Market Overview

Size of the direct sourcing services market for FY2023 was valued at 107,400 million yen, up 23.2% from the previous fiscal year, based on the sales at businesses.
As competition for hiring workers is intensifying in recent years against a backdrop of labor shortage, direct sourcing services is gaining ground for acquiring talents in recent years, as an alternative method to traditional human resource services like job information services and recruitment services.

Companies using such services (companies looking for talents) are increasing steadily by reason of lower cost compared to job placement services that involve agents for finding candidates, and of simpler process compared to job information services and event-type services to make direct contact with candidates with expertise and skills suited to job requirements.

On the other hand, the number of individuals (job seekers) using the services are also increasing. Job seekers value efficiency of the services, where they are only required to create their profiles on the platform to find jobs. They also find the services attractive, as the services may find established companies that they could not have reached on their own. They also feel at ease as job interviews will be with companies that have shown interest in their resume.

Associated with the increase in the number of employing companies and job seekers using such services, the 'matches' on direct sourcing platform is rising, and thereby the market is expanding.

Noteworthy Topics

AI Utilization Accelerated

From FY 2023, the cases of direct sourcing services enhancing the usability of their platforms for user companies and job seekers that use digital technologies including AI have increased. Use cases of AI, mainly GPT and machine learning designed for tasks related to natural language processing, are witnessed at direct sourcing businesses both in their engagement with job seekers and with companies looking for talents.

For instance, they provide AI apps for job seekers that automatically generates job seekers’ resume or refines their resume. For user companies looking for talents, there are apps that help them create job offers and requirements, as well as AI-powered search engine that "recommends" candidates with skills and expertise that may meet to their needs. With further enhancements stemming from the advancements in digital technology, significance of direct sourcing services is expected to rise hereafter.

Future Outlook

Size of the direct sourcing service market for FY2024 is forecasted to rise by 18.7% from the previous fiscal year to 127,500 million yen, based on the sales at businesses.

Associated with the intense competition for hiring new graduates and mid-career professionals stemming from persistent labor shortages, the demand for direct sourcing services is expected to expand hereafter. Meanwhile, business expansion of existing companies and new companies making market entries will enable the increase in the number of companies using direct sourcing services.

In the last couple of months, a rise of demand for direct sourcing services are observed among SMEs, public agencies, and local governments in regional areas where such services had not been available. We believe the direct sourcing service market will continue to grow along with the expansion of corporate customer base.

Research Outline