The UK Recruitment Consultants Market Development Report

Published by Market & Business Development Ltd

After researching the UK Recruitment Consultants Market Development and taking into account various other factors the following major conclusions can be drawn from MBDís report.

Market Review 2003 - 2007
In 2007, the value of the UK recruitment consultants market is believed to have increased by 6% to an estimated 28.11 billion, consolidating earlier growth achieved between 2004 and 2006. Annual levels of growth peaked at 7% in 2004, taking the market value to 25.24 billion, reversing the downward trend evident in the previous year, when a 5% decline was recorded. This decline was partly attributable to slow economic growth and a lack of consumer confidence. Demand for recruitment consultants is believed to have increased by a cumulative 19% during the review period.

Market Forecast 2008 - 2012
Between 2007 and 2012, the UK market for recruitment consultants is expected to demonstrate year-on-year growth, culminating in an overall real term increase of 15% to 32.42 billion (at 2007 prices) in the latter year. Annual growth rates are anticipated to remain relatively stable,
oscillating between 2% and 4% during the forecast period. A certain level of maturity is apparent in the market, which is reflected by moderate growth levels expected between 2008 and 2012. Furthermore, increased legislation in the market is projected to increase operating costs and lead to greater consolidation within the industry.

Temporary Placements Expected to Account for 90% of Recruitment Consultants Market in 2012
In 2012, the value of temporary placements is expected to increase by 3% in real terms, reaching 29.14 billion (at 2007 prices), accounting for a projected 90% of the UK recruitment consultants market during the year. Overall, the value of the sector is anticipated to increase by 16% in real terms compared with 2007. The continued emphasis on flexibility in the workplace is likely to sustain demand for temporary placements. With an increasing number of companies operating so-called lean employment policies as a cost reducing measure, these companies will continue to be exposed to short-term fluctuations in labour demand either on the supply or demand side which is needed to be met with temporary placements. Despite this change in the structure of employment, the sector will nevertheless continue to be more exposed to economic cyclical variations. The market also remains exposed to changes in employment related legislation and changes in costs such as IR35 will threaten to alter the cost benefit of using temporary and contract workers. A further factor restricting the rate of market development is likely to be continued pressure on rates in the industry, exacerbated by new market entrants, virtual agencies and general over-supply in the market. Towards the end of the forecast period, the sector is likely to benefit from the 2012 London Olympics, which will generate demand for temporary placements.

Value of Permanent Placements Projected to Reach 3.28 Billion in 2012
Demand for permanent placements is expected to increase by 10% in real terms between 2007 and 2012. In the latter year, the sector is projected to demonstrate real term growth of 1% to 3.28 billion (at 2007 prices). The expected growth potential in the sector is a reflection of both the less developed nature of the market and the impact of the increased awareness of virtual agencies, albeit at the expense of placing greater pressure on rates.