No.2541
10/15/2020

Human Resources Business Market in Japan: Key Research Findings 2020

Yano Research Institute (the President, Takashi Mizukoshi) carried out a survey on the domestic human resources business market and has found out the trends by service category, the trends of market players, and the future outlook.


Transition of Market Size of Three Major Categories within HR Business
Transition of Market Size of Three Major Categories within HR Business

Market Overview

The major three categories of human resources (HR) business market (i.e., the services of temporary staffing, recruitment, and re-employment or outplacement support) in FY2019 grew by 4.5% on a year-to-year basis to have attained 7,012,800 million yen based on the sales at the service providers. All the categories in the HR business market increased: Temporary staffing attained 6,680,000 million yen (up by 4.7% on a Y-to-Y basis), Recruitment generated 308,000 million yen (up by 1.7% on the same basis), and Re-employment or outplacement support reached 24,800 million yen (up by 3.3% on the same basis).

In the temporary staffing market, demand for general workers, the major market element, has maintained the stable growth due to the backdrop of decreasing working population and the Work Style Reform. Meanwhile, the number of IT engineers and long-term care workers has not been enough to supply, though they are highly in demand.

For the past several years, the recruitment market had recorded double-digit growth, but it started slowing down in the latter half of this fiscal year to end up with marginal growth, as the economy began showing unstableness for the future, leading some companies to hesitate recruiting employees.

The re-employment or outplacement support market has been on the decline in recent years, as it tends to shrink during the prospering economy. However, the market size expanded, as companies started welcoming voluntary retirement and those employees retiring early, and began increasing the measures to encourage the employees developing their own careers autonomously, by which to improve age structure of the entire company.

Noteworthy Topics

Influence of COVID-19 Pandemic

The negative impact of the COVID-19 pandemic is represented by the decreases in the number of vacant jobs, of staff actually working, and in the successful cases of recruitment at the deteriorated industries.

Among the clients of human resources business, those that showed great reduction were the retailers such as commercial facilities and food services operators, the manufacturers including automobile-related manufacturers, and the service providers such as in tourism and accommodation. More companies began showing reluctance in adopting non-urgently needed human resources such as unexperienced or young workers. The negative impact became gradually obvious at human resources businesses since around March 2020 and peaked during April and May when a state of emergency was announced. Although the business conditions somewhat recovered after June, many of the service providers have felt that they have not yet recovered to reach the level before the pandemic. Some delays were observed for new projects and services at some service providers, because of unstable future without any prospect on until when these deteriorated conditions continue.

On the other hand, the positive impact by the COVID-19 infections was the expanded demand for the workers at medical, long-term-care, food factories, and distribution industries. Also, high-class human resources and skilled IT personnel have been constantly robustly demanded at every industry, which led to little influence in the HR services.

Also, the COVID-19 pandemic has caused significant changes in sales structure at some service providers, though the advantages and disadvantages differ by every business. Business negotiations and interviews that used to be carried out face-to-face have become online through digital tools. Many companies have introduced the systems that allow employees to work at home or to work from remote locations.

Future Outlook

The major three categories of human resources (HR) business market (i.e., the services of temporary staffing, recruitment, and re-employment or outplacement support in FY2020 is expected to decline by 7.2% on a year-to-year basis to be 6,509,800 million yen based on the sales at the service providers.

Affected by sluggish economic activities and delayed business development due to the COVID-19 pandemic, decline cannot be avoided in the temporary staffing and recruitment business. On the other hand, re-employment or outplacement support business is expected to expand, as companies start welcoming those employees retiring early and voluntarily leaving the company.

Research Outline

1.Research Period: June to September 2020
2.Research Object: Agencies and companies in temporary staffing service providers (mainly for office works), recruiting firms that handle white-collar-jobs and office works, and outplacement agencies
3.Research Methogology: Face-to-face interviews, mailed questionnaire, and literature research

The Human Resources Business Market

Human resources business or services in this research consists of the following three categories: 1) Temporary staffing (for general workers or general employees); 2) Recruitment (or employment); and 3) Re-employment or outplacement support.

<Products and Services in the Market>

Temporary staffing (for general workers or general employees), Recruitment (or employment), and Re-employment or outplacement support

Published Report

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