What will be your mantra as your business moves into a new year – ‘Drive to ’25’, ‘Thrive in ’25, ‘Revive in ’25’ or ‘Survive in ’25’?

Directors gathered for an Elite Leaders insights discussion pondered that wry question, with overall agreement that 2024 has been “a tough year” for many recruiters – and one diplomatically-expressed view at the meeting that the current year has been “challenging with pockets of light”.

Statistics suggest that recruitment has indeed seen a difficult business year or 18 months – even “brutal”, some say – with an estimated 600 recruitment businesses having left the field and the loss of 32% of the recruitment consultant workforce over the same period. Elite managing director Sid Barnes (below) predicts that 2025 will get off to a slow start.

“I don’t think next year is going to be hugely exciting for the UK,” Barnes said. “I think the first half will be more of the same [as 2024], and I think we’ll see an uplift in the second half  [in the UK] … a much more buoyant uplift.” He went on to suggest that recruiters in the “mid to senior level, white collar, mainly professional spaces” will see an average of 23%+ net fee income growth, year-on-year, with probably 6% of that figure emerging from “market uplift, inflation, salary increases”.

“Where’s the rest (of the 23%+) coming from?” Barnes asked.

Key to NFI growth is about capacity analysis and productivity, he said, not about increasing head count. “I’ve said to companies, the last thing you need is more heads. It’s about capacity analysis, so I like to look at who’s not producing an average (amount of sales). How do you get those people up before you’d even contemplate bringing anyone else in?

“That’s always baffled me in the past,” Barnes continued. “It seems that head count has been about ego, and a lot of people have sailed very close to the wind because of ego and no longer exist right now. This is not about ego. It’s about productivity.”

Financial improvement also means earning more business from existing clients, Barnes emphasised. “The ideal is, you’re going to grow by 25% next year, and all of it is going to come from clients that you billed in 2024 – if you can do that,” he said, “that’s the quickest shortcut. In my opinion, the objective is to keep every customer and get them to spend more every year.

“Is that going to happen? Not all the time now, but that has to be the anticipation. It is still way easier to do repeat business than it is new. Yet, as an industry, we’re still absolutely obsessed with new business.”

Summarising, Barnes said: “We can’t do anything about the external market, so we’ve got to do as much as we can on the internal market. It’s still a £1tn business globally, and there’s 600 recruitment companies unfortunately gone bust in the last 18 months, and there’s 32% fewer recruiters than there were 18 months ago. The market’s tough… so we fight, right? We fight until the last person turns the lights off.

“The good companies focus on productivity, customer focus, marketshare, regardless of the market; so while we hope for the best, we plan for the worst.”

DeeDee Doke

Image credit | Shutterstock