q1 2016 global talent market quarterly

FIRST QUARTER | 2016

G l o b a l T a l e n t M a r k e t Q u a r t e r l y

Source: IHS Global Insight (February 2016). Annual average estimated/projected growth in real GDP and annual average estimated/projected unemployment rates.2

India

Australia

China

Japan

France

Germany

RussiaUK

Brazil

Canada

USMexico

WORLD

0%

2%

4%

6%

8%

10%

12%

-4% -2% 0% 2% 4% 6% 8% 10%

Un

emp

loym

ent

Ra

te (

20

16

e)

GDP Growth (2016e)

The outlook for the global economy in 2016 is uncertain, with financial market volatility, depressed commodity prices, and slowing in key emerging markets keeping growth prospects muted. Brazil and Russia face continued recessionary conditions, while China’s economic momentum continues to cool amid stock market instability and structural challenges—all leading to a significant amount of labor market uncertainty. Developed markets are

expected to weather these economic storms with generally moderate GDP growth, steady job creation, and stable to slowly falling employment.

Q 1 ‘ 1 6

G L O B A L E C O N O M I C &

L A B O R M A R K E T S N A P S H O T

0% 1% 2% 3% 4% 5% 6%

2018p

2017p

2016e

2015e

G D P G r o w t h

WORLD

AMER

EMEA

APAC

0% 2% 4% 6% 8% 10% 12%

2018p

2017p

2016e

2015e

U n e m p l o y m e n t R a t e

WORLD

AMER

EMEA

APAC


Sources: IHS Global Insight (February 2016); Lexology, 01.20.16, 12.16.15, 08.12.15; Associated Press, 01.21.163

The Brazilian economy is in recession, with corruption, political crises, and double digit inflation causing business and consumer confidence to fall to record lows. The economy shed 1.5 million formal sector jobs in 2015; unemployment is projected to rise further in 2016.

1.2% 1.6% 2.1% 2.3%

6.9% 6.9% 6.7% 6.6%

2015 2016 2017 2018

GDP Growth Unemployment

Headwinds from the decline in oil prices will put a damper on Canadian economic growth in 2016. The labor market is expected to be similarly tepid, with modest hiring in Quebec, Ontario, and British Columbia offset by challenges in the oil producing provinces.

Despite some mixed signals from the economy and labor market recently, fundamentals of both appear solid heading into 2016. Economic growth cooled slightly to end 2015, but employment gains are decent and unemployment continues to slowly decline.

Stronger US growth is expected to help the Mexican economy in 2016, but low oil prices will keep expansion in check. Formal sector job creation will continue, but unemployment may increase as workers transition from the informal sector to the formal sector.

A M E R

-3.7% -3.0%1.4%

2.4%

8.2% 9.7% 9.5% 9.4%

2015 2016 2017 2018


Although US economic and labor market growth is expected to hold up in 2016, other major Americas markets face greater challenges. Low oil prices are a factor in Canada’s more subdued outlook, while oil prices along with political and fiscal crises plague Brazil and other South American markets.

BR

AZ

IL

CA

NA

DA

2.4% 2.7% 2.9% 2.6%

5.3% 4.9% 4.9% 4.9%

2015 2016 2017 2018


US

2.4% 2.1% 2.8% 3.2%

4.4% 4.7% 4.3% 4.2%

2015 2016 2017 2018


ME

XI

CO

L E G I S L A T I V E H I G H L I G H T S

U N I T E D S T A T E SThe US Department of Labor has proposed raising the threshold for mandatory payment of overtime for salaried workers. The salary at which workers would become exempt from overtime would more than double (from the current $23,660 a year to $50,440 per year), meaning that workers earning less than that figure would be eligible for overtime pay.

B R A Z I LUnder a new crisis measure, employers that are in financial difficulties are now able to reduce their employees’ work hours and proportionally, their salaries, by up to 30%. The reductions must apply to all employees or a distinct functional group, and employees affected under this plan may not be terminated without cause during the reductions, and for an additional period following the reductions.


4

The economic recovery is expected to accelerate modestly in 2016, but still faces many headwinds. Growth will be too muted to significantly lower the high unemployment rate, and the government’s measures designed to boost employment are also unlikely to have much of an effect.

1.5% 2.0% 2.0% 1.7%

6.4% 6.3% 6.5% 6.5%

2015 2016 2017 2018


Despite significant risk factors, the German economy is projected to strengthen in 2016, supported by robust consumer demand. Although job creation is expected to remain healthy, the absorption of large numbers of refugees will keep unemployment rates somewhat high.

