Personnel service provider in the red for the third year
The economic slowdown is weighing on the temporary and permanent staffing market. The majority of personnel service providers are therefore drawing a negative balance for the first half of the year. The increased economic uncertainty in particular is weighing on investments and the labor market.
For the third year in a row, personnel service providers closed the first half of the year in the red. The number of hours worked by temporary staff fell by 8.8% in the first half of the year. The permanent placement market slumped by 22.8 percent compared to the previous year. Compared to previous years, the downward trend has accelerated in both submarkets. This is shown by the current Swiss Staffingindex.
Strongest consolidation phase in decades
The Swiss economy is growing more slowly than the long-term average. The export industry is particularly affected. US President Donald Trump's tariff policy is clouding growth prospects. As a result, export-oriented companies are holding back on investments and new hires. With a market share of around 28%, the temporary staffing industry is heavily dependent on the development of this sector. Oliver Rechsteiner, CEO of Universal-Job AG, states: "The temporary and permanent staffing market is in the strongest consolidation phase for decades. Employment agencies are becoming increasingly cautious and selective. In many cases, you can only convince them with top profiles." The Global Economic Policy Uncertainty Index from Stanford and Northwestern University measures policy-related economic uncertainty based on media coverage and confirms the uncertainty observed by Rechsteiner: in the second quarter of 2025, the index reached a historic high since measurements began in 1997.
Innovation in response to market downturns
The difficult market phase requires recruitment agencies to innovate. The use of artificial intelligence, the streamlining of processes and new approaches to recruitment and sales are helping personnel service providers to survive in a shrinking market. Rechsteiner: "With artificial intelligence, personnel service providers can completely rethink processes. This leads to speed and quality advantages." The focus on innovation is not only key in terms of competition with other personnel service providers. The internal HR departments of many companies are also modernizing. Temporary staffing companies must continue to deepen their specialization in order to maintain a competitive edge over their customers. The combination of necessary investments and the simultaneous decline in the market presents personnel service providers with a difficult challenge. At the same time, new technologies offer a good basis for successfully introducing innovations.
Outlook for the financial year
The outlook for the future remains cautious. The growth prospects for the current and coming year were recently revised downwards by the State Secretariat for Economic Affairs. This means that the cooling trend is likely to continue. One ray of hope is the domestic economy. Rising demand for housing and the latest interest rate cut by the Swiss National Bank suggest that construction activity will increase. With a market share of 21%, the construction sector is the second most important sales market for the temporary staffing industry. Positive impetus from this sector is unlikely to turn the market trend positive in the current year, but it will slow down the downturn.
Source: www.swissstaffing.ch
