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Recruitment industry grows as unemployment rate falls

25th April 2018

Unemployment in the UK has fallen significantly over the past five years. In February 2013, The Office of National Statistics (ONS) reported an unemployment rate of 7.8%, but since then there has been a consistent drop in the figure – which currently stands at 4.4%.

Over the same period of time there has been exponential growth in the UK recruitment industry – there are now more than 30,000 UK-based recruitment businesses, with over 5,000 new firms registered with Companies House in 2017 alone. Over 70% of the UK’s recruitment businesses were registered after 2010 and there is clear evidence of continuing year-on-year growth.

The increasing role of recruitment agencies
Whilst other factors will have played a part, it is clear that this rapid expansion in recruitment has coincided with a sharp increase in UK employment figures. Moving forward, the sector is likely to have an increasingly important role in the labour market, with the emergence of a more transient workforce in which people seek out new challenges more regularly – with recruitment agencies facilitating this process.

As well as the increasing tendency of workers to look for new challenges and career options, a number of other trends point to a continuing central role for recruiters in the UK job market:

Vacancies
Current ONS data indicates that not only is unemployment at its lowest level since 1971, there are also more vacant positions now than at any point since 2008. The number of UK job vacancies has generally been increasing over the past five years, and recruitment agencies are best-placed to ensure candidates are aware of available positions, as well as providing a fast, simple and cost-effective means for employers to fill positions.

ONS unemployment rate

ONS UK job vacancies

Part-time workers and seasonalisation
Life expectancy in the UK has reached 81.6 years, and people are tending to stay active within the workforce for much longer than would previously have been expected. Many older workers look for part-time work before taking full retirement, or take up part-time positions after retiring in order to stay busy. Other groups – such as students and parents with young children – may also have a preference for part-time, casual or contract work that can be fitted around other commitments. Such workers may struggle to find employment through conventional means, but recruiters are able to discuss a candidate’s availability and demands in order to find the best suited employment for them.

Another trend to pay attention to is seasonalisation, whereby companies take on additional labour at times of increased demand – such as the Christmas period, for example. Businesses that engage with recruitment agencies are able to fill their additional seasonal demand at short-notice without having to embark on costly and time-consuming recruitment drives.

Skills and sustainability 
Despite the rise in part-time employment, the sharpest growth has been in the number of full-time workers. According to the Recruitment and Employment Confederation (REC), recruiters helped almost 1,000,000 people to find a permanent job in 2016/17, and there has also been an increase in the demand for skilled and specialist workers. Businesses operating in technical and specialised environments need to know that they are hiring candidates with the correct level of expertise, professionalism and skills – which can be a complicated and long-winded process.

By working alongside recruitment agencies, businesses are able to streamline their hiring process, as recruiters are able to match them with appropriate candidates who have already been fully screened and vetted – allowing companies to hire new employees more quickly and in full confidence.

Going forward
Recruitment agencies bring advantages for workers and employers, providing workers with improved access to employment opportunities whilst offering time, efficiency and cost benefits to businesses. Current UK trends indicate that the role of recruitment agencies is growing, and is likely to continue to do so in the future. Agencies must make sure that they make the most of the current climate by engaging with both workers and employers to communicate these advantages effectively.

Recruiters should be mindful that the UK recruitment industry is a more crowded market than it was five years ago, but remember too that their role in the job market is more central now than ever before. As time progresses, it will be those agencies who can best demonstrate their qualities and purpose that will stand out from the crowd and succeed.