- The global recruitment market grew at an impressive compound annual rate of 7.4% over the five years through 2020 to £13.9bn.
- In 2019 the market grew by 5.5%; a gradual deceleration over the last couple of years, but against a growth forecast of 2.8% for the year.
- The number of global M&A deals has increased by 17% with US deals rising from 17 in 2018 to 41 in 2019, overtaking the UK to rank No. 1 for M&A activity.
- The number of UK transactions declined from 2018’s six-year high of 32 to 25 in 2019.
- Overseas investors account for 16% of UK deals last year compared to 25% in the previous 12 months
The report revealed that technology-related deals accounted for 23% of all transactions.
The report also highlighted the market dynamics, which have led to a slight slowdown in sector deal activity in the UK. Unemployment rates reached a 44-year low in March 2019 but began to rise again against the UK’s political and economic backdrop of a prolonged period of uncertainty in 2019, with moving Brexit deadlines.
In 2020, the UK industry revenue is expected to grow marginally at 4.4% and at a compound rate of 1.1% in the next five years with the main growth drivers including people seeking to switch roles to advance their careers and an increase in demand from the public sector.
James Fieldhouse M&A Managing Director at BDO LLP explained: “The recruitment sector has remained resilient and attractive to investors despite economic uncertainty. There’s a real appetite for recruitment businesses innovating with technology or providing specialist expertise and serving a niche part of the market. Considering the fact that globally the number of deals in the sector rose in 2019, I expect that a return to more certainty in 2020 should spark more UK deal activity. We’d also expect to see a renewed interest in the sector from private equity investors with high volumes of dry powder looking for quality assets.”