Despite the continuing Brexit turmoil, latest findings have shown that the recruitment sector remains strong.
However, staff attrition and upskilling teams still remain a key challenge for the sector – this is according to the 2019 Recruitment Index compiled by Saffery Champness LLP, in association with the Association of Professional Staffing Companies (APSCo).
The report revealed the following information:
Margins remain strong
Gross margins for contract/temporary averaged 17.5% across all respondents although some sectors were performing significantly better. For contingent permanent placements, utilities & energy generated the highest average fee as a percentage of salary at 27%. This was followed by 23% for both media & marketing and accounting & finance.
Over half of those surveyed (55%) said they were either partially or highly reliant on EU contractors, indicating that Brexit could be a threat to many businesses over the coming months and years.
When quizzed on future growth strategy, a desire to move into new geographies was evident, with Germany and the Netherlands favoured European destinations for UK recruitment firms (identified by 29% and 12% respectively). The USA still remains a strong pull for recruiters with over 20% either having opened offices or exploring the region.
While Brexit and associated economic uncertainty were cited as a barrier to growth by 60% of those surveyed, the top hurdle to business advancement was the need to upskill employees, which was identified by 80% of respondents.
In addition, those surveyed saw average staff attrition rates of 20% and above within their own businesses, with firms with an NFI over £10m seeing rates as high as 33%. This may explain why increasing headcount remains the number one priority for firms, with 87% seeing this as their best way of achieving growth.