This Key Note Market Report examines the UK market for permanent recruitment agencies, which includes firms engaged in general and executive permanent appointments. The market is segmented into the following recruitment sectors: blue collar, computing/IT, drivers, education, financial, hotel/catering, nursing/medical, professional/managerial, secretarial/clerical and technical/engineering. More than a quarter of the placements in the market are for secretarial and clerical appointments, while computing/IT and financial appointments represent more than 10% each.
According to figures from the Recruitment & Employment Confederation (REC), in the year to March 2005, the market was worth £3.21bn and the number of appointments was 654,203. Both figures represent massive increases on the previous year's figures from the REC. However, the figures for the year ending March 2005 cannot be compared directly with those of previous years because the methodology used to compile the figures has been changed. While there has indeed been a rise in the value of this market, it would seem that the latest figures overstate the increase. From March to December 2005, the market continued to perform well. In fact, for some small firms, the last 2 months of 2005 were their best since 2000.
The major firms include Adecco Holdings (UK) Ltd, Brook Street (UK) Ltd, Carlisle Group PLC, HR GO PLC, Hudson Global Resources, Michael Page International PLC, Pertemps Recruitment Partnership Ltd, PSD Group PLC, Robert Walters PLC, SThree PLC and Whitehead Mann Group PLC. Most of the industry is UK owned.
The growth in the market and the improved profitability triggered a significant rise in mergers and acquisitions during 2005. Companies that specialise in executive search reported very strong growth during the year, although a few of these firms did not benefit from the improved market conditions as much as their rivals. Although the market has improved, it appears to have become more competitive. One difficulty experienced by almost all recruitment firms has been a shortage of good candidates.
Key Note forecasts that the market will drop in value in the year to March 2006, before resuming a steadier pattern of growth thereafter. This forecast is based on the assumption that the UK economy will grow by around 2% in 2006. Much will depend on what happens to the UK and the EU economies as a whole in 2006, in particular whether interest rates will be reduced.
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