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Number of new employment agencies falls

Number of new employment agencies falls

Data revealed in the Business Demographysurvey released by the Office of National Statisticsshows that 1,465 new employment placement agencies were launched in the UK in 2011. This indicates a slight drop from the 1,730 agencies that were launched in 2010.

There was a more dramatic reduction in the number of temporary employment agencies, which fell from 2,010 in 2008 to 615 in 2011.

By comparison, the total number of new enterprises launched in the UK rose from 235,145 to 261,370, the most significant increase seen in recent years.

Richard Prime, joint-CEO of Sonovate, a business that helps recruiters start and grow their own recruitment agencies, says: “The overall message is a positive one UK business is getting back on its feet and more entrepreneurs than ever are looking to establish companies. As to why the number of new employment placement agencies has decreased, we would suggest that there are difficulties faced by entrepreneurial recruiters that do not affect other business owners. Contract finance is a long and arduous process, for example, and this may be putting some people off.”

Until 2011, the reverse of this year’s pattern could be seen in the Business Demography with the number of new recruitment agencies increasing year-on-year, and the number of new businesses in general falling annually.

But the data isn’t all negative. It also reveals that the number of recruitment businesses folding each year has decreased from 1,045 in 2009 to 975 in 2010 and 895 in 2011, suggesting that recruiters making a move into business ownership are experiencing greater long-term success.

Prime comments: “The evidence implies that many recruiters branching out on their own are realising their dreams and establishing businesses that are enduring the tough economic times. With signs that the UK economy is now in recovery, we are positive that this number will fall again in 2012, and believe that more aspiring business owners will now take a leap and start their own companies.”

He concludes: “For those recruiters that are still nervous, Sonovate is on hand to help them as they take the first steps, registering and establishing their agency and then providing the technology and support infrastructure they require to grow.”


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