2014 Recruiter HOT 100: HOT 10 professional recruiters revealed

Today we reveal the second of our Recruiter HOT 10 breakouts, the HOT 10 Professional Recruiters from this year’s HOT 100 list.

Thu, 6 Nov, 2014Today we reveal the second of our Recruiter HOT 10 breakouts, the HOT 10 Professional Recruiters from this year’s HOT 100 list.

A supplement with the November issue of Recruiter will feature the 2014 Recruiter HOT 100, the ninth edition of the benchmark league table of the UK recruitment sector’s most efficient companies, as measured by gross profit (GP) per head, or net fee income (NFI).

Conducted on Recruiter’s behalf by Agile Intelligence, the 2014 HOT 100 is supported by Anderson Group and RBS.

Tentative recovery might be the best way of describing the performance of the HOT 10 professional recruiters, as they enjoyed a year of steady if slow progress.

Despite confidence remaining low, and visibility about future growth and earnings prospects limited, these companies saw something of a turnaround in growth profit and productivity, albeit at far lower rates than seen in the other HOT 10 categories. 

This group covers the main professional candidate areas – including accounting, finance, legal, HR, sales & marketing – and now accounts for 30 against 31 last year of the Recruiter HOT 100, as the decline in numbers of recent years slow further.

The HOT 10 represents £233m in turnover, generating £130m in net fees.
Net fee growth among the HOT 10 performed better than in the previous year, with a gain of 5.7% and average GP/head added 1.8% to reach £138,672. Although headcount was expanded by 3.9%, these growth rates remain subdued, no doubt reflecting the market in general as it stood in calendar 2013.

Improvements are now being cited in 2014 company results statements, although still not across all industries or functions, and they should still feed through to better growth for the 2015 HOT 10 professionals and their industry peers.

Companies are adding specialisms, with two spanning several categories in addition to three executive search/interims, two purely finance, two purely insurance and one legal supplier. Seven companies have significant permanent business while the rest are a diverse mix. Here is the summary of findings:

  • The sector’s financial majors dropped further down the rankings, but smaller competitors have edged upwards. PageGroup sits at 56th, Badenoch & Clark is now 59th and Robert Walters is 92nd in the HOT 100. Morgan McKinley is again excluded as its accounts had not been filed as we went to press.

  • Seven companies remain, alongside newcomers Interim Partners, The SR Group and Black Swan Associates. Among those not included in the HOT 10 but still well placed in the HOT 100 are Oliver James at 46, whose expansion of recent years has yet to yield return, and Investigo at 26. Sheffield Haworth was omitted as it was a little late filing.

  • There are three insurance specialists – Black Swan, Eames Consulting and High Finance – but the line is blurred now with some insurance business for The SR Group, alongside finance, legal and other professional functions.

  • Eight out of the 10 expanded their workforce (although they did so marginally) displaying a little more confidence than in the previous year. Seven increased gross profit but only four (Odgers, SystemsAccountants, Eames and Black Swan) simultaneously expanded GP/head and employee numbers. Five companies saw GP/head contract – Shilton Sharpe Quarry (SSQ), Green Park, Interim Partners, The SR Group and High Finance.

  • SSQ remains number one in its category with a modest 3.8% rise in net fees but its GP/head was held back by a substantial 12.7% expansion in headcount. While it retains its primary focus upon permanent legal recruitment, it now has 19 overseas offices as well as a developing interims/contract operation. Its coverage includes all industry sectors and spans five continents.

Turning to gross margin trends

  • Shilton Sharpe Quarry is an almost entirely permanent recruitment firm. Odgers, The SR Group and Black Swan each have a very high permanent bias.

  • SystemsAccountants probably has the highest proportion of temporary/interim business, together with Green Park and Interim Partners.

  • The average gross margin at 55.8%, a rise of 40 basis points, resulted from a mixed bag across the HOT 10, several winners and losers, driven mainly by the business mix.

  • For the complete Recruiter HOT 100, see November’s issue of Recruiter out next week. Other HOT 10 reports will be appearing on recruiter.co.uk next week.

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