Further growth forecast for recruitment agency sector

RA Now

Turnover in the recruitment industry has risen by 3.1% in the last year equating to £26.5 billion, figures show.

Further accelerated growth of 7.3% in the next 12 months, and 8.3% in 2014/15 is forecast for the sector, according to the annual Recruitment Industry Trends Survey conducted by the REC.

This would see the UK recruitment industry surpass its pre-recession peak of £27 billion by the end of March next year.The sector had been predicted to grow by 2% this year, but a 12% increase in permanent recruitment and 2% growth in temporary and contract staffing volumes have ensured the year-on-year uplift.

Temporary and contract business comprises 91% or £24.1 billion of the total market value of the recruitment sector, and £2.4 billion or 9% comes from permanent recruitment activity.

This marks the highest annual turnover for the temporary/contract market since records began, according to Kevin Green, chief executive of the REC.

“Recruiters are resilient and in difficult times have been working harder to deliver more for less to cost-conscious clients,” he added. “We’ve seen the market mature with consolidation by large and medium-sized businesses acquiring smaller operators, and the remaining small agencies have had to carve out specialist niches in order to survive.”

Green added that the expected revenues from recruitment firms’ “difficult” processes of restructuring in order to increase efficiency and improve profitability have resulted in the REC upgrading its growth forecast to 7.3%.

Headcount within the recruitment industry increased for the third year running, but the rise – of just 0.9% to 93,610 – is still below the pre-recession figure of 108,833 in 2007/2008.

The survey also found that recruiters helped 617,314 people find a permanent job – 12% more than in 2011/12 and an average of 21 successful placements per consultant working in permanent recruitment.

Within the temporary market, each consultant has 32 agency workers on assignment on any given day, within the context of the 1.1 million agency workers fulfilling temporary roles in the UK at any time.

* The survey – the 6^th published by the REC – contains historical data over ten years combined with current responses for 585 recruitment firms.