Revealed: ‘widening gap’ between rich and poor in recruitment agency land
7 August 2013
There is a widening gap between the most profitable recruitment firms and those suffering, according to research from business intelligence firm Plimsoll.
Wed, 7 Aug 2013
There is a widening gap between the most profitable recruitment firms and those suffering, according to research from business intelligence firm Plimsoll.
Just under one in five of the UK’s top 1,000 recruitment agencies are now making a loss.
Of these 191 companies, 94 are now at what Plimsoll calls ‘high financial risk’ and 79 are making a loss for the second year in a row. On average, it costs £1.03 to deliver every £1 of sales.
While Plimsoll says that it would be “easy to dismiss this [number of loss-making firms] as a consequence of oversupply, rising costs and competitive pressure”, but it appears more significant in light of the 49 recruiters that are making record profits.
More than half of these firms in the latter category, 26 in total, are operating totally debt-free.
The average profit margin at these companies is 18%, with average sales figures per employee standing at £165k.
As chance would have it, this is the same figure as the £165k gross profit per employee at legal recruitment specialist Shilton Sharpe Quarry, the top-ranked firm in our 2012 Recruiter HOT 100, sponsored by Microdec, ranking the most profitable recruitment firms in the UK.
There is a widening gap between the most profitable recruitment firms and those suffering, according to research from business intelligence firm Plimsoll.
Just under one in five of the UK’s top 1,000 recruitment agencies are now making a loss.
Of these 191 companies, 94 are now at what Plimsoll calls ‘high financial risk’ and 79 are making a loss for the second year in a row. On average, it costs £1.03 to deliver every £1 of sales.
While Plimsoll says that it would be “easy to dismiss this [number of loss-making firms] as a consequence of oversupply, rising costs and competitive pressure”, but it appears more significant in light of the 49 recruiters that are making record profits.
More than half of these firms in the latter category, 26 in total, are operating totally debt-free.
The average profit margin at these companies is 18%, with average sales figures per employee standing at £165k.
As chance would have it, this is the same figure as the £165k gross profit per employee at legal recruitment specialist Shilton Sharpe Quarry, the top-ranked firm in our 2012 Recruiter HOT 100, sponsored by Microdec, ranking the most profitable recruitment firms in the UK.
- The 2013 HOT 100 is due to be published in the November edition of Recruiter.
