Market Overview

Size of the three major HR business category market (temporary staffing, recruitment for white-collar-jobs, and outplacement) for FY2023 grew by 6.3% from the preceding fiscal year to 9,715,600 million yen, based on the sales at businesses. In detail, the temporary staffing market grew to 9,280,000 million yen (up by 5.9% from the previous fiscal year), the recruitment market for white-collar jobs rose to 411,000 million yen (up by 17.1% on the same basis), and the outplacement market attained 24,600 million yen (up by 0.4% on the same basis).

A growing sense of manpower shortages is underpinned by the stable growth of the temporary staffing market, with a demand growing particularly for IT engineers. Meanwhile, some temporary staffing companies saw a sales decrease, stemming from the decline in the number of purchase orders regarding staffing for COVID-related operations at user companies.
The recruitment market for white-collar jobs grew consistently, driven by increasing demand for IT engineers and experienced workers. While the recovery from the COVID years was slower than in the previous fiscal year, it did not significantly affect the overall market size.
While the reclassification of COVID-19 to Class 5 infectious disease encouraged society to return to normal, companies hesitated to make significant personnel cuts due to a growing sense of manpower shortage nationwide. As a result, the outplacement market experienced only a slight increase in demand.

Noteworthy Topics

Utilization of Digital Technologies in HR Business

In recent years, the market has witnessed various examples of companies entering the human resources business market offering new services incorporating functions enabled by digital technologies like generative AI. They provide services such as an AI-powered resume generator and an AI-powered job search engine that make recommendations for job seekers and persons registered as temporary staffs.

The adoption of digital technology gives human resource companies a new competitive advantage in a market where differentiation is challenging. As a result, businesses are anticipated to further develop services that leverage digital technology.
On the other hand, the use of AI and other technologies may involve the use of personal information of job seekers and temporary staff, which poses a significant information security risk if not handled appropriately. Due to such concerns, some service providers are still wavering on using digital technologies.

Future Outlook

For FY2024, the combined market size of the three major HR business categories (temporary staffing, white-collar recruitment, and outplacement) is expected to grow by 5.6% from the previous fiscal year, reaching 10,260,200 million yen, based on the sales at businesses. Driven by the ongoing labor shortage, temporary staffing and white-collar recruitment will continue to propel the market past the ten trillion yen mark.

Research Outline