Margins across the recruitment profession remain strong, but staff attrition and a need to upskill teams remain key challenges, along with Brexit, according to the 2019 Recruitment Index compiled by accountancy firm Saffery Champness LLP in association with Association of Professional Staffing Companies (APSCo).

The index showed that gross margins for contract/temporary staffing averaged 17.5% across all respondents, although some sectors were performing significantly better. For contingent permanent placements, utilities & energy generated the highest average fee as a percentage of salary at 27%. This was followed by 23% for both media & marketing and accounting & finance.

While Brexit and associated economic uncertainly was cited as a barrier to growth by 60% of those surveyed, the top hurdle to business advancement was the need to upskill employees, which was identified by 80% of respondents.

In addition, those surveyed saw average staff attrition rates of 20% and above within their own businesses, with firms with net fee income over £10 million seeing rates as high as 33%. The index said that this may explain why increasing headcount remains the number one priority for firms, with 87% seeing this as their best way of achieving growth.

The report also showed that 55% of those surveyed said they were either partially or highly reliant on EU contractors, indicating that Brexit could be a threat to many businesses over the coming months and years.

When quizzed on future growth strategy, a desire to move into new geographies was evident, with Germany and the Netherlands being favoured European destinations for UK recruitment firms (identified by 29% and 12% respectively). The US remains a strong pull for recruiters, with over 20% either having opened offices or exploring the region.

Other findings from the index showed that among respondents, the highest number of women was at the recruiter level (41%). However, this percentage reduced significantly at leadership level (35%) and board level (25%). Further data showed that 47% of firms’ have fewer than 10% female representation at board level.

Ann Swain, Group CEO of APSCo, commented, “It is ironic that our profession, which is on the front line in the scramble for top talent, seems to be battling its own staffing crisis. The lack of gender diversity across the profession, particularly at senior level, remains a key obstacle which must be addressed urgently. This data suggests that talented females are either being lost to other professions, or simply not offered the opportunity to climb the career ladder and fulfil their full potential. In these turbulent times, those firms which can not only attract - but also retain and develop their own top talent - will thrive and prosper.”