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Recruitment agency industry slump would have happened anyway

Recruitment agency industry slump would have happened anyway PeoplePerHour.com

Contraction of recruitment agency industry down 17 percent since 2008 has roots in long term drivers such as moving to hiring online and short term flexible contracts, according to new in-depth report by PeoplePerHour.com.

PeoplePerHour.com today unveiled findings from its latest Small Business Review: the second of a series of reports based on an ongoing survey of its 48,000 members and individual responses from 530 small businesses.

In 2008, job placements through jobsites (including job boards and classifieds) surpassed those made through recruitment agencies, which were hard-hit by the recession and the resulting 43 percent rise in unemployment. According to PeoplePerHour.coms research, in 2011 the number of jobs placed online will overtake the number placed by agencies even when compared to the pre-recession boom years.

This finding supports PeoplePerHour.com founder Xenios Thrasyvoulous belief that the demise of traditional recruitment agencies market share has more to do with a long-term trend towards online recruitment, rather than simply the impact of the recession.

The recession has acted as a catalyst for the contraction of the recruitment market, he says. However, there are longer-term drivers at play that were brewing long before the recession, including the growing small business trend for virtual working.

One of the more surprising statistics to emerge from PeoplePerHour.coms report was that only one in four small business respondents to the survey claiming to that the recession had a drastic impact on them. Despite this, the vast majority of respondents 81 percent reported being reluctant to employ staff, even if their business was growing, preferring instead to make short term hires and outsource to freelancers.

Small businesses employ 58 percent of the UK private workforce, says Thrasyvoulou. With increasing numbers of small businesses choosing freelancers over permanent staff, its inevitable that the traditional recruitment agencies market share will continue to shrink.

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