UK economic growth is projected to continue along a moderate trajectory in 2016. The labor market also continues to improve, with unemployment projected to dip as labor demand remains solid. Skills shortages are beginning to emerge in some sectors.

A host of challenges―low oil prices, strong consumer price inflation, sagging confidence, and financial sanctions—will continue to plague the Russian economy in 2016, nudging unemployment upward. A modest recovery should begin to take hold in 2017

E M E A

1.0% 1.3% 1.5% 1.3%

10.5% 10.3% 9.6% 9.3%

2015 2016 2017 2018


FR

AN

CE

GE

RM

AN

Y

2.2% 2.2% 2.5% 2.4%

5.4% 5.1% 4.9% 4.9%

2015 2016 2017 2018


UK

-3.9% -1.1%0.8%

2.5%

5.6% 6.0% 5.9% 5.3%

2015 2016 2017 2018


RU

SS

IA

L E G I S L A T I V E H I G H L I G H T S

P O L A N DOn February 22, 2016, a new amendment to the Labor Code comes into force. Under this amendment, if an employer enters into more than three fixed-term contracts with the same employee, or if those contracts run for a combined period of more than 33 months, the employee will then be considered permanent. Exceptions apply for certain types of contracts.

R U S S I AA new law that regulates the usage of temporary labor came into effect on January 1, 2016. Among the provisions: agencies supplying temporary labor must be registered and accredited in Russia, and must furnish temporary employees with both an employment contract and a separate contract stating the name of the client. The law also mandates that clients use temporary workers only in certain situations, and limits assignments to nine months.

Moderate economic growth is projected across much of Europe, bringing some job growth and declining unemployment. Meanwhile, plummeting oil prices and geopolitical troubles are negatively impacting many economies and labor markets in Eastern Europe and the Middle East.

Sources: IHS Global Insight (February 2016); SIA Legal Update, 12.23.15; Lexology, 02.01.16


5

Economic growth in Australia is expected to remain relatively muted in 2016, due to weak Chinese demand and ongoing cooling in the mining sector. These uncertain conditions are unlikely to spur much job growth, keeping unemployment rates elevated.

7.2% 7.6% 7.7% 7.7%

8.7%8.3%

7.9%7.5%

2015 2016 2017 2018


China’s economic momentum continues to slow. The 6.9% growth rate in 2015 was the slowest in 25 years, and the outlook calls for 6.3% growth in 2016. Official labor market data is notoriously murky, but the job market is expected to worsen as the economy struggles.

After volatile quarterly GDP growth in 2015, a slight acceleration is expected in Japan in 2016, ahead of the anticipated consumption tax hike in 2017. Steady worker demand and labor shortages are likely to lead to moderate employment growth and wage pressure.

India has become the fastest-growing large economy, supported by ongoing reforms, weak global oil prices, and public and private investment activity. A focus on boosting manufacturing activity should help create jobs in this sector.

A P A C

2.3% 2.1% 2.4% 2.8%

6.1% 6.0% 5.7% 5.6%

2015 2016 2017 2018


Although growth in India continues to accelerate, the slowdown in China and ongoing price weakness in natural resources and other commodities are undermining economic growth across many APAC markets. As a result, hiring outlooks for 2016 are somewhat subdued.

AU

ST

RA

LI

AI

ND

IA

0.7% 1.0% 0.6% 0.7%

3.4% 3.3% 3.5% 3.5%

2015 2016 2017 2018


JA

PA

N

6.9% 6.3% 6.3% 6.4%

4.1% 4.3% 4.2% 4.1%

2015 2016 2017 2018


CH

IN

A L E G I S L A T I V E H I G H L I G H T S

C H I N AA decades-old policy was lifted on January 1, 2016, allowing couples to now have two children. Along with this new policy comes changes to maternity leave provisions. Under the new law, married couples having their first or second child are eligible for extended maternity leave (and paternity leave, if applicable under local rules) regardless of age. Previously, extended leave was only available to a married woman who gave birth to her and her husband’s first child after she turned age 24.

I N D O N E S I ARules regarding the employment of foreign workers have been relaxed. The requirement to hire 10 Indonesian workers for every one foreign worker has been removed. Employers also no longer need a permit to appoint foreign directors and commissioners to Indonesian firms, or when foreign visitors attend meetings in Indonesia.

