Regional breakdown shows optimism for sector overall

A study of 1,000 UK accountants, commissioned by independent Invoice and Asset Based Lender Venture Finance, has revealed how the recruitment sector is faring across the UK's different regions. Amidst a generally optimistic outlook for the sector nationally, the research found that recruiters in the North East of England were in the best position for recovery out of the recession.

The accountants were asked to rate the extent to which their recruitment clients are under financial pressure, during the current economic conditions, using a scale of one for the most financial pressure and five for the least. Recruiters in the North East scored an average of 3.26, Scotland came second with 2.75 and Wales third with 2.68*. The overall outlook for the sector, however, was positive with an average figure of 2.63.

This result is corroborated in some of the other areas of the survey. Approaching half of North East accountants (45%) felt that the majority of their current client base could survive for up to two more years in an unchanged climate, compared with only nine per cent in the South West.

In addition, over a fifth (21%) of North East businesses are making financial forecasts on a monthly basis, compared with 37% making only six-monthly forecasts in the South West. When coupled with 80% of accountants in the North East reporting an increase in clients seeking out services such as Bad Debt Protection to shield against customer default, it suggests greater prudence may have helped consolidate the North East's position and that businesses in the region will emerge from the recession stronger and wiser.

Decreases in credit availability for recruiters from traditional sources have also helped promote awareness of other funding options. Approaching two thirds, (60%) of accountants nationally reported an increase in clients proactively seeking to learn more about alternative methods of funding. This correlates with the continued ascendance of funding options such as Invoice and Asset Based Lending (ABL), which have risen to second most popular amongst surveyed accountants' clients, being seen as robust, reliable and responsive.

Invoice and Asset Based Lending services are well suited to all kinds of recruiter, as they relieve the pressure of tight cashflow when paying staff weekly, working on a contingent basis or simply waiting up to 90 days for clients to pay for senior appointments.

Recruitment Factoring and Recruitment Invoice Discounting services provide funding against invoices as soon as they are raised. The added option of Bad Debt Protection protects against unforeseen unpaid invoices for peace of mind.

Peter Ewen, Managing Director, Venture Finance comments: It is good to see that overall, the recruitment industry is in a position to move out of the recession positively. Recruiters have certainly been at the sharp end, working to place a surplus of talent in a contracting market. However, there are cautious signs that the jobs market is picking up, and it is important to remember that there is life after a recession.

For those feeling the financial pinch, Invoice and Asset Based Lending can help bridge the cashflow gap. Of course, such funding options are not confined only to the difficult times and recruiters can flourish using flexible Invoice Finance packages, which can grow in line with a firm's success and deliver ongoing funding for growth.