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UK – Recruitment sector records third year of growth

06 July 2015

The UK recruitment sector, a key indicator of the UK’s broader economic health, has shown a third year of strong performance, according to new research from business advisory firm Deloitte and the Association of Professional Staffing Companies (APSCo). 

Over 80% of firms in 2015 reported an increase in net fee income, with average weighted growth of 12%. Almost a third of respondents (30%) plan to open more offices in the next year.

The report, which surveyed over 200 recruitment firms, also paints the picture of a sector that is continuing to professionalise. Nearly all respondents (98%) stated that the training and development of staff was an important factor in securing future growth – ahead of the use of new technology and increasing branch networks.

Ann Swain, chief executive of APSCo commented: “The UK recruitment sector is a £30 billion market and it is very encouraging to see that growth has not only been sustained, but has also increased since our last report. This can only bode well for the overall economic landscape.”

“The results also underline the importance of the private recruitment sector to the UK’s flexible labour market, reflecting the results of the Chartered Institute of Planning and Development’s (CIPD) latest Resourcing and Talent report. The increased focus on training and development is encouraging and is underlined by the increasing demand we have seen for our professional development and training services,” she added.

The research provides new insight into staff turnover within the recruitment sector, debunking the myth of extensive churn. Depending on length of tenure, the APSCo/Deloitte research shows average turnover rates of between 12% and 19% - well below the UK average of 25% for all sales/service businesses.

While these results will be welcomed by the sector, the majority of recruitment firms are concerned about accessing the talent required to cope with growth. Six-in-10 (62%) respondents highlighted this as their number one challenge for the year ahead.

Katie Folwell-Davies, financial advisory partner and lead partner for human capital services, Deloitte, commented: “A key focus is investing in talent to support growth and profitability targets – particularly as 41% of respondents indicated that some level of merger and acquisition activity may be on the agenda. The sector remains highly competitive and it is harder to find and retain employees – there is also more pressure on firms to provide an attractive package that offers a range of financial and non-financial benefits.”

Ms Swain added: “It is ironic that as a profession, while we are excellent at identifying and attracting talent for our clients, that success often isn’t replicated within our own businesses. If the profession is to achieve its true growth potential then it must aim to achieve the same ‘employer of choice’ status within the graduate community as other major professions enjoy. This is just one of the reasons why APSCo launched its undergraduate paid internship scheme last year.”