What’s happening with the recruitment sector?

Dougie Collier, Content & Research Marketing Executive

One of our main sectors (as I’m sure you already know) is recruitment, so much so, that we pride ourselves on our knowledge of this indispensable industry. We do everything we can to know as much about the comings and goings of recruitment as possible.

As with our previously published data in December 2017 and May 2018, we have set out to provide a snapshot that shows you how the industry is doing. Just like 2017, this year looks set to be a record-breaking one for new recruitment agency start-ups, according to the latest industry statistics.

Using data obtained from Companies House under a Freedom of Information Act, the figures show that 7,630 new agencies have registered since 1st January 2018. This equates to an average start-up rate of 848 per month.

By the end of 2018, we have predicted that this number will stand at more than 10,000 – a record-high for the sector.

What’s accounting for this growth surge?

With Brexit on the way and talk of skill-shortages across many different sectors, our MD, Paul MacKenzie-Cummins had this to say: “Despite the doom and gloom over Britain’s impending exit from the EU, surprisingly Brexit has served as a catalyst for industry growth rather than a hindrance.

“Since the referendum of June 2016, the number of new recruitment businesses starting up has continued to rise, with last year seeing 9,001 agencies opening their doors for the first time. And it is easy to see why.

“Record high employment is great for the economy, but it also means that talent pools are shrinking. Yet employers have vacancies to fill and the harder it becomes to find the people they need, the more likely they are to turn to recruiters to solve their recruitment challenges.

“Then there is the virtual removal of the barriers to entry for new start-ups. One legacy of the recession has been the rise in alternative finance providers, who enable agency owners to gain access to the funds they need without having to wait weeks or months before clients settle their invoices.

“Add off-the-shelf websites and cloud-based ATSs and CRMs to the equation and it is easy to see why so many ambitious consultants are opting to go it alone – the opportunities and demand are high, while the support to help them get off the ground in the first place is plentiful.”

The UK’s fastest growing cities for new agencies:

This year’s top 10 cities for recruitment start-ups are as follows:

  1. London – 2,962
  2. Birmingham – 1,207
  3. Manchester – 128
  4. Leeds – 122
  5. Leicester – 81
  6. Bolton – 58
  7. Nottingham – 52
  8. Bristol – 49
  9. Berkhamsted – 44
  10. Walsall – 40

Because of fears over Brexit, many skilled workers from Europe and further away are struggling to move into the country. This is exascerbating the talent shortage and propelling the need for those whose candidate pools could be a lifeline for many organisations across a range of sectors.

Earlier this year, it was discovered that more than 2,300 visa applications from doctors looking to work in the UK had been rejected, so it’s not down to the lack of demand. The NHS is struggling and more doctors (especially 2,300) could go a long way to alleviate that.

Proven by stories like this, there is a gap in the market for specialist recruitment firms that actively search for skilled recruits in specific sectors, and recruiters are having to adapt and evolve. I was recently in a talk by Bill Boorman where he noted that recruitment is no longer ‘jobs for people’, it is now ‘people for jobs’.

The industry is changing, and it is only the firms that can adapt, evolve and stand out that will flourish.

If you want to find out how we can help you stand out from the crowd, please do get in touch!