Recruitment Industry Information

Often trainee recruitment consultants are asked to prepare a presentation on the recruitment industry and the economic factors that influence it.  We thought it would be helpful to pull together some facts for you.  On the links page in our About Us section there are other useful websites about the recruitment and resourcing profession too.  But come back to us!  The recruitment industry is changing all the time so please don't hesitate to ring/email us for specific information and we will try and point you in the right direction.

1. Size of the Recruitment Industry

The UK recruitment industry was valued at c £2 billion in 1992.  In the most recent published survey by the REC Industry Research Unit in association with the Recruitment Finance Division of Lloyds TSB Commercial Finance and Recruitment Consultant magazine, key findings from the survey reveal:

• A record total industry turnover of £26,673 billion, up 7.3% on 2005/06.
• Overall turnover for temporary/contract staff rose to £23,158 billion and turnover for permanent staff rose to £3,541 billion. This represents another strong performance following on from the 6.4 per cent increase to £21.6 billion the previous year.
• Staff employed in the recruitment industry rose from 97,674 to 101,286 – an increase of 3.6%.

In the period covered in the report – April 2006 to March 2007 – the overall turnover from both permanent and temporary/contract recruitment rocketed to this all-time high of £26.673 billion compared to £24.838 billion in the previous year. The 7.4 per cent growth it represents is the highest increase ever since the report was first compiled in 2001/02.

The survey estimates that the recruitment industry places 1.377 million temporary and contract workers every week. This is an increase on last year but does not reach the peak of 1.516 million recorded in 2003/04.

Of these temporary placements, 22 per cent were in industrial and blue collar posts,  18 per cent were secretarial/clerical and technical/engineering represented 11 per cent.

Offsetting this was the record level in the number of permanent placements which increased a huge 11.5 per cent to a new record level of 787,280. The turnover from permanent business for the same period rose by 7.3 per cent to just over £3.5 billion, which represented 13.2 per cent of total industry turnover.

There has also been a significant turn in the number of staff employed in the industry. With recruiters slimming down the non-sales areas of their operations, the 2005/06 survey results indicated a 1.6 per cent decrease in the overall headcount to 97,674.

But the 2006/07 survey highlights a 3.6 per cent increase to 101,286 staff. Included in this figure is the number of consultants who work solely on permanent business which has increased dramatically at the expense of those consultants in temporary/contract work.

Average branch sales from permanent business increased slightly over the period to now stand at £232,132 with the biggest gains being made by small multiples with two to nine branches and single operators.

Paul Saunders, Director of the Recruitment Finance Division, Lloyds TSB Commercial Finance, said: "The strong market conditions we saw in the last half of 2006 and the beginning of this year have contributed to the record turnover.

"This is evidenced by the increased number of temporary placements in computing/IT which can be linked to compliance projects such as MiFID, whilst the 5 per cent increase in demand for technical/engineering temporary workers reflects major works such as Heathrow Terminal 5 and the new international terminal at St Pancras.

"Large scale projects such as CrossRail and the Olympic Games in 2012 will continue to fuel the recruitment industry's future growth. Recent financial market turbulence has not been fully played out and will create opportunities as well as challenges over the next year."

2. Salary and Benefits in Recruitment

The REC  has published the full results from its 2007 Annual Salary & Benefits Survey.  The annual report, produced in association with leading accountants Saffery Champness and Recruiter magazine, paints a picture of an industry with high levels of employee satisfaction, competitive remuneration packages and increasing professionalism; in short an ideal career destination for any bright, committed candidate seeking a demanding but rewarding career.

This year, the survey focused on five key sectors for the industry namely Education/Teaching, Hospitality/Catering, Construction, Technical/Engineering and Driving.  It found that basic average salaries across these sectors are £23,752 for consultants and £30,794 for managers. 

These rise to £32,012 for consultants and £42,125 for managers when bonus and/or commission payments are included. Around this average, there is significant variation with the potential for high flyers to earn six figure sums. 

(note: Most of Perriam and Everett's clients and candidates work within executive recruitment where salaries are higher.  Generally a recruiter's pay mirrors the candidate pool he or she represents – like attracts like.) 

The survey reported that employees within recruitment also receive competitive benefits packages and are given good opportunities for professional development from their employer.  Not surprisingly, job satisfaction levels are strong at 78 per cent suggesting that high average staff attrition rates (31 per cent) relate more to the structural nature of the job rather than malcontent.

Commenting on the findings, Roger Tweedy, REC's Director of Research noted:  "This year's results show that working in recruitment has become an attractive option for many seeking a career in a successful, vibrant and increasingly self-confident industry.  Recruiters these days are increasingly well qualified with over a third holding a degree and a further one in ten holding a post-graduate qualification.   

"As in other areas of the economy, the war for talent in recruitment is very real at the moment and intensifying all the time.  The demand for high quality recruitment consultants is huge and I hope that these findings will encourage candidates into the industry from other areas of the economy."

More detailed information is available from the REC's Industry Research Unit, including its Annual Industry Turnover and Key Volumes Survey.  (www.rec.uk.com/research).  We would like to thank them for providing us with these summaries for your benefit.  If you have any more questions about our sector, please email aisling@perriam-everett.co.ukand she will do her best to help you.