2014 Recruiter HOT 100: HOT 10 technical recruiters from mainly engineering and scientific sectors
Wed, 12 Nov 2014
Today we reveal the last in our series of HOT 10 breakouts, the HOT 10 technical recruiters from the 2014 Recruiter HOT 100 list.
A supplement with the November issue of Recruiter features the 2014 Recruiter HOT 100, the ninth 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 (NFI).
Conducted on Recruiter’s behalf by Agile Intelligence, the 2014 HOT 100 is supported by Anderson Group and RBS.
Massive infrastructure projects such as Crossrail and HS2, long-term nuclear power projects, a strong automotive resurgence and ongoing defence commitments are improving prospects for the domestic technical engineering sector.
This category continues to grow and is far from being dominated by the oil & gas industry. Infrastructure, marine, defence, aerospace and automotive are all robust, while construction has begun to recover from a sharp downturn.
The HOT 10 is comprised of five very large firms and five much smaller ones. Employee numbers range from 38 to 514. The top two, NES Global Talent and Swift Technical Group, plus Fircroft Engineering Services (fifth) and Air Energi Group (ninth) are mainly (but not all) oil & gas/energy recruiters; together, they produced the best growth in the HOT 10, mostly well above 20% on both sales and gross profit (GP/net fees).
Scientific sectors, such as life sciences, are also offering opportunities for several HOT 100 players, generally as second or third specialities.
- The 2014 HOT 10 technical recruiters represent £3,122m sales turnover, ahead 22.3%, and around £322m in GP, ahead 21.7%, in this highly competitive sector. Sales for this HOT 10 grouping have risen well in excess of 20% for at least four years. The large oil & gas element will include substantial overseas placements and an element of project solutions may be involved too, but the overall trend is still undeniable.
- GP rose by another very impressive 21.7% year-on-year, with GP/head growth of 5.2% alongside a 15.7% increase in headcount to 2,602. Average GP/head totalled £123,720. Market growth combined with the high average placement value of professional engineers is offset by very low contract margin and similarly low proportion of permanent business for most of this HOT 10.
- NES Global Talent, big in oil & gas and also significantly active in other engineering markets such as power, rail, aerospace and automotive, again takes pole position, followed by global oil & gas specialist Swift. With Fircroft and Air Energi, these four companies all benefit from substantial overseas interests and expertise while operating in a market where candidates are notoriously scarce.
- The other HOT 10 companies each have their own technical specialities and are mostly UK oriented. Matchtech Group is the largest of the whole-spectrum engineering sector specialists; its close to 18% GP growth is all the more impressive since it is almost entirely derived from within the UK. NRL’s growth is boosted by the inclusion of its acquisition Petrolic, and it is now building its own base in the oil & gas marketplace. CBSbutler includes more permanent business and offers wider scientific skillsets.
- Staffgroup reported 24% sales growth as it rapidly expanded its offer across mainly the technology. finance, oil & gas, mining and power sectors through its Eurostaff and Earthstaff divisions. A significant permanent market presence, a growing energy business and substantial overseas placements – especially in Europe through its three offices in Brussels, Berlin and Amsterdam – have enabled it to become a regular feature in the HOT 10.
- Along with the continued rapid expansion in sales and GP, six out of the HOT 10 increased their GP/head and four of these companies also increased both employee numbers and productivity. Seven out of 10 firms increased their headcount – Roevin Management Services, CBSbutler and Coyle Personnel did not.
Turning to gross margin trends
- Average weighted gross margin for the 2014 HOT 10 fell 10 basis points to 10.3%. Three of the HOT 10 still have gross margin below 10%.
- Three HOT 10 companies reported increases in gross margin – Swift, Matchtech and Coyle.
- The sector remains predominantly contractor driven with its project-based profile – Staffgroup has the largest ratio of permanent business in this HOT 10.
- For the complete Hot 100, see November’s issue of Recruiter out this week.