While the positive signs around revenue growth continue, this has not increased confidence sufficient for recruiters to start their own recruitment campaigns, according to BDO’s review of the latest outputs from Recruitment Industry Benchmarking (RIB).

For the third consecutive month, overall turnover has increased in comparison to the equivalent period in 2009. Given the previous falls experienced, and in particular with April and May 2009 being more than 30% below their equivalent periods of 2008, growth from this low point may not be difficult but nonetheless it provides a signal that the recruitment sector in UK has turned the corner.

It is still too early to draw any conclusions on whether temporary or permanent placements have led this growth. However, these small shoots of recovery are much needed by an industry that has probably felt the effects of the economic downturn most keenly.

Given that the largest expense any recruiter has is its people, then this area has inevitably been where the actions to rationalise cost have been most severe.

Reviewing the data around the people employed in the industry highlights two factors:

• The number of employees reduced by around 25% during 2009
• The numbers of employees in July and August 2009 were more than 30% below the equivalent period in 2008.
• Returning confidence to the sector is encouraging for UK plc when reviewing employment prospects for two reasons:
• The sector is a major employer and therefore contributor to the UK economy
• It provides an indication of the state of employment in other sectors and the wider economy.

The average length of tenure of recruiters shows an overall increase in length of service from around 30 months for 2008 to over 40 months for the past 12 months. This is due to the following factors:

• Reduction in the number of graduates or ’new-to-the-sector people’ recruited on training programmes
• Previous new recruits finding it difficult to meet challenging targets and leaving the industry having completed training programmes but not able to fully develop their skills
• Where staff reductions have been required, experienced billers with mature desks are most likely to be retained compared to new, less experienced people.

While these decisions made good commercial sense in the short term, where preserving cash and the business has been the primary driver, it does mean that this will create new challenges when planning for growth. As growth continues over the coming months will recruiters have the confidence to recruit additional staff and if they do, at what level?

It looks likely that the cost base for recruiters will increase in one form or another. Experienced recruiters will be less prevalent and can therefore command premiums to their salaries. This will come from them being tempted away to new employers or result in current employers having to offer more lucrative packages to stay. While there is a growing pool of graduates and new-to-the-sector people available for work, the cost of taking on these people requires significant investment:

• Primarily in training programmes where it should be assumed that they are unproductive for at least six months and only paying for themselves from this point
• Diverting experienced resource to train, mentor and manage the new recruits by taking them away from winning new clients and managing current ones.

While the challenges experienced over the past two years may have now eased, it is likely that recruiters will have equally demanding decisions to make regarding who to take on, how much to pay them and how to keep hold of the experienced recruiters as we exit the recession.

Key indicators
UK employees in recruitment industry
The number of people employed in the industry to March 2009, according to the Recruitment & Employment Confederation (REC), was 95,867 (which was down 12% on the peak that occurred during 2007/08). Additionally, the sector was also a large recruiter itself, although the general assumption is that there is a high staff churn during the induction programmes (usually the first six months of employment) as people decide that this is not the career for them
Average tenure of recruiters
There is an overall increase in length of service from around 30 months in 2008 to more than 40 months for the past 12 months Recruitment Indu

Christopher Clark, corporate finance partner, bdo
Crawfurd Walker, director, recruitment industry benchmarkingRecruitment Industry Benchmarking (RIB) provides its members with bespoke monthly comparisons of their performance on key industry measurements