For almost a decade, the turnover of the leading personnel service providers with the recruitment, placement and management of IT freelancers grew significantly in double digits. The new figures for the 2019 financial year now show that company turnover has stagnated or even declined (-1.9 percent). This clearly missed last year’s forecast. In addition to the legal uncertainty, the deterioration of the economy in important customer industries such as the automotive industry also made itself felt in the second half of 2019. This is shown by the first results of the current Lünendonk market segment list and study 2020 “The market for recruitment, placement and management of IT freelancers in Germany”.
The leading ten personnel service providers are also expecting sales to decline in the current financial year. Due to the corona crisis, according to the top 10 companies, sales in 2020 will shrink by around three percent. “Compared to other B-to-B service markets, this is a very optimistic forecast,” Jonas Lünendonk, managing director of Lünendonk & Hossenfelder GmbH, Mindelheim, describes the current market situation. “In some cases, provider companies report a more than 30 percent decline in sales in the second quarter of 2020.”
However, the Corona crisis also led to particularly high demand for individual qualifications. For example, experts in cloud technologies were in high demand, but could not compensate for the general decline in demand. Digitization, IT modernization and cloud and IT transformation projects such as the S / 4HANA conversion make the IT freelancers and their personnel service partners optimistic about the time after the corona crisis.
With over one billion euros in sales and a clear gap, Hays is the market leader among IT personnel service providers in Germany. In second place is Gulp, a subsidiary of the personnel service provider Randstad, with a turnover of around 400 million euros. Both Hays (-1.1 percent) and Gulp (-6.3 percent) saw sales decline in the IT freelancer business. The English personnel service provider SThree is now in third place for the first time with IT freelancer sales of around 180 million euros. In fourth place is Allgeier Experts (136 million euros), the subsidiary of Allgeier SE. The top five will again be completed this year by Etengo from Mannheim with a turnover of over 130 million euros.
Ferchau GmbH, a subsidiary of the Able Group, is new in the top 12 for the first time this year. This means that the Able Group is represented by two companies, since the nine-placed top itservices also belongs to the company from Gummersbach. In addition, the Westhouse Group and Future Consulting joined forces in 2020 and will operate together under the Westhouse brand in the future. Together, the companies achieved sales of 147 million euros in 2019. This includes significant revenue shares from managed service providing. The merger will then be taken into account in the Lünendonk list 2021.
The complete Lünendonk study “Leading providers for recruitment, placement and management of IT freelancers in Germany” will be published at the end of August. It contains information on trends and developments in the market, the status of the internal digitization of providers and other key figures. The study can be pre-ordered for a fee.
- Challenges for IT personnel service providers
In the round of COMPUTERWOCHE, Sonja Pierer from Experis Germany, Attilio Berni from Harvey Nash, Kai Becker from Hays and Michael Girke from Q_PERIOR discussed. The focus was on changes in the industry in the light of the shortage of skilled workers.
- Sonja Pierer, managing director of Experis Germany
The industry must succeed in finding the right solutions for the customer – proactively. The customer usually has a three-year plan, he knows his projects. Why doesn’t he involve a personnel service provider in resource planning earlier? We have to get there with the customer, that’s my challenge. I get very far with some companies, but on a broad front and also as a personnel service provider, we are not yet where we should be.
- Attilio Berni, Director IT & Engineering Projects at Harvey Nash
The different speeds of market participants is a challenge. Customers immediately request a candidate and we send suitable profiles. If the customer is on vacation for two weeks or cannot make a decision, the freelancer is usually somewhere else. Customers work in traditional cycles, freelancers are agile. Recruiters need a very close relationship to convince their customers to go faster. One solution is clear, defined processes with clients and freelancers. This can increase the hit ratio, but unfortunately not to 100 percent.
- Kai Becker, Head of Public Services IT Contracting at Hays
The tension between tight candidates and the promise to deliver is a major challenge for the industry. Regardless of which channels you work with and how you plan resources – the scarcity does not resolve. At the same time, we have a delivery promise to our customers, especially when it comes to the quality of the candidates and the prices. The current situation presents service providers with many challenges, particularly in operational management. And I don’t think that training alone will solve the problem.
- Michael Girke, partner for Staffing Solutions at Q_PERIOR
We do not have traditional sales, with us our own consultants in particular need good and conscientious support for their projects. The availability of good experts is a problem – and so is reliability! Freelancers today often have a lot of irons in the fire. Clear commitments are becoming rarer and perceived commitments are sometimes withdrawn. The phenomenon is expanding – a mirror of our society and the increasing arbitrariness.
- Statement by Stefan Symanek, Head of Marketing at GULP
“Since the market has now changed to a candidate market, we place great value on strengthening the bond with our freelancers as part of our strategy ‘tech and touch’. We digitize where it makes sense to have more time for personal contact with the freelancers. The possibility of digital signature, more sophisticated matching technology or the electronic credit procedure are just a few examples. ”