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UK – Recruitment industry to change, says REC

06 November 2012

The recruitment industry grew by +4.3% to a total value of £25.7 billion in the 2011/12 financial year, helped by the temporary staffing industry. New research now indicates that the market will exceed its pre-recession peak of £27 billion by the end of 2013/14, according to the Recruitment and Employment Confederation (REC).

Although staffing revenues have increased, the number of recruitment agencies has fallen by -11% between 2010 and 2011 from 8,395 to 7,435. This, the REC believes, is just one indicator that significant changes for recruiters are lying ahead. 

A new survey on industry trends in 2011/2012 reveals that the growth in the market was driven by temporary placements which increased by +5.4% while permanent placements fell by -8.9%. But many recruiters remain concerned about the lack of skilled candidates, which is putting pressure on margins. 

The findings also show that the majority of agencies reported earning margins of 10% to 14%. But the proportion of agencies saying earnings have increased above +25% halved for the second year in a row to just 1.7%. 

Looking ahead, the REC predicts that the recruitment industry will continue to consolidate in the coming years with larger firms keen on acquiring smaller niche players.

Social media and the use of technologies is also likely to impact the industry and the REC predicts that cost reductions and risk management on the use of intermediaries will increase in the future. It warns that permanent recruitment will come under increasing pressure from growing in-house resourcing teams.

“The recruitment industry won’t be able to piggyback on strong economic growth in the wider economy as it has done in the past and running a successful agency is only going to get harder and demand more of recruiters,” said REC chief executive, Kevin Green.

“The ones who survive and thrive will be those who stay ahead of these trends and become expert providers of talent within their particular niche sectors. The future is all about being an inch wide and a mile deep in terms of focus and knowledge.”

Members of the REC can get the report free and it is available for others to buy here.


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Rebekah French 09/11/2012 9:33 am

Times they are a changing....thank god. Back to the days of quality over quantity.

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