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Industry to bounce back after turnover fall, says REC

Industry to bounce back after turnover fall, says REC
Turnover in the UKs recruitment industry fell by more than 12% in the year to March 2010, according to the annual industry report launched today (Thursday October 28) by the Recruitment and Employment Confederation (REC) in association with Barclays Corporate. However, despite the longest and deepest recession since records began, the report showed that the recruitment industry still had sales of just under 20 billion.The Recruitment Industry Trends Survey 2009/10 shows a contraction of the industry resulting in the annual turnover falling to 19.7 billion during the period April 2009 to March 2010 compared to 22.491 billion last year. Permanent placements turnover fell by 27.6% to 1.9 billion while temporary and contract turnover dropped 10.4% to 17.8 billion.The impact of the downturn on the UK recruitment industry has been less marked than in North America and in other EU states which have seen contractions of between 20 and 35% over the course of the recession. Since the survey was undertaken, the results from the monthly REC/KPMG Report on Jobs have shown continued growth in the demand for staff over the last six months. This improvement is also reflected in the results of UK listed recruiters which show that the UK market has returned to growth in the second half of 2010.
Commenting on the results, Kevin Green, the RECs Chief Executive, said:This has been a tough climate for those on the front line of the UKs fragile jobs market. However, we believe that the majority of the contraction happened in the first half of the 09/10 period. The historical data released today must be weighed against the more recent monthly jobs data which shows increasing hiring activity in many sectors.While the recession has been a difficult time, it has presented recruitment agencies and employment businesses with the opportunity to become leaner, more efficient and more focused on achieving results. They have had to innovate and differentiate themselves in a competitive market and really demonstrate their ability to understand changing client needs and add real value to UK businesses. Its this drive and level of expertise that will help to move the industry forward in the coming years.Recruitment is a resilient and entrepreneurial industry, achieving a 20 billion turnover even during the longest and deepest recession since records began. Despite the potential impact of public sector cuts we expect to see a return to growth in next years report and look forward to seeing the industry bounce back.David Roust, Head of the Recruitment Industry Team at Barclays Corporate, said:Businesses across the sector have had to be adept at managing the changing market place some have fared better than others but overall management teams have demonstrated real resilience through these toughest of times.Challenges remain, whether retaining key staff, preparing for regulatory changes or targeting new and different geographies or sectors and on top of all this, understanding and dealing with the impact of the Comprehensive Spending Review.However, this sector is full of entrepreneurial spirit and one which has a role to play in providing a flexible workforce and helping people get back to work - another challenging year awaits.

Permanent recruitment volumes were again hardest hit plummeting 25 per cent over the year from 582,803 to 436,822.

There was also a sharp drop in the number of temporary / contract workers who were down 17.7% from 1,068,197 to 879,302. The survey states that demand for temporary staff has tended to focus in areas where skills are often less widely available pushing up employment costs as a result.

Also reported was a downturn is the number of people working in recruitment which is now at 80,528 compared to 95,865 last year. These job losses comprise 6,000 permanent consultants plus 7,187 administration and management positions.

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