Recruitment industry took in a record £38.9 billion despite a difficult year
Recruiters made more than a million permanent placements in the year to March 2019, according to new data published by the Recruitment and Employment Confederation. On any given day the industry put over 1.1 million people in temporary and contract roles.
The REC’s annual Recruitment Industry Trends report for 2018/19 shows that the industry’s turnover reached £38.9 billion. £33.4 billion was generated through temporary/contract placement activity while £5.5 billion was achieved through permanent placements.
The number of recruitment businesses and the number of people working in recruitment grew. In March 2019 there were 31,140 firms in the industry, up 2% from the previous year. The total number of staff rose by 3% to 119,000 people, approximately the population of Colchester.
During this time a significant proportion, up to 82%, of UK employers who use recruitment agencies were satisfied with the service they got. Similarly, many hirers, up to 83%, were satisfied with the candidates coming through the agencies they work with.
Neil Carberry, Chief Executive of the Recruitment and Employment Confederation, said:
“With skills shortages and economic uncertainty dominating the agenda in 2019, many firms reported that client confidence was an issue – so making progress was that little bit harder. With that in mind, it’s testament to the great work recruiters put in that industry turnover reached £38.9 billion. The industry’s progress is good news for the whole economy because good recruitment underpins growth and productivity for clients and opportunity for candidates.
“As we go into 2020, things aren’t getting any easier. There are big legislative changes on the horizon, as well as the next stage of Brexit. What will IR35, the Good Work Plan, an ageing workforce, automation, or decarbonisation mean for the labour market and recruitment? The REC will be by the sector’s side as it faces up to and navigates these changing times.”
Markus Keller, UK Head of Global Trade and Receivables Finance, Corporate and Business Banking, at HSBC UK Bank plc said:
“This survey presents a fascinating insight into the topics that matter to such an important UK business sector; one that itself provides such a valued service to UK businesses of all types and sizes.
“We see in this year’s survey how the UK recruitment sector has grown, despite the challenges of a difficult economic environment. To see a net increase of more than 700 new agencies is highly encouraging; that the recruitment industry now employs 119,000 people across the country is also hugely impressive.”
Other figures from the 2018/19 report include:
- The average Gross Profit level recorded by the industry was 17.2%. The average Operating Profit was recorded at 3.8%.
- The average value of each permanent placement from the wider recruitment industry was £5,152. The average margin on permanent placements achieved by the industry was 14.7%.
- The average annualised turnover of each temporary/contract worker on assignment was £30,219. The average margin on temporary/contract recruitment was 17.3%.
- Recruitment Industry Trends 2018/19 also includes the REC’s revenue forecast for the next three years, which remains positive despite the unknowns in the political landscape. The REC predicts that the UK’s recruitment industry will grow by 4.6% in 2019/20, 3.0% in 2020/21, and 5.9% in 2021/22.