Sources: IHS Global Insight (February 2016); SIA Asia Pacific Legal Update, Q4 2015; bbc.com, 01.19.16; EFY Times, 01.22.16


6

W O R L D

G L O B A L D A T A S P O T L I G H T :

L A B O R F O R C E P A R T I C I P A T I O N

L A B O R M A R K E T D R O P O U T SThe ILO estimates that there are around 2 billion working-age people globally who are not in the labor market—and that number continues to climb. Around 26 million more people dropped out of the global labor market in 2015; the labor force participation rate is expected to fall from 62.9% in 2015 to 62.5% in 2020. Among large (G20) economies, labor force participation is forecast to see a greater drop, from an already-low 62.3% in 2015 to 61.6% in 2020.

Both structural and cyclical factors are behind falling participation rates. In economic downturns when employment opportunities are more scarce, many would-be workers become discouraged and leave the labor force, or stay in school longer than they would in a healthy economy. In some emerging economies, rising wealth and income status also may mean that more young people are seeking education rather than work, or that fewer women are working out of necessity. An increasingly older population—a significant issue particularly in many developed economies—can also factor into lower participation rates.

Source: World Employment and Social Outlook—Trends 2016, ILO; Beyond the Numbers, BLS, December 2015

58%

59%

60%

61%

62%

63%

64%

2015 2016 2017 2018 2019 2020

G 2 0 L A B O R F O R C E P A R T I C I P A T I O N R A T E S , P R O J E C T E D T O 2 0 2 0

G20 Markets Advanced G20 Markets

Emerging G20 Markets

% of working age (16-54) populationG20 Advanced Countries: Australia, Canada, EU28, France, Germany, Italy, Japan, South Korea, Russia, Saudi Arabia, UK, USG20 Emerging Countries: Argentina, Brazil, China, India, Indonesia, Mexico, South Africa, Turkey

13.9%

5.5% 5.0%6.0%

0.9%

15.4%

6.5% 6.4%5.4%

1.2%

Retired Ill or Disabled Going to School HomeResponsibilities

Other Reasons

U S : % N O T I N T H E L A B O R F O R C E B Y R E A S O N , P O P U L A T I O N A G E 1 6 +

2004

2014

A new study from the US Bureau of Labor Statistics shows that an increasingly older (and sicker) population is indeed one of the key causes of declining labor force participation in America. Retirees comprise the largest group of Americans who are not part of the labor force—and this group saw the largest increase over the past decade, from 13.9% to 15.4%. Those who couldn’t work due to illness or disability also grew by around a percentage point from 2004 to 2014, and now represent the second largest group of those not in the labor force. Education also played a part in lowering labor force participation over the last decade, with those citing school as their reason for non-participation growing from 5% to 6.4%.


7

I N D U S T R Y

W O R K F O R C E S O L U T I O N S S P O T L I G H T :

G L O B A L I Z A T I O N O F M A N A G E D S E R V I C E P R O V I D E R S

Sources: 2015 MSP Annual Report, Everest; 2015 Contingent Buyers’ Survey, SIA; Targeting MSPs, Nelson Hall, 2015

M S P G O E S G L O B A LAs the MSP market continues to mature, deals that span multiple countries are becoming more commonplace. As a result, markets outside North America are seeing greater usage of MSPs to manage companies’ contingent workforces.

Many multinationals still initiate MSP deals in their home countries—generally in North America or Europe—and then broaden the scope to include other geographies, but increasingly more are choosing to implement MSPs in multiple geographies concurrently as part of a holistic strategy.

The benefits of integrated, global MSP are significant. A comprehensive view of contingent talent across countries allows companies to improve demand management, leverage scale advantages, and drive multiple operational efficiencies.

62%

55%

37%

26%

38%

47%

APAC

Europe

North America

Current usage Exploring in next 2 years

G L O B A L M A N A G E M E N T O F C O N T I N G E N T W O R K E R S

G E O G R A P H I C S C O P E O F M S P D E A L S

12%28%

33%

31%

55%41%

U p t o 2 0 1 2 2 0 1 3 - 2 0 1 4

Single Country

Regional*

Global*

* Regional: multiple countries within the same region; Global: multiple regions

Duration of contract

Country A

Country B

Country C, D

Country A, B, C, D, E

Country E Country

A

Country B Country

C

Country D

Country E

Country A

Country B Country

C

Country D

Country E

Traditional MSP

MSP 2.0

T R A D I T I O N A L V S . E M E R G I N G M S P M O D E L S

Implementation Structure

• In the past, MSP deals began in one country, with others added over time. Today, multi-country deals are implemented from the get-go or over a shorter time period.

• In today’s MSP deals, countries are not discrete, independent units, but work together to provide a holistic, global view of the workforce.

35%

32%

21%

12%

Latin America

APAC

Europe

North America

M S P P R O J E C T E D G R O W T H , 2 0 1 4 - 2 0 1 9 C A G R

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