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UK recruitment market to surpass pre-recession peak by end of 2013/14

Total recruitment industry turnover reached &pound26.5 billion in 2012/13, according to the REC’s latest annual Recruitment Industry Trends Survey, published today.

The report indicated a growth of 3.1% since 2011/12. Looking ahead, it forecasts accelerating growth for the industry of 7.3% in 2013/14, 8.3% in 2014/15 and 9.6% in 2015/16. This would see the UK recruitment industry surpass its pre-recession peak of &pound27 billion and achieve a turnover of &pound28.5 billion by the end of March next year.

The 2012/13 market value of &pound26.5 billion is comprised of &pound24.1 billion (91%) from temporary/contract business and &pound2.4 billion (9%) from permanent recruitment activity. The year-on-year increase in revenue exceeds the 2% growth predicted. This has been achieved via a 12% increase in permanent recruitment volumes and a 2% increase in temporary and contract staffing volumes.

Other key findings from the Recruitment Industry Trends Survey 2012/13 include:

•             Recruiters helped 617,314 people find a new, permanent job. That’s 66,866 (or 12%) more than in 2011/12 and an average of 21 people successfully placed by each consultant working in permanent recruitment.

•             There are 1.1million agency workers fulfilling temporary roles in workplaces across the UK at any time, about 4% of the total workforce. On average, each consultant working in temp/contract staffing had 32 people on assignment on any given day.

•             Headcount within the recruitment industry increased by just 0.9% to 93,610. This marks the third consecutive annual increase in the number of people working in the recruitment industry, but the new total is still below the pre-recession figure of 108,833 in 2007/08.

•             A shortage of candidates with appropriate levels of skills and experience is the concern most frequently reported by agencies working in permanent recruitment, with a quarter of recruiters (25%) saying it is an issue.

•             Narrowing fees percentages is the concern cited most frequently by agencies supplying temporary staff, with 17% of agencies listing it as a concern.

Commenting on the report, REC chief executive Kevin Green, said, “The year to April 2013 saw growth for both temporary and permanent recruitment, with the temporary/contract market achieving its highest annual turnover since records began.

“Recruiters are resilient and in difficult times have been working harder to deliver more for less, to cost-conscious clients. 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.

“As the recovery gathers pace, the difficult restructures that firms have put themselves through, including significant numbers of branch closures, could begin to deliver impressive dividends. As revenue grows, efficiencies will deliver margin improvements and increased profit. This is why we have upgraded our growth forecast to 7.3% by the end of this year and are predicting even greater acceleration in the following two years.”

Recruitment Industry Trends Survey 2012/13 is the sixth annual industry assessment of its kind published by the REC and contains historical data going back over a decade. The latest information was drawn from the survey responses of 585 recruitment firms. The report is available online at www.rec.uk.com/trends and is free to download for all REC members.

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