Tony Reeves, the chairman of AIM-listed recruitment firm Hot Group, has made some damning predictions about the future of the temporary agency market.

Reeves believes that more and more temporary recruitment will move online as clients look for cost savings and, consequently, many high street agencies will not be able to support the same numbers of branches as they have in the past.

Much of the work that temporary consultancies do in branches – such as testing candidates and checking their qualifications – could be done cheaper and quicker over the internet, he argues.

“Temporary recruitment will increasingly go online for both candidates and clients,” said Reeves. “If you’re online you can do it all.”

Unless temporary agencies could justify a wide network of branches with increased levels of permanent recruitment, Reeves added, they would not be able to maintain the “saturation” approach of opening up more branches.

“The numbers game has gone forever,” he said. “There will be fewer large branches where it’s important to be closer to the client, or where you’re supplying permanent staff as well.”

Reeves believes that ultimately clients will use a mixture of online and traditional recruitment. Hot Group bought graduate recruitment site The Graduate for just over £400,000 earlier this month.

•Recruiter will profile Hot Group’s founders – Tony Reeves and Harvey Sinclair – in our 4 February issue.