Introduction

Due to the pressure for increased change, today’s external labour markets are described as moving towards greater flexibility and limited predictability, while internal labour markets in organisations are changing in the direction of increased insecurity, instability and non-standard employment agreements (Bonet et al., 2013; Kazis, 1998; Osterman, 2010). For organisations to cope with the growing needs of flexibility, human resource (HR) activities have become increasingly important, both at the operative and strategic levels (Boxall and Purcell, 2011). However, many organisations lack the resources and skills to handle these HR activities. This applies particularly to small and medium-sized enterprises (SMEs) (Cardon and Stevens, 2004; Klaas, 2003). An increasingly popular answer to how organisations with scarce resources can handle their HR activities is outsourcing (Reichel and Lazarova, 2013; Sheehan and Cooper, 2011), i.e. to employ an external party to carry out all, or parts of, the work instead of utilising internal resources (Sparrow et al., 2010). Consequently, a growing number of organisations are turning to a new actor in this emerging market for outsourcing of support services, the so-called labour market intermediary (Bonet et al., 2013; Nesheim and Rørvik, 2013). These intermediaries include organisations (private, public, ownership-based, member-based) that operate in the gap between employers and employees (Autor, 2009; Benner et al., 2007). Labour market intermediaries have also been described as important from a regional development perspective since they have the capacity to increase the flexibility of labour markets (Benner, 2003) as well as to support knowledge transfer between organisations within a region (Smedlund, 2006). In this paper, a specific kind of labour market intermediary, the HR intermediary (HRI), is discussed. An HRI acts as a third party between employers and employees, or between organisations, with the purpose of delivering HR services, e.g. recruitment, training, competence development, career assistance, and outplacement (Kock et al., 2012). HRIs are typically profit-driven private companies that specialise in a selection of HR services. For example, they can be traditional recruitment and staffing agencies or so-called professional employer organisations (PEOs) that enter into co-employment relationships and become the employer of record for those working at the client’s company (Klaas, 2003). However, in the paper, the focus is on HRIs that are owned by their clients, and that not only aim to target single clients, but also have ambitions to contribute to a regional development of the labour market, not least due to the fact that both owners and customers are dispersed across a certain region in Sweden. These HRIs can also be classified as advanced because they have moved up the HR value chain, from exclusively working with staffing towards targeting the entire HR flow (see Sparrow et al., 2010; Wallo et al., 2016). The membership approach and the focus on the entire HR flow differentiates the studied HRIs from other types of intermediaries, such as PEOs. A central group of clients for the HRIs in this study is SMEs, which are considered important in terms of employment and economic development, at the local, regional and national levels (Muller et al., 2016; OECD, 2005), but often have limited resources for working with HR activities (Delmotte and Sels, 2008).