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Key takeaways

The employment services market comprises businesses which cover the full spectrum of HR services. Key activities are (temporary) staffing, recruitment, secondment, payrolling and contract management. We have segmented the market into: (i) employment services, (ii) temporary employment services and (iii) staffing & secondment


Employment agencies differentiate in sector focus and service offering. The sector distinction is between agnostics and specialists. The service distinction lies between agencies with one employment service pure-play and integrated one-stop-shops. We see two interesting targets along these lines. One is agencies leveraging a pool of technical workers in the current supply-demand market disbalance are the most interesting targets. The other is one-stop-shops capitalising on the full-service partnership trend.


The key market trend is the rising popularity of flexible contracts. This is becoming so widespread that governments are intervening in the form of abolishing sectoral remuneration and the WAB. The follow-up regulation aimed to disincentivise the use of temporary personnel by increasing the per-contract costs will further squeeze margins


Investor appetite is driven by the easy-to-comprehend business model and high cash generation. The multiple arbitrage potential of integrating multiple agencies provides another exit opportunity push. We however would advise investors to inspect the level of low-qualification jobs – which actually has been the focus point of employment services over the last decades – before investing in a specific vertical. Reason is that the increasing level of automation could dissipate long-term demand

Company benchmarking

Market growth

SIA (May 2021) estimated that the Dutch staffing market generated ~€18.9bn (-9% YoY) while the Belgian market generated ~€5.4bn in revenue in 2020 (-16% YoY)

The Dutch staffing market is expected to show a ~8% YoY growth in 2021, followed by ~5% YoY growth in 2022. The Belgian market is expected to show ~15% and ~12% YoY growth in 2021 and 2022, respectively (SIA, May 2021)

Local executives expect the Benelux employment services market to grow ~5-10% YoY over the next five years (interviews by Gain.pro). A local CFO foresees ~3-4% YoY growth in payrolling (interview by Gain.pro)

Positive drivers

Growing employment supply-demand gap drives demand for employment services wherein the shortage-driven increased pricing power allows for higher per-employee margins (interviews by Gain.pro)

Innovative growth opportunities in the form of platformisation (e.g. digital-only employment platforms) and HR technology (e.g. e-HRM software) leading to more efficient matching and bottom-line improvements (interviews by Gain.pro). A case in point is House of HR's Nowjobs app recording ~417% YoY growth in 2018 (Made in West-Vlaanderen, September 2019)

Upsell and lock-in potential for one-stop-shops, with end-clients increasingly opting for full-service partners (interviews by Gain.pro)

Negative drivers

Shortage of talent could squeeze out smaller agencies especially now that investments in internal training courses are becoming necessary to lock in talent. Businesses need to shift “from talent traders to talent developers” (interview by Gain.pro), which only the larger-size assets can do

New Dutch regulations to improve temporary worker security (ABN AMRO, March 2021), such as increasing the per-employee staffing costs and shortening temporary contracts from 78 weeks to 52 weeks (Flexmarkt, September 2021), could hurt demand (interviews by Gain.pro)

Industrial automation decreasing the number of blue-collar jobs, which are exactly the (low-qualification) positions employment services providers make most of their money from (ABN AMRO, March 2021)

Read the full report on Gain.pro

Employment Services industry industry.

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