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Viewing report
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Recruitment Agencies (Temporary and Contract) Market Report 2002
Key Note Publications Ltd, Nov 2002
This report looks at the temporary and contract recruitment market in the UK. It covers organisation, that recruit on behalf of clients for temporary positions, whether they call themselves recruitment consultants, recruitment companies or employment agencies.
According to The Recruitment and Employment Confederation (REC), the market for temporary and contract workers was worth £22.59bn in the year ending June/July 2002, which represents 7.2% growth since 2001. The major sectors of the market include nursing and other medical, blue collar and secretarial and clerical. The fastest-growing part of the market has been nursing, medical and driving appointments. There has also been a large rise in financial appointments. The recruitment market as a whole is struggling, and 2002 has so far been the most difficult year in the past 10 years. After several years of high growth, the market has completely slowed down, and there is now considerable pressure on fee rates. As a result, profit margins have reduced throughout the industry.
The industry which serves this market is quite a fragmented one. However, there are a number of very large companies in the market. The major firms are: Addeco Holdings (UK) Ltd, Hays Personnel Services Ltd, Manpower PLC, The Corporate Services Group PLC, The Capita Group PLC, Select Appointments PLC, Spring Group PLC, Reed Executive PLC, Nestor Healthcare Group PLC and Pertemps Recruitment Partnership Ltd.
The industry is not only concerned about the state of the recruitment market but also by the continuing stream of new legislation, most of which is prompted by more directives from the European Commission. The new Employment Agencies Act looks set to take effect as from June 2003, after 4 years of discussions between the Government and the REC. Meanwhile, the Employment Act 2002 became law in July 2002. Both these pieces of legislation will affect employers and recruitment companies. At present, another legislative development is being discussed. This is the EU Agency Workers Directive. It entitles temporary workers to the same rights as permanent staff in every employing organisation in the UK. The Directive is only at a draft stage but is already the subject of intense lobbying by UK employers and UK recruitment companies.
We anticipate a low growth rate in the market for 2003, compared to previous years, and it is likely to leave many recruitment companies suffering. In 2004, we expect the market to improve a little further.
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