The market for external personnel service providers in Austria experienced a slight setback last year, as indicated by a recent study by Interconnection Consulting. After two consecutive years of double-digit growth, the overall value of the market decreased by -1.7% in 2023. Although growth in 2023 was conservative, increases in value are expected in the coming years.

In 2023, the market for personnel service providers in Austria generated a total revenue of 203.5 million euros. Despite this solid result, it failed to reach the remarkable previous year’s level of 207.0 million euros with a double-digit growth of 20.9%. Staffing services saw a lower decrease in value, while quantitative growth (number of filled positions) declined significantly by -8.5%.

This discrepancy can be attributed to increased placement fees charged by personnel service providers, partly due to salary increases resulting from inflation (placement fees are typically tied to the salary of the placed candidates), and partly due to increased staffing efforts.

IT and Telecommunications Remain the Largest Occupational Segment

Despite the overall negative growth in 2023, some professional groups experienced positive developments, while others faced challenges. The tourism sector saw a notable increase of 6.2%, making it the sector with the highest growth rate. The IT sector maintains its leading position with a revenue share of 22.0%, showing high potential for future growth. Particularly promising is the growth potential in the engineering sector, with a projected growth rate of 5.0%.

In terms of the number of placed individuals, the entry-level sector accounts for 15.1% while in value it represents only 7.0%. Executive search accounts for 44.9% of total revenue but only about 20.4% in quantity, illustrating the significant variation in placement fees between the areas.

Importance of Direct Sourcing is Increasing

Direct sourcing is becoming increasingly important in the industry, while traditional portal searches are losing ground. According to recruiters, portals rarely deliver suitable profiles, especially in the specialist area, which is described as partly dried up. Therefore, there is a growing reliance on direct sourcing, even in the specialist recruitment sector, which was previously mainly associated with executive search. Companies are increasingly relying on active sourcing to counteract the shortage of skilled workers.

Since many companies do not have a sufficient pool of applicants and still primarily rely on online portals, the demand for external support from recruiters will remain high. In this context, the focus of consulting is increasingly shifting towards quality. The quality of applicants is still more important than the speed of filling positions.

The Top 5 Companies Account for 27% of the Market

The leading personnel service providers in Austria, alphabetically listed, are Deloitte, Egon Zehnder, epunkt, ISG, and Michael Page. These companies account for approximately 27% of the total market, with epunkt playing an outstanding role as the market leader, especially in the IT sector. The top 50 players have a combined market share of 75.7%. The industry remains dynamic and, despite short-term challenges, offers promising opportunities for the future.

25/04/2024

Copyright: Interconnection, Publication free of charge for coverage regarding the study and InterConnection Consulting.