2013 HOT 100: HOT 10 professional recruiters revealed

The November issue of Recruiter will feature the 2013 Recruiter HOT 100, the eighth edition of the benchmark league table of the UK recruitment sector’s most efficient companies, as measured by gross profit (GP) per head, or net fee income.
Tue, 12 Nov 2013The November issue of Recruiter will feature the 2013 Recruiter HOT 100, the eighth edition of the benchmark league table of the UK recruitment sector’s most efficient companies, as measured by gross profit (GP) per head, or net fee income.

Conducted on Recruiter’s behalf by Agile Intelligence, the 2013 HOT 100 is sponsored by Flo Software Solutions and supported by RBS.

Today we reveal the third of our four HOT 10 breakouts, the HOT 10 professional recruiters from this year’s HOT 100 list. The breakout for IT & telecoms recruiters will be published on recruiter.co.uk tomorrow (13 November) and the full list appears in this week’s November edition of Recruiter.

HOT 10 Professional Recruiters
This group covers the main professional candidate segments – accounting, finance, legal, HR, sales & marketing, media and so on – and now accounts for 31 (34 last year) of the whole HOT 100.

Previous post-downturn expansion, quite aggressive in some quarters, has still failed to yield any aggregate return. Most of these companies took a much more cautious approach during this past year, although the wide range of specialities makes for diverse approaches and outcomes. The reversal in GP/head seen last year has been repeated overall as markets remained subdued.

Finance is well represented in the HOT 10, with insurance again boasting three niche players plus four other diverse financial services or accountancy specialists. Again Shilton Sharpe Quarry (SSQ), the sole legal almost entirely permanent specialist, is highly placed together with the interim/executive search firms, Green Park and Odgers (Group). Three companies are predominantly in permanent placement, while the rest are a diverse mix.

Key facts about the HOT 10:

  • HOT 10 represents £277m in turnover, generating £130m in net fees.
  • The sector’s financial ‘majors’ have moved further down the rankings, giving way to smaller competitors. Badenoch & Clark drops to 43rd, while Michael Page eases to 47th and Robert Walters to 83rd. Morgan McKinley and insurance specialist IPS both exit for this year, as accounts were still not filed as we went to press.   
  • Net fee growth among the HOT 10 barely changed, up just 1.1%. Average GP/head declined 2.5%, indicating a fragile situation. This has failed so far to reflect any incremental benefit from last year’s substantial expansion in the workforce.
  • Over two years, headcount has risen 20% but GP/head has dropped 22% for these HOT 10 companies.
  • Seven companies are common to the previous year, while Eames returns, along with newcomers Odgers and SystemsAccountants.
  • The three insurance specialists – Oliver James Associates (OJA), Eames Consulting and High Finance (UK) – have moved in opposite directions, with OJA continuing with rapid expansion while its peers either stabilised or contracted headcount. However, lower earners may have been replaced by fewer but higher-generating fee earners.
  • Five out of the 10 expanded their workforce. Seven increased GP but only two – Green Park and SystemsAccountants – simultaneously expanded GP/head and employee numbers. Five companies saw GP/head contract – Investigo, OJA and Odgers with rising headcount – but Walker Hamill and Sheffield Haworth have both seen GP contract in challenging markets.
  • SSQ has again retained top spot in this category, with a 7.6% rise in net fees produced by slightly fewer average staff over the year. This enabled a 12.2% rise in GP/head to £184,519. It retains its 100% focus upon legal recruitment and is a prime example of a company finding its niche, sticking to it and expanding geographically rather than by diversifying its sector coverage. It opened a Hong Kong operation and also has subsidiaries in Italy and Spain together with branches in Germany and France. In October 2012, the firm created a dedicated contracts business within the group – although this remains very small relative to group fees. It has also opened offices in Mainland China.

Turning to gross margin trends:

  • SSQ and Sheffield Haworth are almost wholly permanent recruitment firms. Odgers and Walker Hamill each have a very high permanent bias.
  • All the Hot 10 have some sizeable permanent business but SystemsAccountants is probably the most temporary based, mainly placing accountants with additional IT skillsets. Its margin erosion suggests a shift here in the mix towards temporary business. Green Park, with substantial public sector business, is perhaps similarly biased in its mix with interims but saw margin rise, perhaps implying a perm shift here.  
  • Average gross margin at 46.9%, a drop of 330 basis points, was driven by some sharp falls at Odgers, SystemsAccountants and High Finance (UK) as mix changed there, too.  

The HOT 10 professional recruiters are:
  1. Shilton Sharpe Quarry
  2. Green Park
  3. SystemsAccountants
  4. Oliver James Associates
  5. Odgers (Group)
  6. High Finance (UK)
  7. Eames Consulting
  8. Walker Hamill
  9. Sheffield Haworth
  10. Investigo

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