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Optimism returning as recruiters see 2021 as year of opportunity

A new survey by Gambit Corporate Finance LLP highlights growing positivity in the Human Capital sector, with most respondents expecting activity to return to pre-pandemic levels by the end of 2021.

Respondents, who consisted of C-Level Executives from businesses with a turnover range of between £1m and £700m, provided representative viewpoints from across the sector. Key findings include the following:

  • Nearly two thirds of participants were positive about the next 12-18 months, citing buoyant demand in Covid-19 resilient sub-sectors, capital availability and an ability to service the UK’s significant, impending, retooling and reskilling initiatives.

  • 70% of respondents indicated a moderate or negligible impact of the pandemic on their business, reinforcing the level of confidence that exists around the sector’s Covid-19 resilience, which Gambit note has also served to maintain M&A market activity.

  • Just a quarter of respondents indicated that they had utilised loan schemes such as CBILS and 75% of those reporting a severe Covid-19 impact had not yet accessed the scheme with the recent extension of CBILS to January 2021 offering a renewed window of opportunity to obtain potentially vital support.

  • Growth initiatives were most chosen as a strategic priority within the next 12 months, including overseas expansion, increasing headcount and, mainly, undertaking strategic M&A, indicating strong optimism about short to medium term market prospects.

Respondents with turnover of £1m-60m were most likely to express a desire to undertake M&A activity in the next few months, indicating clear appetite in the mid-market to undertake a transaction as businesses become less risk averse having evidenced an ability to navigate pandemic related uncertainty.

Despite featuring as the most commonly cited strategic priority, nearly one in two respondents referred to the achievement of organic growth as being a challenge in the next 12-18 months, positioning the M&A market as an effective means to achieve strategic ambitions.

Commenting on the findings, Geraint Rowe, Partner at Gambit said: “In a highly challenging year for Human Capital companies, our findings are a clear endorsement of the sector’s ability to adjust and adapt to the challenging economic conditions. The level of optimism as we head into a crucial few months bodes well from both a sectoral and macroeconomic perspective, with respondents targeting 2021 as a year of great promise and opportunity.”

Simon Marsden, Director at Gambit added: “The positivity indicated by respondents corresponds with the robust level of appetite for Human Capital companies, as reflected in Gambit’s latest M&A market data. Our findings echo and reinforce the positive sentiment that surrounds the sector following its successful navigation of one of the most challenging economic periods on record.”

You can read the full Gambit Corporate Finance survey report here.

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