The recession has cost the UK recruitment industry £1.8bn in lost profit in the last year, according to new research by market analysts Plimsoll.

David Pattison, senior analyst and author of the Plimsoll Analysis – Recruitment Agencies, says “The recession has hit the sector hard with almost half of the companies analysed in our new report making less profit than they were a year before. The bill in lost profits stands at £1.8bn.”

Pattinson continues: “With demand so subdued and the resultant competition, many companies are unable to charge the price they need to make healthy profit margins. In the absence of pricing power many companies will have to make painful but necessary cutbacks in the next 12 months.”

However, the burden of lost profit is not being shared equally, as Pattison explains that “480 companies have bore the brunt of the downturn. These companies have seen their profit margins decimated and in the absence of a big upturn in demand will have to cut their cloth accordingly”.

On the other hand, there are still companies getting it right despite the recession. “Amazingly, there are 442 companies that have maintained or increased their profit margins in the last year,” Pattinson says.

“All things considered that’s a pretty good achievement. While some of these companies made cutbacks to match their lower sales expectations, others have managed the Holy Grail – they have grown their business and increased their profit margins in a recession.”

Readers of Recruiter are entitled to a £50 discount of this new edition of the Plimsoll Industry Analysis – Recruitment Agencies. Call 01642 626400 for further details and quote reference PR/SV30.