A group of lean, fit and relatively small companies are taking the recruitment industry by storm and showing the bigger players how it’s done, according to a report by business analysts Plimsoll Publishing.

It says these companies are reporting increasing sales at three times the rate of their larger competitors, are delivering for times the profitability, and are showing five times the return on investment.

Plimsoll says price deflation is hitting the bigger companies where it hurts – in their pockets. It found that at 19 of the top 200 recruitment agencies are losing money, while 30 are making less profit than last year. Salaries alone at the top 200 recruitment agencies eat up 13% of sales, in general they pay their staff more and are less productive, it found.

However, Plimsoll says the new kids on the block are nimbler, slicker and more efficient. Senior analyst, David Pattison, says: “19 of the bigger companies are displaying symptoms of extreme tiredness. But the big companies are desperate not to miss out on the new profit and growth areas, so they are busy hunting down the emerging firms.”