Searching for silver linings in Europe

As an optimist, I’m always searching for silver linings. And despite the persistent talk of an imminent recession that has dominated the past year, Europe’s economy keeps delivering.

?In some places, there are signs that economic downturns might turn into minor dips. In others, data suggest that the worst might already be behind us. Across the continent, labour markets remain stubbornly strong. And in several of the industries we serve, such as life sciences, companies are keeping up an aggressive pace of dealmaking, demonstrating remarkable resilience in the face of a wildly unpredictable economy.

?As a single source for comprehensive workforce solutions, AgileOne is positioned to help companies succeed in any economy. That is why we are pleased to present Workforce Solutions Market Overview: March 2023 Edition. This report combines the latest economic data and insights from around the world with leading solutions to help companies navigate the ups, downs, and in-betweens of today’s complex, changing marketplace. ?

I’ve summarized a few highlights from the report below, including data that should give employers reasons to keep their heads held high:

?●?????From where I sit in the Netherlands, the tight labor market is expected to ease in 2023 as the demand for workers softens. Economists at the European Commission expect the unemployment rate to settle around 4.3 percent in 2023 and 2024 — a small uptick but still indicative of a strong job market. As a result, nominal wage growth is expected to continue its upward trajectory in 2023, which means Dutch companies would be wise to target cost-effective solutions, including leveraging the power of contingent workers, for managing their workforces.

?●?????In Germany, the labor force is still coming up short of the nearly 800,000 people needed to fill all of its job vacancies. However, there is renewed hope that an influx of immigrants might help fill some of the gaps in the labour market. Among all countries, Germany has recorded the third largest number of refugees fleeing Ukraine — more than 1 million people since the war began — and its government has already taken steps to attract foreign talent by improving access to dual citizenship and apprenticeships. The private sector has also stepped up, with more than 36 major companies, including automotive suppliers and industrial firms, announcing that they will begin coordinating on redundancies and vacancies.

?●?????In the UK, the number of job vacancies has been hovering near record highs since 2021, when the number of unemployed people per vacancy reached levels not seen in at least 40 years. Although recent data indicates that Britain’s labour market may finally be cooling off, the UK still recorded more than one million vacancies at the end of 2022, representing a strong show of faith on the part of UK employers in the country’s economy. Meanwhile, in Ireland, the economy is performing better than in most other European nations, with Modified Domestic Demand (MDD) — a reliable measure of domestic economic activity — projected to grow by 8.4 percent at the end of 2022. Riding the strength of the broader economy, the unemployment rate in Ireland also dipped to pre-pandemic levels, ending the year at 4.3 percent.

?●?????Despite having characteristically high unemployment relative to most nations in the European Union, France’s economy has shown remarkable resilience in recent years. Since it began rebounding in 2021, employment has ticked up quarter after quarter, reaching levels 3.6 percent higher than at the end of 2019, according to the most recent labour data. The economy is projected to record continued employment growth in 2023 across all sectors. Meanwhile, GDP is expected to settle near 2.6 percent growth for the year, putting the country on track with the projected average for all EU nations. Even though France likely won’t be able to entirely avoid a rightsizing in its economy, employers should keep up a healthy pace of hiring for the foreseeable future.

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●?????Amid the fog of uncertainty in Eastern Europe, employers have been reluctant to lay off workers as they focus on filling gaps in the supply chain. Consequently, employment is projected to remain steady in 2023 and 2024, which will continue to drive a tight labour market. Some relief may come with an influx of refugees flowing from Ukraine; Eastern European countries have collectively resettled more than two million refugees since the start of the war.

?In rapidly changing times, AgileOne is at your side. We are the one workforce solutions provider to offer comprehensive solutions leveraging the best of the best, combined with our technology expertise, consulting services, and exceptional delivery teams to meet all your talent attraction and management needs. Here are five solutions we’re recommending for companies of any size or scope to navigate today’s evolving labour market:

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1. Hire flexibly with contingent labour. In times of transition, contingent labour provides companies with the flexibility to adjust to reduced demand during economic contractions while allowing them to quickly scale up during recovery.
2. Streamline with total talent solutions. AgileOne's total talent management solutions offer a strategic approach to managing all categories of workers with a singular model supportive of an organization's workforce fulfilment needs. This allows companies to streamline their operations and weather any conditions.
3. Diversify your workforce. Employers who hire non-traditional candidates — or "hidden workers" — benefit from a larger and more diverse talent pool. Furthermore, women and minorities in leadership positions have been shown to outperform their peers on profitability, strengthening the business case.
4. Build the ultimate worker pipeline. By leveraging talent communities — or groups of interested candidates who are not yet ready to commit — companies can focus on building a pipeline of quality workers until the right time for both parties.
5. Double down on culture. In an era of historic labour market tightness, companies that prioritize a human-centred approach will be in a stronger position to retain employees. Proven strategies that improve company culture include embracing flexible working arrangements and supporting opportunities for learning and career advancement.

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Download AgileOne’s Workforce Solutions Market Overview, March 2023 Edition here.