A third of UK recruiters are making a loss, according to new research from market analysts Plimsoll.

David Pattison, senior analyst and author of the new ‘Plimsoll Industry Analysis – Recruitment Agencies’, explains the growing problem in the market: “Whether it’s fuel, materials or wage demands every company in the UK recruitment agencies industry is being squeezed by ever increasing costs.

“And 62% of companies have seen their gross margin fall in the latest year. Unfortunately, many are reluctant to pass on price rises for fear of losing customers to cost-savvy competitors. However, falling profit margins across the industry is the first warning sign that this strategy has become unsustainable.

“Over the past two years the average profit margin in the UK recruitment agencies industry has fallen to 2%. More worryingly, 298 companies are losing money with 135 of these doing so for the second year running. These companies face a tough decision – protect their market share and continue to lose money or adjust their prices to reflect their increased costs. Without refocusing on the bottom line, many of these companies will simply run out of cash.”

Recruiter readers are entitled to a £50 discount of this new special edition of the ‘Plimsoll Industry Analysis – Recruitment Agencies’. Call 01642 626400 for further details and quote reference PR/SV30.