Ready for Your Close Up?
After taking a comprehensive look at the decade in our #10YearChallenge post, let’s focus our attention on development within the recruitment industry, for the same period. Here we will plot out why and how the industry has continued to grow, the current state of affairs and include some enticing predictions for the future.
The recruitment industry has been growing consistently since 2010 and it appears to be going from strength to strength. The latest records from Companies House reveal that 84% of all recruitment agencies currently in existence, were registered in the last decade! And the REC annual report for 2017/18 revealed some startling results, specifically a 10% rise in the number of recruitment enterprises, and an 11 % rise in total industry turnover, reaching a record £35.7 billion.
So why have we seen this accelerated growth over the years? Initially, we must give credit to the resilience of recruitment industry during the 2008 global financial crisis. During this period of high unemployment many enterprises used their unique position to assist other businesses recruit the skills they needed. Ultimately enabling recruitment to grow strongly from 2011 onwards. The financial community refer to sectors that rise early after an economic downturn as “crocuses”. A nice seasonal image for us all as we sit at our work desks willing spring to arrive!
Since the crisis, however, the continued acceleration of growth can be largely attributed to the adaptability of the recruitment industry and its ability to embrace change. Technological innovation has had a profound impact. Development of on-demand software, streamlined finance solutions, smartphones and the advantages of social media have all contributed to a hospitable market where recruitment entrepreneurs can succeed.
The challenges the recruitment industry faces in 2019 are not so different to those in 2018. Skills shortages, particularly after the Brexit vote, ensure that it remains a candidate driven market and clients still expect recruiters to source new in-demand talent from a diminishing pool of reserves. But despite Brexit uncertainty there are positives to the status quo. The jobs market remains robust and employment strong (see graph) even as markets are fearful of a slowing economy.
The graph above, created by the Office of National Statistics, shows continuous increase of employment rates in UK, particularly in recent years.
Now may be as good a time as any to launch a new recruitment business. The REC have predicted that 56% of vacancies in the next 12 months will be filled by agencies. This fundamental role in combination with the sector’s crocus tendencies and advances in digitisation (as mentioned above) mean that recruitment is becoming very attractive. An influx of new agencies is likely to continue throughout this year increasing competition. Nevertheless, resources are available to smart recruitment companies and 1PS are here to help both new and established businesses succeed with our expertise in finance and technology support.
So the future looks bright. Whilst growth may not continue at the same rate, growth is still expected to occur. The REC predicts turnover growth of 4% in 2018/19, 4.5% in 2019/20 and 5% in 2020/21, despite the unknowns in the political landscape. This doesn’t mean that anyone working in the industry can become complacent. Irrespective of how good the job market is and how much technology and finance is available, anyone wishing to stay on top must keep abreast of the best tools, latest trends and be willing to adapt.
Within the industry this may mean the use of AI, adopting new interviewing tools and strategic data usage. And outside of recruitment other rising industries to keep your eye should include Fintech, Biotech and Blockchain.