The majority (64%) of recruiters in the UK saw net fee income (NFI) increase over the last 12 months, according to data from the fifth annual UK Recruitment Index from Deloitte and the Association of Professional Staffing Companies (APSCo).

The study of 100 companies also showed that despite the majority of recruiters reporting NFI increase, the share of respondents experiencing growth in NFI is at the lowest level since the report was launched. 

Katie Folwell-Davies, financial advisory partner and lead partner for human capital services at Deloitte commented, “The latest results indicate overall continued growth in the UK recruitment sector. While the majority of recruitment firms report increasing net fee income for their most recent financial year, the pace of growth seems to have slowed, with the lowest proportion of recruiters reporting increases in net fee income in the survey’s history. This may be attributed to a decrease in corporate risk appetite in an uncertain market.”
The report also reveals an increasing trend towards new European offices, with 14% planning to expand in the continent over the next 12 months. The figure is up from last year’s report, which showed that 5% of respondents planned to open hubs in mainland Europe. 

The study also showed that churn among recruiters has impacted productivity. On average, recruiters saw 26% churn of fee earner staff that had been with the business for less than 12 months.
Meanwhile, 74% of respondents cited learning and development as a priority for investment and 71% stated the need to upskill employees is a significant barrier to growth. More than half, or 55%, identified the impact of Brexit as a key challenge. 

“While UK businesses have held their breath during the political uncertainty seen over the past 18 months, growth in the sector has slowed and fee earner churn levels have risen,” Ann Swain, Chief Executive of APSCo, said. “Recruitment companies have seen challenges as a result of this, but are proactively using this time to focus on the people at the heart of their business and to reinforce their strategies with a view to the wider European market.”