Recruitment sector remains strong

(3 minutes to read)

Margins across the recruitment profession remain strong, but staff attrition and a need to upskill teams remain key challenges along with Brexit.

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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Give us a call on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.

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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 jaime.thorpe@dolanaccountancy.com.

Why Dolan Accountancy?

Dolan Accountancy was set up by Simon J Dolan, the man behind the well-known brand SJD Accountancy. With over 25 years experience in the contracting marketing, Dolan Accountancy has the heritage, 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 £95 + VAT per month. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost. We don’t believe in tiered packages or hidden extra fees, instead we aim to give you everything you need, including:

  • Free Company Formation – This is where it all begins. Once you have decided on an available name, we will form your company free of charge (if using our accountancy services) and it will be ready for you to use in as little as three hours.
  • Free use of Contractor Umbrella – With changes in Public Sector IR35 Legislation we understand that sometimes you are required to contract via an umbrella company. We will keep your limited company ticking over, while you work margin free via our sister company, Contractor Umbrella.
  • A Dedicated Accountant – Your accountant will be there for any company or personal tax advice that you require. We will never outsource work, even to internal teams.
  • Free Access to FreeAgent – The founder behind the multi award winning FreeAgent platform was one of Simon’s first clients, therefore it only seems fitting that we offer all of our clients access to FreeAgent, free of charge.
  • Free Business Banking – We have decided to waive our commission so our clients can use Tide free of charge for the first year.
  • Unlimited IR35 Status Reviews – We will review all of your contracts for IR35 purposes and provide you with our professional opinion as to its status.
  • Free Registered and Director’s Service Office Address – Sometimes you just don’t want your home address on display at Companies House. When you sign up to our accountancy services, we will offer the use of our address as an alternative.
  • Your Business and Personal Taxation Needs – This includes Company Accounts, Director’s Personal Tax Return, VAT Returns, Payroll, Corporation Tax and Dividend advice, to name just a few.
  • Same day payments- We offer same day payments as standard providing funds are received into our account by 9am, for no additional fee.

If you’d like to find out more about how Dolan Accountancy can help you and your business, please give us a call on 01442 795100 or email sophie.lewis@dolanaccountancy.com or jaime.thorpe@dolanaccountancy.com.

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