The value of the UK’s recruitment industry has surpassed its pre-recession peak, recording total revenue of £28.7 billion by the end of the financial year 2013/14, according to new research published today by the Recruitment and Employment Confederation (REC).
Total industry turnover increased by 8.2 per cent on the previous year’s total, £26.5 billion (2012/13), and exceeded the previous record high of £27 billion achieved in 2007/08. Growth in revenue was driven by an increased volume of activity and by a fall in the proportion of work conducted in return for low margins.
Illustrating the integral role recruiters play in driving the record levels of employment witnessed in the UK labour market the data reveals that in 2013/14 recruiters helped more than 630,000 people find a new permanent job, and that on any given day 1.15 million people go out to work on a temporary or contract assignment secured via a recruitment agency.
Other headline findings from the REC’s Recruitment Industry Trends Survey 2013/14 include:
- Of the total industry revenue of £28.7 billion, £26.0 billion (91 per cent) was derived from temporary/contract business and £2.7 billion (9 per cent) from permanent business.
- Turnover for permanent business increased by 8.7 per cent year-on-year, but remains 37 per cent below its pre-recession peak of £4.3 billion in 2007/8.
- The 8.7 per cent increase in revenue from permanent recruitment was derived from a 2.8 per cent increase in volume.
- A shortage of candidates with appropriate levels of skills and experience is the top concern among agencies working in permanent recruitment, with a third of recruiters (34 per cent) saying they face the issue (up from 25 per cent in 2012/13 and 14 per cent in 2011/12).
- Turnover for temporary/contract business increased by 8.2 per cent year-on-year, exceeding £26 billion for the first time and reaching another record high.
- The volume of temporary/contract recruitment increased by 2.4 per cent, a fourth consecutive annual increase in activity.
- More than half (56.6 per cent) of all temporary and contract assignments are for 12 weeks or more.
- ‘Compliance and legislation (including Agency Workers Regulations)’ is the concern cited most frequently by agencies supplying temporary staff with four in ten (41 per cent) agencies listing it as a concern.
REC chief executive Kevin Green says: “The recruitment industry is the driving force behind the UK’s labour market recovery. The positive impact that recruiters have on people’s working lives and the businesses in this country is the reason we have record employment, and unemployment falling at unprecedented speed.
“As the jobs market recovers, there are still challenges. Some bigger businesses are creating their own in-house recruitment teams, clients are demanding more in a market where skilled candidates are harder and harder to find, while new online tools lead some employers to assume that sourcing and sifting candidates is easy.
“Last year this survey showed that volumes had grown substantially but revenue growth had not kept pace. We predicted recruiters would gain from efficiencies they had made within their own businesses once the economy started to pick up, and this year’s data shows that those benefits are now being realised. Agencies have emerged from the recession as leaner and smarter operators. Today’s market is a challenging one, but it’s still one in which high-quality recruitment businesses can flourish.
“The importance of the UK’s flexible labour market in helping keep more people in work than in other European countries should be better appreciated by both business and government. As the professional body for the UK’s recruitment industry, it’s our job to ensure that message is heard and understood by the people and institutions that have the power to affect our members’ businesses and the marketplace in which they operate. Detailed data, like that revealed in our annual survey, helps us to make that case.”
Recruitment Industry Trends Survey 2013/14 is the seventh annual industry assessment of its kind published by the REC and contains historical data going back to 2001/02. The latest information was drawn from the survey responses of 585 recruitment firms. The report is available online at www.rec.uk.com/trends and is free to download for all REC members.