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Recruitment Agencies (Temporary & Contract) Market Report 2011
Key Note Publications Ltd, Jan 2011, Pages: 101
This report looks at the market for temporary and contract staffing recruitment in the UK. It covers those businesses which recruit on behalf of clients for temporary and contract staffing positions, whether they call themselves recruitment consultancies, recruitment companies or employment agencies.
The recruitment industry is beginning to recover from 3 very tough years, spanning roughly from August 2007 to March 2010. Every part of the industry has been affected by the recession, although some more so than others. In the temporary and contract staffing sector of the recruitment industry, sales volumes were down by 17.7% in the year to March 2010, compared to 2009. The market picked up in April 2010, and has continued to do so since, although this improvement in the market slowed down August onwards. The market is not constant, with demand for staff in different sectors shifting from month to month during 2010, which has meant that recruitment firms have found it difficult to forecast what their earnings are going to be on a quarterly basis.
The market for temporary and contract work was worth £17.8bn in the year to March 2010, according to the Recruitment & Employment Confederation (REC). This is the lowest figure for at least 5 years, with the REC’s figures revealing that the value of the market stood at £21.56bn in 2005.
The sectors that have come out of the recession the best include industrial/blue collar, secretarial/clerical and drivers. Hotel and catering staff were more in demand in 2010 than in 2009, while the nursing/medical sector remained strong. However, most sectors experienced shortages over the same period, particularly in industries which require skilled workers, such as in manufacturing, where such experienced employees have been in short supply.
Current issues affecting the industry include profitability; government policy regarding migrant workers; exploiting the Internet and mobile technology more effectively; and the Agency Workers Regulations (AWR), which will take effect on October 1st 2011. The AWR is the outcome of the EU’s Agency Workers Directive (AWD), which was ratified by the EU Parliament in October 2009. A further issue for the recruitment market is that more and more clients and potential clients are now choosing to recruit direct, thus cutting out the need for recruitment consultation completely.
The prospects for the recruitment industry will be dependent on how many jobs the private sector can create over the next 4 years, as public and bodies reduce their staff, in line with the Government’s cuts. Another factor which will affect the industry is the UK’s GDP in 2011. As this report was completed, the Institute of Directors (IoD) forecast that the UK economy will only grow by 1.2% in 2011, far less than the growth rate experienced in 2010. It is also lower than most other forecasts, including that of the Bank of England.
Considering these factors, the authors forecast a slight increase in the market of 1.5%, for the year ending March 2011, with growth of around 4% expected for 2012.
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