Despite a challenging year in some respects for the UK recruitment sector last year, the 2024 Recruiter HOT 100 list showcases companies that have continued to demonstrate resilience, leading their respective sub-sectors in both navigating a turbulent hiring environment and maintaining high fee-earner efficiency.

Amid growing acute skills shortages across several key sectors, uncertainty surrounding the UK election, and subsequent changes to hiring policies and fiscal policies, this year’s featured companies continue to lead in technological integration and sector specialisation. These factors are increasingly vital for enhancing efficiency and maintaining growth as competition in the sector intensifies.

This year’s list features 22 new entrants, a significant decline compared to the 2023 list, which saw 72 new entrants. Companies featured in this year’s top 10 exhibited greater fee-earner efficiencies than both larger entrants and their less established peers. The resilience of the companies featured in this year’s list is further evidenced by a year-on-year revenue growth of 8.8%, with total revenues reaching £6.6bn, demonstrating that dynamic and well prepared recruiters can continue to achieve growth, despite the challenging trading environment experienced by many operating in the sector in 2024.

As was also observed in 2023, technology and IT sector recruiters continued to dominate, reinforcing the sector’s importance amid the global adoption of AI and automation and further advancement of innovative technologies. As technology and IT infrastructures become increasingly intertwined across the economy and acute skill shortages in the sector persist, large corporates continue to pay premium placement fees to attract top talent, boosting the profitability, efficiency and growth of recruiters servicing the sector.

In addition to technology and IT, other sectors that were prominent in this year’s HOT 100 include energy and health & social care, which continue to demonstrate resilience to wider market cyclicality, driving consistent hiring appetite and continued competition for talent. As competition continues to surge in the UK recruitment sector, private equity companies are increasingly focused on the highest performers, particularly those operating in specialist subsectors that demonstrate high growth and macroeconomic resilience.

This is made further evident with this year’s list featuring 23 PE-backed companies compared to 14 in 2023. The benefits of PE activity in the sector can be attributed to four key factors:

1. Access to funding for acquisitions, geographical expansion and technological integration.
2. Increased emphasis on enhancing efficiency and key performance indicators (KPIs).
3. Access to specialised expertise and strategic inputs, driving a competitive edge.
4. Dynamic synergies made possible via partnerships with a PE firm’s other portfolio companies.

Significant supply chain disruption, rising costs of materials, energy, labour and new carbon-reducing regulations have resulted in a slowdown in hiring activity across the built environment sector in 2024. However, it remains a key sector among recruiters in the HOT 100, with 18 companies featured servicing the sector. The sector is likely to see a resurgence in hiring activity in 2025 as significant government expenditure acts as a catalyst for growth, driven by pledges to build 1.5m homes over the next five years, ending the de facto ban on onshore wind projects, to develop a taskforce to accelerate stalled housing sites and restore mandatory housing targets.

In light of continued inflationary pressures, slower-than-expected interest rate reductions and uncertainties surrounding the UK budget for much of 2024, recruiters saw a slowdown in hiring activity, particularly in the permanent market, as large corporates became increasingly concerned about the rise in associated costs. As a result, companies featured in this year’s list saw a year-on-year reduction in average gross profit (GP) per employee from £129,238 to £126,426, a decline of 2.2%. However, the total number of employees working for the recruiters featured in this year’s list increased from 10,989 to 11,483 year-on-year, indicating a sustained drive to attract experienced fee earners in anticipation of a rebound in hiring activity in 2025.

2024 key trends & outlook for 2025

A trend in this year’s list is the improved performance of recruiters servicing high-growth, candidate-short sub-sectors such as technology, IT, and finance. Technology remains the most prominent sub-sector specialism, with 34 featured companies operating in the sector. The rapid growth of technological innovation and the importance of reliable IT infrastructures is driving increased confidence that technology will continue to be a key sector for growth in the UK recruitment sector in 2025.

The outlook for the recruitment sector in 2025 is optimistic, driven by a focus on agility and talent acquisition. The Bank of England’s anticipated interest rate cuts are expected to increase stability, boost confidence and drive investment and hiring, particularly across high growth critical sectors, supported by the government’s pledges of significant investment in infrastructure, clean energy, technology, creative industries, life sciences and advanced manufacturing.

