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Despite a recent report by industry analysts Plimsoll, which says that 17% of the top 1,000 recruitment firms are at risk of becoming the victim of a hostile takeover, Alex Arnot, an experienced board adviser to the recruitment sector, says that many organisations are in their strongest position for years.
Mr Arnot explained: “As someone who advises or has advised a number of the top 1,000 recruitment companies I know that the vast majority are now, having survived the worst recession of all time, in their strongest position for many years and are now looking again to maximise the value of their company moving forward.”
“With the market looking stronger now than it has for many years, firms are now focused on reigniting their growth strategies. Virtually every one of the boards that I sit on is hiring at their fastest ever trajectory. Directors are re-motivated, confident about the future and looking to take their business to the next level rather than considering exiting. With their renewed success they have additional cash, a stronger balance sheet and very little desire to give any of their business up to potential suitors at what they would see as a comparatively low-price point.“
Mr Arnott is currently a Non-Executive Director of Kea Consultants, Zebra People and DMJ.
“While it’s a truism that everyone has their price, very few are looking to sell at a point that they would regard as 'on the cheap' when they are more excited than ever about building for the future,” Mr Arnot concluded.
According to the research from Plimsoll, of the 1,000 recruitment companies in their report 597 were rated as ‘Strong’ and ‘Market Leading’; however 160 other companies were rated as in ‘Danger’ and need to improve quickly in order to survive. Competitive pressure is reportedly so intense that a fifth (218) of the recruitment firms surveyed are making a loss.