You have conquered your home market. You have examined sectors that you might want to expand into, but feel you can achieve your next jump in profits by expanding abroad. So where should you go?

Staffing Industry Analysts has developed a methodology for evaluating the potential of each staffing market. This provides a basic structure for understanding different strengths and weaknesses and a template for comparing a wide range of very different markets. Staffing markets are ranked according to 10 different components:

  1. Market Size. We’ve measured and compared the size of the staffing markets according to 2015 revenue.
  2. Protection of Permanent Employees. Based on the OECD Employment Protection Index adapted by Staffing Industry Analysts, this item focuses on the level of protection from dismissal for permanent workers because strong protection acts as one of the main drivers of demand in many markets.
  3. Regulations on Temporary Agency Work. Based on the OECD Employment Protection Index as well, this indicator looks at legislation as it pertains to temporary and contract staffing, including prohibitions, restrictions and limitations.
  4. Ease of Doing Business. Based on data from the International Finance Corporation “Ease of Doing Business Rankings”, which assesses factors such as how easy it is to start a business, register property, get credit, protect investors, pay taxes, enforce contracts, and trade across borders.
  5. Economic Growth. International Monetary Fund GDP forecasts from 2016 up to 2020.
  6. Short-Term Growth. Based on Staffing Industry Analysts’ market growth forecasts for 2016.
  7. Long-Term Growth. Based on CIETT 2013 estimated staffing market penetration rates (temporary agency workers as a proportion of the total workforce) supplemented by Staffing Industry Analysts’ estimates for certain markets.
  8. Market Competition. Staffing Industry Analysts’ assessment of the level of competition within each staffing market based on market consolidation and the number of staffing companies operating within each staffing market as a proportion of the wider population.
  9. Political Stability. Based on World Bank Governance Indicators, 2015, which looks at factors such as: Is the government stable? Is there an absence of violence? Is there good regulatory quality and is corruption controlled?
  10. Higher Education and Training. Based on the World Economic Forum’s 2015-2016 Global Competitiveness Index, specifically indicators about higher education availability and quality, as well as the availability and quality of training schemes for workers.

Top of the Heap: Ireland, Sweden

Having analysed each market according to these 10 criteria, we have scored each component and then calculated the total for each market.

Ireland topped our ranking of the Most Attractive Staffing Markets for the second year in a row. This market scored well across all the factors we measured, especially regarding regulations on temporary agency work and ease of doing business. Ireland is a business- friendly economy and the main European base to a high number of Fortune 100 companies.

The country has a relatively liberal staffing market with one of the lowest levels of regulatory burden on temporary agency work in Europe after the United Kingdom, the Netherlands and Sweden.

However, the relatively low level of competition is probably the single factor that makes Ireland stand apart from the rest of the countries featured in the upper half of our ranking. Ireland is a relatively fragmented staffing market with the top three firms responsible for just 30% of sales. In fact, only the market leader, CPL Resources, owns more than 10% of market share.

Next is Sweden, which scores very highly for market growth this year. We predict a 13% increase in revenue and the country also has very positive longer-term growth potential. It scores highly for the ease of doing business and has a benign legislation regime. Denmark, which is the third-most attractive market by our calculation, is also predicted to grow well both in the short and long term. It also has a higher score for ease of doing business than Sweden but is a much smaller market.

Shared Traits

Overall, the top-tier markets display some common traits: By and large, political stability is high, and the higher education and training systems are some of the best in the world. Additionally, the environment is mostly business friendly (with the notable exceptions of Belgium and Chile) and the regulatory burden on temporary agency work is mostly light (exceptions are Lithuania, Hong Kong, Singapore and Spain).

In the Asia-Pacific region, South Korea (6th), Malaysia (tied for 7th) and Australia (tied for 11th) are the most attractive. However, the highest-scoring Latin American nation — Chile — is only in 20th place. In general South American markets are relatively nascent. Therefore, the number of staffing firms operating there is still relatively low compared to more mature markets.

At the other end of the scale, the least attractive markets, by our calculation, are Brazil, Venezuela and Nigeria, in that order. The two Latin American commodity-dependent countries have in fact dragged down the entire region, offsetting a positive performance in Mexico, according to World Bank. However, “least attractive” should not be misconstrued as “unattractive”. All staffing markets have potential if you have the right services/products, the right price, the right sales/marketing strategy and the right personnel.

For corporate members, the Excel-based Market Attractiveness Assessment Tool (MAAT), which is available with this report, makes the analysis more sophisticated and directly relevant by weighting the scores.