Contractors aid record returns in recruitment sector

Tuesday 28 October 2014

Umbrella company contractors have helped the recruitment sector gain record returns and surpass its pre-recession peak.

By the end of the financial year 2013/14, the UK's recruitment industry recorded its total revenue at £28.7 billion. This is according to new research published by the Recruitment and Employment Confederation (REC).

Total industry turnover went up by 8.2 per cent compared to the results from the previous year, which saw revenue of £26.5 billion. It also exceeded the previous record high of £27 billion, which was achieved during the year 2007/08.

What drove this growth was the increased volume of activity and a decrease in the amount of work that was done in return for low margins.

According to UK labour market data, on any given day during 2013/14, about 1.15 million people went out to work on either temporary or contract assignments that they gained through a recruitment agency. Additionally, more than 630,000 people were able to secure a new permanent job with the help of recruiters during this time.

Among the other trends that were found through the REC's Recruitment Industry Trends survey was that temporary business was responsible for gaining 91 per cent, or £26 billion, of the total revenue that the recruitment industry gained. Permanent business made up the remaining nine per cent, or £2.7 billion.

The turnover for temporary and contract business went up by 8.2 per cent year on year. This is a record as the results topped the previous high of £26 billion for the first time.

What's more, the volume of temporary and contract recruitment increased by 2.4 per cent. This represents the fourth consecutive increase in activity year on year.

It seems that these contracts are keeping freelancers in business for fair periods of time too as 56.6 per cent of all temporary and contract assignments are for 12 weeks on more.

Chief executive of REC Kevin Green pointed out that the organisation intends to use such data as this to get the government and other European countries to better appreciate the flexible labour market.

He said: "The importance of the UK’s flexible labour market in helping keep more people in work than in other European countries should be better appreciated by both business and government. As the professional body for the UK’s recruitment industry, it’s our job to ensure that message is heard and understood by the people and institutions that have the power to affect our members’ businesses and the marketplace in which they operate. Detailed data, like that revealed in our annual survey, helps us to make that case.”

Indeed, policy seems to be an area that could potentially cause issues for contractors who are looking to find work through recruitment agencies.

According to REC, the area that concerned recruiters most when it comes to supplying temporary staff was compliance and legislation, which includes agency workers regulations. Four out of ten agencies said that this troubled them.

By Victoria McDonnell

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