HOT 100: A look at the HOT 10 Professional Sector Recruiters

This group covers the main professional candidate segments – accounting, finance, legal, HR, sales & marketing, media etc. and now includes two professional recruiters previously categorised in the HOT 10 as Public Sector specialists.

Professionals have a diminished presence in the 2020 HOT 100, with 26 companies compared with 30 last year (adjusted like-for-like). 

HOT 10 PROFESSIONAL RECRUITERS

SSQ £192,755
2 Green Park Interim & Executive £164,833
3 Investigo £149,198
4 Odgers Group £146,000
5 Walker Hamill £142,609
6 Dartmouth Partners £141,776
7 PSD Group £134,705
8 The SR Group £133,869
9 Eximius Group £126,299
10 Morgan Law £125,500

 


A few exceptions occurred due to accounts timing this year – Sheffield Haworth is the most high-profile and the only one affecting the HOT 10. Among these 26 professionals companies, there remain some of the older-established financial ‘giants’ – with Page Group rising to 48th, Robert Walters improving to 76th but Hays now down at 91st. These entries reflect group financials including a multitude of professional sectors and extensive overseas earnings. Other ‘larger’ professional recruiters within this HOT 100 include Odgers, Phaidon, The SR Group and Hydrogen Group.

Focusing now upon this year’s HOT 10 shows that the bar dropped from around £210,000 to below £198,000 gross profit (GP)/head. Overall, this HOT 10 reflects some modest expansion in headcount that has not yet translated into productivity, hence reporting an aggregate decline. The year was dominated by Brexit concerns and political uncertainty, a factor which would perhaps have a disproportionately higher impact upon demand for professional services than for many other occupations. 

Consequently, it was a pedestrian performance overall from this HOT 10 as the sector grappled with the wider influences, and growth in turnover and GP scarcely kept pace with inflation. Here is the summary of findings:

• HOT 10 represents £540m in turnover generating £239m in net fees.
• An estimated seven of the HOT 10 companies exceed a 50% permanent business mix, a greater perm presence than last year.   
• Net fee (GP) growth among the HOT 10 averaged just 1.6% versus a strong double figure gain last year. A 5.2% headcount expansion therefore depressed the average GP/head, which declined by 3.4% to £145,989. After maximising returns in the prior year, there is little doubt that the heightened Brexit uncertainty throughout 2019, with its rollercoaster deadlines and cliff edge threats, has taken its toll on this sector, with activity subdued across many clients and disciplines. Selective, strategically-placed investment has continued but clearly there existed tangible challenges beyond the control of recruiters and their clients.
• Seven companies remain from last year, with SSQ returning to top spot as Sheffield Haworth missed the entry deadline due to filed accounts timing. Also exited from last year, CMA Recruitment dropped just outside the HOT 10 whilst Pure has also dropped out, due to later filing – the latter is also now part of the parent group which owns Dartmouth Partners, perhaps implying a consolidated entry in future years. Green Park, PSD Group and Morgan Law advanced into the HOT 10 this year.
• Six companies expanded their workforce whilst six also increased GP and seven raised GP/head. However, only three of these HOT 10s simultaneously expanded GP/head and employee numbers, whilst a further one company did so with flat headcount.    
• SSQ, predominantly a permanent legal specialist which also encompasses an interim solutions division for temporary and contract placements, returned to top spot this year, increasing its productivity by 5.3% as GP rose on an unchanged headcount. It operates from its large London base and 11 international offices providing coverage in major legal centres across the globe. 
• With the introduction of public sector suppliers into this category, Green Park comes in at 2nd as headcount expansion of 9.1% and GP +14.6% drove productivity up by 5.1%. A substantial part of its earnings derive from the not-for-profit markets but it also has a significant presence in other markets such as retail.  
• Investigo, as predicted last year, did indeed march up the ranks – from 8th to 3rd spot as its expansion programme of the previous two years began to reap rewards. Admittedly against pro-rated comparisons due to a year end change but, like-for-like, a 23.9% GP growth was paired with 12.6% headcount additions to raise productivity by 10%.
•    Odgers moved down to 4th, reversing all of last year’s gain with a 13.1% drop in productivity as an 8.6% decline in GP combined with a 5.3% rise in headcount. Odgers’ year end for this HOT 100 was April 2020, reflecting the uncertain climate around the withdrawal from the EU and subsequent trade negotiations’ impasse just as the pandemic began to spread globally.
• Walker Hamill edged up to 5th as heavier reductions in headcount more than compensated for the 6.6% decline in GP to increase productivity modestly. 
• The following pack are led by rapidly expanding Dartmouth Partners in 6th, posting well over 40% gains in both net fees and headcount. PSD Group in 7th, by contrast, gained productivity despite a fall in GP as it saw a steeper reduction in headcount.  
• At 8th The SR Group, with its key specialisations in legal, compliance and financial services via three UK, one Dublin and nine other overseas offices, lost a little ground following strong gains in productivity in the prior year. Headcount still added a further 10.5% but GP could not immediately keep pace.    
• Eximius remained at 9th – this legal & risk specialist expanded headcount over 11% but could not quite yet match this growth through GP, hence a slight drop in productivity.   
• Morgan Law, with its heavy public sector presence, moves in at 10th reflecting a solid mix of both contract and permanent business across its mainly not-for-profit clients. Nevertheless, its growth here is driven by a contraction in headcount enabling a rise in productivity despite a decline in GP. 

Turning to gross margin trends: 

  • SSQ, Odgers, Dartmouth and The SR Group are all estimated over 90% or entirely permanent recruitment firms. A further three, Walker Hamill, PSD Group and Eximius, are estimated or known to have perm fees contributing well in excess of 50% of total GP. 
  • Green Park, Investigo and Morgan Law have the least permanent bias; although still very substantial they are estimated to favour contract/interims, being well below 50% perm net fees – considerably less than their HOT 10 peers.  
  • Average gross margin at 44.3%, fell just 30 basis points, signalling only modest shifts in HOT 10 aggregated perm mix, value and associated fee rates during the period.

Recruiter’s HOT 100, in association with recruitment analysis services provider Agile Intelligence, will be published in the Jan-Feb 2021 issue, out soon.

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