The ongoing adoption of flexible working patterns continues to evolve recruitment practices, widening talent pools and necessitating changes in candidate engagement and company culture. However, the recent change in government and the subsequent tax increases and expected changes to employment rights require recruiters to remain vigilant and adaptable to the ever-changing market in the UK. Recruiters that can successfully navigate these challenges while maintaining large, active candidate pools in high-growth, candidate-short sub-sectors will continue to lead the way in growth and efficiency throughout 2025.

We would like to congratulate all those that featured in this year’s Recruiter HOT 100 list and we look forward to observing their growth as they continue to play a key role in sourcing talent across the UK economy.

Size and productivity

A notable trend in this year’s list is that bigger isn’t always better. Companies generating revenues close to the median of the entire HOT 100 list outperform their larger peers in terms of GP per employee. The top 10 entrants generated revenues 12.1% higher than the average of the list, while the bottom 10 generated revenues 101.1% above the average of the list.

The most successful companies operate at an optimum scale, achieving efficiency through three key factors:

• Medium-sized companies benefit from increased agility and can quickly adapt to emerging market trends, integrate advanced technologies and react to legislative changes, while maintaining a strong reputation in their respective sub-sectors.
• Compared with larger entities, medium-sized recruiters can remain more focused on optimising internal KPIs and fee-earner efficiency, aided by preserving smaller, more specialised teams.
• Medium-sized companies benefit more from greater marketing capability and can leverage a more established brand and reputation relative to their smaller peers.

Notable mentions

• SSQ Group, trading as SSQ, exhibited outstanding performance, placing number one on the list, generating a GP per head of £308,720.
• Optimus Search recorded the highest year-on-year revenue growth in this year’s list at 188.8%, operating at the forefront of high growth STEM markets.
• Finatal has achieved the highest year-on-year increase in GP at 161.3%. Its strategic involvement across finance & accounting, data & technology and private capital sectors positions it exceptionally well to meet the growing demand for talent across its end-markets.
• The Barton Partnership has significantly expanded its team, recording the highest annual growth in employee numbers at 72.4%. The company specialises in private equity, professional services and the commerce and industry sectors with offices across Europe, the US and Asia.

Key findings

• The success of the recruiters featured in this year’s list is illustrated by the total revenue of the list reaching £6.6bn, a 8.8% year-on-year increase, and a headcount expansion to 11,483, up 4.5% from 2023.
• Technology is the most prominent sector specialism, with 34 technology recruiters featured, highlighting the sector’s sustained growth, profitability and long-term prospects as the economy continues to embrace innovations in software, automation, and AI.
• This year’s list saw a 20.4% increase in the lowest GP per employee required to feature relative to the 2023 list, now standing at £50,724, underscoring the heightened levels of competition among leaders in the sector as fragmentation increases.
• The list exhibits a larger proportion of recruiters specialising in temporary staffing, with an average 64%/36% temp/perm split as corporates continued to delay permanent hiring strategies.
• 23 companies are PE-backed, marking a 64.3% rise from the 2023 list, echoing the benefits of PE investment in instilling greater focus on productivity optimisation, driving KPIs and providing a competitive edge.
• Companies operating smaller teams (than the list’s average of 115) exhibited greater fee-earner efficiency relative to their larger peers, with an average headcount among the top 10 of 71, in stark contrast to the average headcount among the bottom 10 of 232.

Methodology

The data for this year’s HOT 100 list, showcasing companies with the highest gross profit (GP) per employee, underwent thorough analysis and validation based on the following criteria:

• Size To qualify, companies are required to generate a minimum GP of £1.5m and have at least 20 employees.
• Accounts Latest available accounts for 2023 or 2024 have been used. Accounts must be externally prepared or audited in order to be eligible.
• Groups and subsidiaries For companies which are part of a Group, either the consolidated Group entity or its subsidiaries can be considered, but not both.
• Jurisdiction (Geography) Eligibility for entry was restricted to companies that are UK-controlled or derived entities. Companies that place talent worldwide which are controlled/delivered from the UK are also eligible.

To see the HOT 100 chart and the whole feature, click here.

Image credit | Will Williams