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Recruitment industry growth continues

900 new recruitment businesses set up shop so far this year lower than in 2016, but it’s too early to suggest a possible slowdown in 2017

The number of new recruitment agencies that opened their doors in the first four months of 2017 reached almost 900. But although the rate of growth marks a slowdown compared to 2016, this number is expected to rise after the General Election, according to a leading PR firm for the recruitment industry, ClearlyPR.

Figures obtained by ClearlyPR this week, under a Freedom of Information request from Companies House, show that between January 1st and April 30th this year a total of 887 new recruitment businesses were officially registered.

In January, 302 new agencies were registered while 181 and 298 were registered in February and March respectively. In April, the figure was 106 as news of the snap General Election appears to have slowed down the number of recruiters opting to go it alone.

On average, 221 new agencies were registered in each of first four months of 2017 compared to an average of 380 that registered each month during the whole of 2016.

This brings the total number of recruitment agencies in the UK to a record-high of 27,788 – a three-fold increase since January 2012, and a rise of 18,158 in just five years.

In 2016, 4,529 new recruitment businesses were registered compared to 3,984 in 2015 and 3,027 in 2014.

PMC Mar 2017
Paul MacKenzie-Cummins, Managing Director at ClearlyPR and Editor of Recruiter imPRint

Commenting on these latest findings, Paul MacKenzie-Cummins, Managing Director of ClearlyPR said: “The last three years have seen exceptional growth for the recruitment sector.

“Positive trading conditions combined with improved employer confidence have provided the perfect platform for aspiring recruitment entrepreneurs to go it alone.

“But while the number of new agencies registered since the start of the year is lower than the average that started up last year, we predict an upswing in the coming months.”

“During the first half of 2016, the number of newly registered recruitment businesses was actually lower than the number we have seen so far this year. Much of this was down to many would-be recruitment entrepreneurs delaying their plans pending the outcome of the Brexit vote in June.

“It is a similar story this year too. Last month’s announcement that there will be a snap General Election in June would appear to have had the same effect, as the low numbers of those setting up shop in April would testify.

“However, if last year is any indicator, we can expect to see this rise once more after the outcome of the election has been decided.”

Recruitment continues to grow May 2017 Recruiter imPRint

Indeed, the two months immediately after the UK voted to leave the EU saw a sharp rise of 1,051 recruitment agencies registering as new businesses – representing almost 1 in 4 (23%) of all new registrants throughout the whole of 2016.

“The recruitment industry continues to a major driver for the UK economy, and there are few sectors – if any – that can match it in terms of entrepreneurship.

“But with this increased competition comes the need for agencies to find new ways to raise their profile and position themselves as a go-to provider in their sectors. If they don’t, their competitors will catch up and eventually overtake them.

“Being a ‘name’ no longer suffices. We are in an age of influencer marketing, where client decisions are increasingly being based on their own experiences and those of others who have engaged with that agency brand.

“In practice, that means having an appealing brand that is communicated through a strong social media presence, enhanced client and candidate engagement (not just selling), and having an active presence in the media where their target audience ‘hangs out.’”

Note: The figures quoted were obtained from Companies House under a Freedom of Information request and are correct as at 8th May 2017.

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