Summary of Research Findings

The employment services & HR outsourcing business market size (as a total of 8 markets) is forecasted to reach 19,317,300 Million Yen by 2030, exhibiting a compound annual growth rate (CAGR) of 3.34% from FY2022.

Decrease of working population* as a result of the aging of Japanese society coupled with a declining birthrate, is a most impactful factor that is affecting the employment services & HR outsourcing business market. (*Source: Statistics Bureau of Japan, Ministry of Internal Affairs and Communications, "Labor Force Survey")

For the employment services (temporary staffing, recruitment service, job information service, job matching service, and direct sourcing service), the decrease of working population may lead to business shrinkage, as they will fall short of workers to ‘match’ with client corporations. For HR outsourcing businesses (BPO service, call center business, corporate training service), the decrease of employees at client companies may affect the work volume to be consigned. In some cases, the work may dwindle.

Looking at the decline of the working-age population from another perspective, it can boost the demand for the employment services, as shortages of human resources worsens across industries. Similarly, it may increase the number of client companies for HR outsourcing businesses, as companies with personnel shortage issues need to outsource operations that they can no longer handle inhouse.

Considering these circumstances, the decline of working population will presumably leave a huge impact on both employment services and HR outsourcing businesses, in one way or the other. However, we believe that it will work in favor of the industry more than against it for 2030, with the growing demand for human resources and outsourcing surpassing the negative influence of a shrinkage of a total number of jobseekers, or a decrease of outsourcing tasks.  

Noteworthy Topics

Impact of Evolution of Digital Technology on Market Growth

In addition to the declining working population, evolution of digital technology is also affecting the employment services and HR outsourcing businesses considerably.

In the market of employment services (temporary staffing, recruitment service, job information service, job matching service, and direct sourcing service), digital tools and AI technologies may replace their jobs. For HR outsourcing businesses (BPO service, call center business, corporate training service), it may lead to a decline in sales as business process automation enabled by digitization can diminish the needs for outsourcing tasks to be done by human.

Meanwhile, in the employment services market, advancement of technology would rather boost the demand for professionals with IT capabilities such as data scientist. For the HR outsourcing market, the demand for improving customer experience (CX) coupled with the advancement of digitization may open up a new opportunity for new offers, such as data analytics based on accumulated customer data.

There is no denying that technology may replace human in some of current jobs that are outsourced. Still, we believe the evolution of digital technology may have positive influence by far to the employment services and HR outsourcing businesses by accelerating reallocation of human resources at client companies and increasing the demand for IT professionals.

Research Outline