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1 in 10 agencies record loss for second year running

A new report looking into the profitability of the UK Recruitment Agencies market has found just under one in ten companies have recorded a loss for the second consecutive year.

 

The report – carried out by market analysts Plimsoll Publishing – states 170 of the UK’s largest recruitment agencies companies made a second consecutive loss as average profit margins in the industry are at 3%.

 

Of the 2108 companies analysed, further findings reveal:

 

  • 488 firms recorded a loss
  • 170 companies have made loss for the second consecutive year
  • 125 of the businesses that made a loss increased sales
  • 284 companies have been rated as danger

 

David Pattison, senior analyst on the project, said, “Profitability is key to a company’s success. The difficulty for any business working in a very competitive market is to make a good profit.”

 

He added: “It would appear the pressure in the market is having an impact on the ability of some companies to make a profit. It is of course down to the individual company as to how much profit can be realistically made, but the consequences of not delivering a profit at first glance would seem apparent: 284 are firms are now rated as now being at high financial risk.

 

“For the companies that are falling behind, they need to re-evaluate their strategy and retain profit in order to improve their financial strength. Further to that, however, it appears there is some cause for optimism as the report showcases 1045 firms as “exceptional” performers.  These firms, despite the pressure in the market, have recorded record profits and sales increases. The report uses these as example companies of the success that can be achieved even in a saturated market place.”

 

Image courtesy of Pixabay

 

 

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