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2013 HOT 100: HOT 10 technical recruiters revealed

Mon, 11 Nov 2013
HOT 10 Technical Recruiters
Nineteen technical specialists are included in the 2013 HOT 100 compared with 14 last year, offering even stronger evidence of the resurgence in engineering, especially but far from exclusively servicing the oil & gas industry.

Conducted on Recruiter’s behalf by Agile Intelligence, the eighth edition of the HOT 100 is sponsored by Flo Software Solutions, supported by RBS, and published in this week’s November edition of the magazine. It provides a league table of the UK recruitment sector’s most efficient companies, as measured by gross profit per head.

Technical specialists have also migrated up the rankings, as gross profits across the sector rose strongly with good demand for contractors in the UK and often much higher demand overseas.

The HOT 10 again comprises four very large recruitment firms and four relatively small ones with Advantage Resourcing and Coyle Personnel, both mid-sized. Employee numbers range from 55 to 439.

HOT 100 logo
The top three are heavily biased towards oil & gas recruitment and both NES Global Talent and Fircroft Engineering Services have experienced substantial growth in the past few years, driven by both global demand and rising skill shortages.

In addition in the UK several large infrastructure projects are planned or under way with rail, nuclear and defence all contributing to these companies’ performances and the prospects of the technical engineering sector.

Spin-off sectors, such as life sciences and other scientists, are less in evidence in this HOT 10 but are generating growth for several HOT 100 members. Purely Construction recruiters are not included in this breakout group.

North Sea oil field
  • The 2013 HOT 10 Technicals represent £2.4bn sales turnover, 21.2% higher than last year, and around £240m in gross profit in this highly competitive sector.  Some companies may include a project solutions operation but most here will major in traditional recruitment or managed services.
  • Gross profit (net fees) rose by another very impressive 23.7% year on year, with GP/head growth of 4.2% alongside an 18.7% increase in headcount to 2,005. Average GP/head totalled £119,899, second only to the HOT 10 Professionals group. These levels indicate not only the growth of the market but also the high net value of individual placements. Nevertheless, this is a notoriously low margin market, and operating efficiencies need to be optimal if profit is to convert to the bottom line.
  • New leader NES Global Talent, while very much a global player, does have a greater UK presence than did last year’s leader, Swift Technical Group, and also has a broad engineering portfolio servicing several industries including power, rail, aerospace, and automotive. The same is true for Fircroft, and with gross profit growth rates this high (NES +38%; Fircroft +30%) it is no coincidence that both companies (along with others in the sector) have successfully sourced new private funding in the past two years.
  • Besides third-placed Swift, Air Energi – again at fifth – is the other pure play oil & gas specialist, reporting growth near to 35%.
  • Each of the other HOT 10s have their own technical specialities and some, such as CBSbutler and NRL, are more UK-dependent while CBSbutler does have more presence in the permanent market, illustrated by its higher margin.  
  • Sales growth rates vary, though, with Staffgroup and First Technical above 30% whereas Advantage fell more than 5%.
  • Staffgroup at sixth is the parent of Eurostaff and Earthstaff and it has by far the largest gross margin of the HOT 10, driven by its relatively high permanent mix versus its peers. Permanent fees rose sharply and account for almost 39% of gross profit. It operates from offices in London, Brussels, Berlin and Amsterdam and recently extended its reach into Iraq. With strong growth rates, Staffgroup is quickly expanding into a significant player in its key markets.
  • With such rapid expansion, only four out of the HOT 10 increased their GP/head and just three companies also increased both employee numbers and productivity simultaneously. Nine out of 10 firms increased their headcount – only Advantage contracted. Every single company increased its gross profit.

Turning to gross margin trends:

  • Average weighted gross margin for the 2013 HOT 10 rose 20 basis points to 10%. Four of the HOT 10 still have gross margin below 10%.
  • Four HOT 10 companies reported increases in gross margin – NES, CBSbutler, Advantage and Swift.
  • The sector is predominantly contractor-driven - Staffgroup, Coyle and CBSbutler have the largest permanent business mixes, probably in that order.

The HOT 10 technical recruiters
1.    NES Global Talent
2.    Fircroft Engineering
3.    Swift Technical Group
4.    NRL
5.    Air Energi Group
6.    Staffgroup
7.    Advantage Resourcing UK
8.    CBSbutler
9.    First Technical
10.    Coyle Personnel

  • Check out more HOT 100 coverage online and in print this week from Recruiter.
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