The situation in the HR services market in 2023 reflected the mood among employers. Long-term employment planning in many organizations became outdated. Rising business costs and increasing wage pressure had a decisive impact on employers’ approach and the postponement of decisions to create new jobs for the future. As a consequence, a decrease in demand for recruitment services and a lack of significant growth in temporary work were observed.
As Tomasz Walenczak, Managing Director of ManpowerGroup in Poland emphasizes – We live in times of economic and political upheavals, both on a global and local market. We must get used to these cyclical storms; they’ve become our daily life. After an optimistic start to 2024, there are new turbulences related to a lack of talent, which 66% of employers in Poland point out. On the other hand, a slowdown in many industries is noticeable, resulting from organizational caution. This year will be a time of adaptation, focusing on reskilling and upskilling. Companies are focusing on increasing efficiency by implementing new technologies. Even though the IT sector has slowed down, the issue of AI, improving system efficiency, and new solutions remain. During these cyclical storms, flexible forms of employment will only gain in importance, and cooperation with recruitment companies will support cost optimization and ensure organizational process stability.
In 2023, member companies of the Polish HR Forum (PFHR) employed over 178 thousand temporary workers. We estimate that in relation to the entire market, this value increased by 1%. The number of hours worked, converted into full-time positions in the PFHR, exceeded 44 thousand, with no significant changes observed. The percentage of employment contracts in temporary work within PFHR member companies in 2023 was 88%, which compared to the market average of 39% shows how different the standards adopted in PFHR companies are from the rest of the market.
– Almost half of temporary workers are citizens of third countries, their percentage is increasing every year. The majority of positions on which temporary workers are employed are simple production jobs, warehouse workers, or machine operators. Demand for workers of this profile remains high, and there are fewer and fewer people willing to work in the domestic market. Given such low unemployment, candidates from other markets are the only option. Last year we also observed increasing difficulties in recruiting new employees from Ukraine, more declarations entered into the 2023 registry concerned citizens of Belarus. According to the Ministry’s data, there were over 200 thousand of them. Looking for new directions to acquire candidates is a trend that will intensify in the coming years – says Wojciech Ratajczyk, vice-chairman of the Polish HR Forum, CEO Trenkwalder.
The turnover of member companies in the field of temporary work last year amounted to 4 345 million PLN. We estimate that the value of this market in Poland was about 6.9 billion PLN and increased by 15% compared to the previous year.
– The increase in the market value is largely due to the rise in temporary workers’ wages. The average salary in the enterprise sector at the end of last year increased by almost 10%. Salaries increased even faster in basic positions, e.g., for simple production tasks (where a large group of temporary workers is employed), this was the result of over a 19% increase in the minimum wage in 2023 – it all translates into an increase in the value of the temporary work market. Let’s remember that at every economic cycle, temporary work is the form of employment that employers readily reach for during an economic recovery, and Poland can boast the most optimistic GDP growth forecasts for this year in Europe. Additionally, funds from the Operational Program will stimulate the Polish economy and this year we can expect a significant increase in demand for work in many industries – comments Anna Wicha, President of the Polish HR Forum, Global Head of Outsourcing at The Adecco Group.
Marcos Segador Arrebola, Managing Director of Gi Group Holding Polska, adds that although the labor market situation is characterized by uncertainty, experts forecast a “defrosting” and a return to more active recruitment – Many indications are that the trends we have observed at the turn of the year will prove to be a sign of changes for the better. Forecasts for improving the economic situation in Poland are positive, experts predict an increase in GDP in 2024 to the level of 3.5%. However, in the situation of a prolonged shortage of staff, recruitment and retention processes will still require additional attention and unconventional solutions. We still see interest in external employment, including outsourcing or as part of temporary work. Although this model is often associated with lower-level employees, it is also popular among specialists. Last year we recorded a 13% increase in specialist recruitment in this form.
– Last year, employers experienced cost pressure amidst simultaneous wage expectations. This was due to lower domestic demand and weaker export prospects. As a result, especially in the last quarter of 2023, we observed a decrease in the number of job offers. Available positions were not attractive enough to encourage a change of employer, which limited rotation in companies and new recruitment. Since the beginning of the year, however, we see a revival in some sectors, mainly related to consumption forecasts and slight investment enthusiasm. According to our survey, one in four companies plans new recruitment in the first half of the year, which means an increase of 10 p.p. compared to the previous year. Most plans concern transport, logistics, shared services, and construction. However, the recovery process does not proceed in the same way everywhere. In some sectors, including those more closely related to export, the recruitment thaw may be postponed – summarizes Ewa Sarzyńska, Operational Talent Solutions Director, Randstad Poland.
