a focus on cost savings and re-evaluation of the workforce.”
Magnit’s analysis uncovered several key trends that are shaping the overall European market and driving the recent cautionary approach. Findings include:
Throughout Europe, employment is close to its highest ever levels, whilst EU unemployment sits at around 6%, the lowest of modern times. The UK, Sweden, Germany and Poland are all at or near to their lowest unemployment rates ever. However, early warning signs from the Benelux region may suggest the trend is reversing. Belgium has seen an 11% increase in unemployment since February 2022 and the Netherlands has seen a 16% increase since April.
While different markets have unique combinations of pressures, there is a common denominator of high interest rates, price inflation and supply chain restriction. These inflationary pressures are influencing hiring practises and leading many companies to re-examine pay rates, expand benefits, and increase focus on employee retention. Furthermore, the use of temporary labour remains a consistent strategy leveraged by employers to increase agility under these circumstances.
Whether through reassessment of external workforce relationships, further investment in market information and data, or the globalisation of contingent programmes, companies are exploring new ways to optimise contingent programme management and spend in Europe. Furthermore, as part of these cost-reduction initiatives there is a drive to invest in lower-cost locations such as Poland and other areas in Central and Eastern Europe (CEE) – popularly facilitated through an Employer of Record (EOR) solution.
Vacancies are up significantly year-over-year, however data from the last two quarters suggests that this growth is slowing in some countries, most notably the UK. In the UK, initial average increases in vacancies of 34% between Q2 2021 and Q3 2021 have fallen to more modest increases of 4% and 1% in the last two quarters. This suggests that the UK vacancy market has reached an apex and could see further declines in the short-term.
“Organizations should expect market turbulence to continue and for the economic downturn across much of Europe to be in full force over the next six months. Companies should take a strategic, data-driven approach to reconfiguring their workforce and leveraging contingent labour to increase their agility to address challenges and opportunities,” added Smith.
The report delves further into these trends and others, providing exclusive analysis of Magnit’s dataset and revealing related insights and best practices regarding unemployment and job vacancy rates, time to fill, and bill rates across Europe. Additionally, it provides a deeper look at seven key countries in the region and the unique trends and challenges in these geographies.
To compile this report, Magnit used proprietary algorithms that aggregate, cleanse, anonymise, and analyse data from a variety of internal and external sources, including hundreds of client programmes. The company manages data on hundreds of thousands of workers across over 51,000 unique roles, ensuring normalisation without the risk of skewed data.
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