Using data obtained from Companies House under a Freedom of Information Act, the figures show that 7,630 new agencies have registered since 1st January 2018. This equates to an average start-up rate of 848 per month.
By the end of 2018, the company predicts this number will stand at over 10,000 – a record-high for the sector.
Paul MacKenzie-Cummins, managing director at Clearly PR & Marketing Communications, said: “Despite the doom and gloom over Britain’s impending exit from the EU, surprisingly Brexit has served as a catalyst for industry growth rather than a hindrance.
“Since the referendum of June 2016, the number of new recruitment businesses starting up has continued to rise, with last year seeing 9,001 agencies opening their doors for the first time. And it is easy to see why.
“Record high employment is great for the economy, but it also means that talent pools are shrinking. Yet employers have vacancies to fill and the harder it becomes to find the people they need, the more likely they are to turn to recruiters to solve their recruitment challenges.
“Then there is the virtual removal of the barriers to entry for new start-ups. One legacy of the recession has been the rise in alterative finance providers, who enable agency owners to gain access to the funds they need without having to wait weeks or months before clients settle their invoices.
“Add off-the-shelf websites and cloud-based ATSs and CRMs to the equation and it is easy to see why so many ambitious consultants are opting to go it alone – the opportunities and demand are high, while the support to help them get off the ground in the first place is plentiful.”
Clearly PR has also identified the areas of the UK with the highest number of recruitment agency start-ups over the last year. The top 10 cities are:
1. London – 2,962
2. Birmingham – 1,207
3. Manchester – 128
4. Leeds – 122
5. Leicester – 81
6. Bolton – 58
7. Nottingham – 52
8. Bristol – 49
9. Berkhamsted – 44
10. Walsall – 40
One of the key challenges facing all new and established recruitment agencies is how to be seen and heard above the increasingly competitive noise. Addressing the Recruitment Agency Expo earlier this month, Paul MacKenzie-Cummins said:
“There are any number of ways to raise an agency’s brand appeal, but the first step is to understand what you want the agency to be known for and how it differs from the competition.
“Using so-called dog words such ‘innovative’ or ‘game-changing’ do more harm than good unless the agency can demonstrate how they do these things and the impact they have on clients and candidates. It is the ‘so-what’ that is often overlooked. Focus on what you are really good at and shout about it.
“Having the right content on your site is critical too. There are three kinds of visitors to agency websites – proactive job seekers, passive candidates and hiring managers. Each has their own challenges and most will benefit from having a resource to tap into to enable them to make better application and hiring decisions.
“Understanding these things and creating content in the form of blogs, guides, case studies and infographics, for example, will boost the credibility of your agency. It will also set you apart from those recruiters who are always trying to sell to everyone all of the time.
“Finally, recruiters need to get better at showing off. Most agencies we have worked with are staffed with highly skilled and experienced consultants who truly know their stuff.
“They have masses of insight and their finger on the pulse of what is happening in each sector they operate. So, tap into this rich source and use it to provide commentary to the media on the key trends taking place.”