Almost a quarter of UK recruiters are ending the year in financial difficulty, according to a report from Plimsoll.

The 2011 edition of the ‘Plimsoll Industry Analysis’ shows that 243 companies in the market are finishing the year in financial trouble.

David Pattison, author of the new study of the top 1,000 UK recruitment companies, says: “Having clung on through the bad times many of these struggling companies are running out of time and will fail unless a sustained recovery takes hold. On the flipside, their demise will bring a welcome reduction in competitive pressure for those left.

“We have picked 514 strong companies that prove success can still be achieved in the recruitment agencies industry, despite difficult trading conditions. They also prove that bad companies fail in a recession; good companies simply do not. These companies will lead the industry out of recession with some smart acquisitions to help maintain their recent success.

“With too many companies chasing weakened demand it is inevitable that there are likely to be a number of high profile mergers and takeovers. Further consolidation is needed to sort out the remaining dead wood. We have named 22 companies as the best acquisition prospects in the market.

“There are a group of 92 serial loss makers still operating in the market. For the second and even third year running these companies have made a loss. While the rest have taken painful but necessary decisions to refocus on the bottom line, these reckless companies have continued to chase sale regardless. These companies have to cut their cloth accordingly or face the consequences.”

The 2011 edition of the Plimsoll Industry Analysis is available now. Recruiter readers get a £50 discount if they call 01642 626400 and quote reference PR/AA10.