In the outsourcing area, which for reporting purposes includes both outsourcing services and external forms of employment other than temporary work e.g., IT contracting, we observed a 2% decrease in turnover year on year last year. Member companies achieved a turnover in this area of 1 631 million PLN. The noted decrease is mainly due to lower demand for specialists in the IT area.
– The pandemic has caused a huge demand for IT services and solutions. In 2021, the demand for IT specialists doubled. This resulted in over-employment in the sector, which did not survive the economic slowdown. It is estimated that in 2022 and 2023, global BiG Tech companies lay off approximately 300,000 employees. We also felt the echoes of these actions in Poland. Currently, the situation is stabilizing somewhat, the demand for highly qualified specialists remains, while the demand for junior positions decreases. We know that over 20% of KPO funds will be allocated for digital transformation, which will certainly positively affect the demand for IT services in Poland – comments Michał Młynarczyk, a board member of the Polish HR Forum, CEO Devire.
Artur Skiba, President of Antal also looks optimistically towards the future – IT Contracting has become an optimal service that quickly, with reasonable costs and relatively high security, allows the smooth implementation of corporate goals. For 2024, we forecast further dynamic development of the service in Poland. Employers, unlike in previous years, will focus on employee experience. The decreasing number of offers for junior positions may indicate that entering the IT market will become more challenging, and expertise in the field will become a valuable asset. Therefore, given the current pace of technological and AI development, companies will increasingly reach out to trusted outsourcing partners.
The interest in other outsourcing services in Poland does not weaken, quite the contrary. As Jacek Opala, Board Member of Exact Systems, points out, outsourcing accounts for an increasing share of the services provided by his company, especially in the automotive industry – When undertaking outsourcing orders, we take on not only recruitment and employee delegation but also complete know-how in task execution along with quality control process planning and responsibility for the result. This is a significant added value of outsourcing that is increasingly appreciated not only by representatives of the automotive industry but also home appliances or FMCG. We expect the role of outsourcing to grow, also due to rising business operation costs. Companies need to focus more on their primary activity, directly related to their expertise, and in other areas, they count on the support of partners such as us. This increases their efficiency and competitiveness and optimizes costs. Flexibility is also crucial. According to the “MotoBarometr 2023” report, difficulty in long-term production planning has been listed among the leading HR challenges, hence the challenge to plan the workforce size. It is no longer related to production possibilities (problems with accessing semiconductors, parts), but to the demand side (currently production levels are higher than current orders). Therefore, the ability to respond flexibly to what happens in a production plant is crucial today.
The previous year was a challenge for recruitment companies. Increasing wage pressure and, as a result, less inclination of employers to create new jobs impacted the results of PHFR member companies, which in 2023 recorded a 12% drop in turnover in recruitment for Polish employers, achieving a result of 295 million PLN. Experts predict that 2024, despite the still-rising wages, will bring a revival and greater demand for workers.
In the opinion of Alex Shteingardt, Managing Director of Hays Poland, the coming months of 2024 may bring an improvement in the labor market. – Although employers are still observing the situation and many are holding back from starting recruitment, their declarations indicate greater readiness to invest in employees than in the last half-year. Recruitments will more often be a result of the need to fill vacancies arising from staff rotation rather than creating new jobs. Although this proportion may change, higher caution and cost discipline on the part of companies leads us to assume that in the near future, we will rather not observe a significant recruitment revival. Rising employment costs combined with the need for optimization may, on the other hand, result in an increased interest in temporary work and outsourcing of services in relation to intellectual work.
Also, Radosław Szafrański, Managing Director of PageGroup is optimistic – I expect that we will close the first quarter of 2024 with similar results to the fourth quarter of last year. We are optimistic about the Polish market because it is undergoing a revolution in some branches of the economy. This is visible, for example, in the services sector. Poland is becoming more attractive for new investments both due to advanced technologies and advanced processes. Considering that we will receive EU funds from the unlocking of KPO, and Germany should bounce back regarding its economy state, I see the second quarter of the year more optimistically. I think we are heading towards a return to the employees’ market. In some areas, there is still a shortage of high-class experts, for example, in the IT, artificial intelligence, or ESG industries. Currently, unemployment in Poland is at the level of 5%, annually, approximately 100,000 professionals leave the labor market and demographics do not inspire optimism. Therefore, from the employee’s perspective, I would not worry about a position in the labor market.
Companies sending employees to other European countries cannot complain about a lack of interest in their services. Last year, turnover in this area among member companies amounted to PLN 373 million and was 19% higher than the previous year.
– The first few months of 2024 show that delegating abroad should still be a trend in the labor market. Despite western markets slowly picking up in January and February, we still see interest in delegated workers. Countries of the Benelux, France, and Germany are waking up and starting to plan the next few months. Orders are placed for the second and third quarter of 2024.
