Big talking point: Fighting fit

The REC’s latest Recruitment Industry Trends report paints a picture of growth, as recruiters have responded rapidly to the challenges they have faced. Recruitment Matters looks at some of the highlights.

It has been an extraordinary year for recruitment and recruiters,” says Neil Carberry, chief executive of the Recruitment & Employment Confederation. “Tight labour markets and quickly shifting skills needs have driven the growth of the industry – but only because recruiters have adapted swiftly to changing times.”

That growth is reflected in the REC’s 2017/18 Recruitment Industry Trends report, which shows the industry’s turnover from permanent and temporary placements, as well as other HR services, increased 11% to £35.7bn. The number of businesses operating in the UK recruitment industry also rose by 10% to 30,430 over this period.

The biggest growth was seen in the number of permanent-centric enterprises that in turn helped fuel an increase in the number of permanent placements, which was up by 14%. Permanent margins were also up.

The average number of temporary and contract workers on assignment on any given day was 8% lower than the average daily number recorded the previous year. The rise in the average number of temporary/contract workers on the broader industry’s payroll in 2017/18 (1,646,000) was driven by the increased likelihood of workers on multiple provider payrolls.

Added value

The report continues to track the evolution of the industry – and the valuable services it offers – with buoyant demand for recruitment process outsourcing (RPO) and managed service programmes (MSP) in particular.

Following the off-payroll reforms in the public sector in April 2017, for example, there has been a growth in demand for recruitment agencies, and their supply chain partners, to take responsibility for administering PAYE for a significant number of workers falling within the remit of IR35.

When it comes to permanent placements, there is a growing number of companies that have fewer than 10 employees. This continues the trend towards more niche and specialist businesses, which choose to focus on a local market and/or particular skills.

And just as the number of enterprises grew significantly in 2017/18 despite, or potentially in response to, adversity, REC members believe the opportunities for growth continue as employers look to the industry for increasing support for skills and legislative challenges.

Looking ahead at the next three years, their optimism is reflected in the forecast for continued growth, albeit at a slower rate – 4% in 2018/19, 4.5% in 2019/20 and 5% in 2020/21.

“The path ahead is uncertain – Brexit, immigration reform, tax changes, technology. But this report shows that recruiters can look at that uncertainty and see the opportunities,” concludes Carberry. “Whatever the coming months and years bring, recruiters will continue to use their skills and knowledge to boost the UK’s labour market and find people their perfect job.”

The people

115,000 – the number of people employed in the recruitment industry, enough to fill all the seats and the pitch at Wembley Stadium. This is up 15% compared to the 2016/17 report.

1.02 million – the number of temporary/contract workers on assignment on any given day, a drop of 8%

1.14 million – the number of people placed by recruiters and associated HR services into permanent jobs, up 14%

The money

£30.85bn – 86% of industry turnover was achieved through temporary/contract placement activity, proportionately similar to 2016/17

£4,238 – the average value of permanent placements from the wider recruitment industry, up 6.4%

£34,976 – the average annualised turnover of each temporary/contract worker on assignment, up 20%

4% – the growth in average margins for permanent placements, over the last year, compared with a decline of 4.3% in the average margin for temporary/contract placements

The assignments

12+ weeks – 64% of temporary assignments were for more than 12 weeks in 2017/18, compared to 61% in 2016/17.

6+ months – 20% of temporary assignments lasted for more than 6 months, at a similar level to the previous year

85% – the proportion of contract placements lasting more than 12 weeks, up from 80%. 45% of contract workers were on assignment for 6+ months, including 9% on contract for 12+ months.


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