Massive congestion amongst the UKís largest Recruitment Agencies companies is putting unprecedented pressure on the managers of these companies to keep their companies in the market, says a new study by Plimsoll Publishing.
Don't miss the Online Recruitment Exhibition - Come and see some of the suppliers who can streamline your recruiting efforts. View the Exhibitors here. Complete this enquiry form and a member of the Onrec.com team will be in touch.
The study found that the UKís largest 200 companies now control 77% of the market, an increase from 73% 2 years ago. As a result, these major companies are fighting each other headlong in a battle for market share. The latest results leave us in no doubt that this is having a huge impact on their financial performance.
Of the 200 Recruitment Agencies companies surveyed:
- 47 of the companies are showing no sales increases at all
- 41 are selling less than they were 2 years ago
- 123 companies have failed to increase sales at the same rate as their investment.
- 109 companies increased their debts simply to hold their place in the market.
David Pattison, senior analyst with Plimsoll, comments: ìThe recent slow down in the UK economy will only accelerate a long standing problem in the market. Following the last few years which have been largely profitable, business leaders have been keen to invest heavily, and in turn have borrowed heavily. Yet due to the turbulent economic climate of 2008 they are seeing very little by way of return. This ambitious investment strategy has left some companies in severe financial danger, and as a result 21 companies have been awarded a danger rating in this study as result of their failing business strategy.î
Pattison continues ìThe consequences are serious; these companies need to have serious rethink when it comes to their business models. Itís likely that jobs will be lost and key projects could be cancelled in an attempt to control the spending- but for some companies it could well be a case of too little, too late.
Itís likely that the management at some of these companies could be changed to accelerate the cutback process, as itís a lot easier for new managers to come in with a clear remit and instigate these tough decisions. The other obvious option is that some of these businesses will be sold off.î
Supporting the opinion for a sell off, the full 544 paged analyses suggests that the value of these 200 companies has fallen by around 40% in the last 12 months. Plimsollís report identifies the companies who are prime potential acquisition targets.
Pattison continues, ìDespite the turmoil in financial markets, there is no doubting this is an ideal opportunity for the more visionary leaders in the market to steal some ground on their competitors by buying up one of these weakened players. Itís a great time to go on the offensive- if you have the cash reserves to do it without placing your own business in jeopardy.î
The complete Plimsoll 200 Recruitment Agencies Analysis offers a full industry overview and analysis of each of the UKís 200 largest Recruitment Agencies companies. Copies of this analysis are available for 500 by calling Clair Sherwood on 01642 626422 or emailing c.sherwood@plimsoll.co.uk. Readers can get a 100 discount when quoting PR05.
Managers face tough decisions as market slows
.
