Recruitment contributed £42.3bn to UK economy, up 8%

Recruiters’ direct contribution to the UK economy reached £42.3bn in 2019, accounting for 2.1% of UK Gross Value Added.

According to the Recruitment & Employment Confederation (REC)’s UK industry status report published this week, that represents an 8% increase on the previous year. This means the industry’s contribution is bigger than many other sectors, including the insurance and pension funding industry (£28.6bn).

In a press statement, the REC noted that Covid-19 restrictions “continue to have an adverse impact on recruitment activity and therefore on the profits of recruitment firms”, with the REC estimating that the pandemic has led to a 22% drop in direct GVA in between March and September. That includes a 19% reduction in permanent placements compared to 2019. 

“This number may grow due to March and April placements reflecting pre-pandemic work, and a longer recovery path for permanent placements,” the statement said. “There was a 30% drop in the number of temporary/contract workers on assignment each day, year-on-year.”

Other figures from the ‘2019-2020 UK recruitment industry status report’ include:

  • £37.8bn (89%) of the £42.3bn contributed to the economy, was achieved through temporary/contract placement activity.
  • The number of people employed in the recruitment industry in 2019 was 119,000.
  • 81% of the 31,000 recruitment enterprises in the UK are micro-businesses, with fewer than 10 employees. (However, this year’s survey showed evidence of consolidation.)

The report replaces the REC’s annual ‘Recruitment Industry Trends’ report and will be followed in February 2021, the REC said, by a broader study of industry’s economic and social impact.

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