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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.

Brexit impact
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.

Talent challenges
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.

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Gender diversity
Among respondents, the highest number of women was at the recruiter level (41%). However, this percentage reduced significantly at leadership level (35%) and board level (25%). Further analysis showed that 47% of firms’ have fewer than 10% female representation at board level. This gender disparity is no doubt linked to wider talent challenges across the sector. However, just 31% of companies have initiatives in place to retain women, with 23% of respondents offering flexible working and 9% providing enhanced maternity benefits.

Commenting on the findings, Jamie Cassell, Partner at Saffery Champness, said, “It is encouraging to see that margins remain resilient during this period of uncertainty, particularly within sectors where skills demand is shifting in line with technological advancement, such as IT and media & marketing. However, this is no accident. There is little doubt that businesses are building strategies in response to external forces and taking conscious steps to mitigate against risk.

Ann Swain, Chief Executive of APSCo, added, “Our market is currently facing unprecedented challenges. However, today’s rapidly shifting landscape is also presenting ambitious firms with exciting opportunities and our results indicate a profession which is robust, agile and evolving.”

“While Brexit continues to dominate headlines, it is interesting that the need to upskill employees is seen as the number one challenge for recruitment leaders, with economic uncertainty due to the UK’s withdrawal from Europe coming in second.”

To find out more about contracting please contact Jaime on 01442 795 100 or email

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With over 25 years experience in contractor accountancy helping thousands of contractors, freelancers and the self employed, Dolan Accountancy has the specialist skills, reputation and credibility you can trust.

Working closely with our sister company, Contractor Umbrella, it means we can offer one low cost, fixed fee package at £105 + VAT. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost.

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