Turnover in the UK's recruitment industry has bounced back by over 25 per cent to just under £25 billion over the past year (April 2010 to March 2011), according to the latest annual industry report by the Recruitment and Employment Confederation (REC). The medium term forecast is for single digit growth over the next four years with the industry expected to peak at over £30 billion in 2014/15.
The sharp upsurge in the annual turnover to £24.6 billion, an increase of 25.3 per cent, compares to £19.7 billion in the same period the previous year (April 2009 to March 2010). More recent data from agencies confirms that the growth has decelerated, reflecting ongoing economic uncertainty. However, the upbeat message from the REC's Annual Industry Trends Survey is that the industry has a fundamental ability to re-energise itself and to come back stronger.
The key findings of the survey are as follows:
- Turnover in temporary/contract staffing has returned to 2006/2007 levels at £22 billion compared to its low point last year of £17.8 billion, a rise of 24.1 per cent.
- Permanent recruitment also rallied to reach £2.5 billion in the past year, a massive 37 per cent increase on £1.8 billion recorded in 2009/10.
- Volumes of perms placements rose by 38.3 per cent from 436,822 last year to 604,193 in 2010/11 while temp placements were up 19.3 per cent and top the million mark again at 1,049, 333 compared to 879, 000 last year.
- The number of people working in recruitment has gone up 13.1 per cent from 80,528 last year to 91,114 this year.
- The REC's Medium Term Forecast predicts the recruitment industry's annual growth at 3.6 per cent next year (2011/12) followed by 4.7 per cent in 2012/13, rising to 7.1 per cent for 2013/14 and 7.3 per cent in 2014/15. This represents a return to single figure growth over the next four years to reach a new peak of £30.8 billion in 2014/15.
Commenting on the data, Kevin Green, the REC's Chief Executive, said: "These results once again demonstrate the resilience of the UK recruitment industry. The 25 per cent swing over the past year means the industry has reclaimed much of the ground lost during the recession. The upsurge of temporary assignments to more than a million again underlines the value of flexible working patterns for both employers and jobseekers.
"The market remains tough for our members as the growth in sales has been accompanied by increased pressure on margins. Despite the inevitable focus on cost control, it is crucial for UK businesses to recognise the importance of sustainability of supply and quality of provision. This is a message the REC will continue to take forward in our dialogue with employers and business organisations."
Looking ahead, Kevin Green added: "Our medium term forecast points to steady but unspectacular growth over the next four years. The recruitment industry will continue leading the way in helping their clients create jobs and rebuild their talent.
"A number of challenges lie ahead – including the bedding down of the Agency Workers Regulations and pensions' auto-enrolment starting next year. However, the industry has consistently demonstrated its ability to overcome threats and to thrive. The latest survey is further evidence of this and we remain upbeat about the outlook for the UK recruitment industry."