Top Performers force others to raise their game

A staggering 97% of last yearís sales growth in the UK recruitment agencies industry went to just 267 firms, according to a new analysis of the market by leading industry commentators Plimsoll Publishing.

The flipside of the coin is that many others are struggling to survive in an atmosphere of declining sales and increasing debt, with at least 100 staring failure in the face.

The assessment confirms that constant rounds of consolidation are creating ìsuper companiesî that are exerting an increasing control over the market. Most of the companies in question are large, with sales over 10m. But 86 have sales of less than that ñ an indication that it is not simply a case of smaller firms being squeezed out.

The just published research includes an individual analysis of 1000 companies in the recruitment agencies sector and shows the impact these increasingly powerful companies are exercising in the market.

David Pattison, senior research analyst,commented. ìLooked at separately these 267 super companies are great news for the industry. Yet the reality is much more disturbing. These companies are forcing such intense competition that others are battling for survival.î

He added: ìUnless some of the worst performing companies start to come to terms with the financial implications of flat or declining sales, they will go bust or be forced to sell up. It really is a time of either joy or tears. The market hungry will use this analysis to seek out companies to approach and buy. For the others, desperate to sell, itís a case of finding a buyer.î

Among the 733 other companies covered in the analysis:

177 firms are caught in the retreat, despite efforts to control their costs, reduce staff numbers or sell off some investment. So far this has had little impact on their ability to stay in the market.

195 of the worst affected companies saw sales decline by an average of 13% in one year. As a result, more that half of these lost money because extra costs could not be passed on into sales.

100 of these firms are working under such an escalating debt burden that the likelihood of failure must be considered extremely high.

The full analysis contains an individual profile of each of the UKís top 1000 recruitment agencies companies. It shows at a glance the impact the changing marketplace is having on each company.

Readers of this magazine can obtain the full report for 300 ñ a discount of 50 ñ by quoting the code PR01 when ordering online at www.plimsoll.co.uk, by calling 01642 626400 or by emailing c.sherwood@plimsoll.co.uk.