Record number of new recruitment businesses enter market in 2016

The recruitment industry has significantly grown over last five years, despite concern from SMEs over Brexit uncertainty.

2016 saw the highest number of new recruitment agencies on record opening their doors for the first time, according to Clearly PR & Marketing Communications.

Figures obtained by Clearly PR & Marketing Communications this week, under a Freedom of Information request from Companies House, show that 4,529 new agency businesses were registered between January and December 2016 – an increase of 13.7 per cent (up from 3,984) over the same period in 2015.

In 2014, 3,037 new agencies were registered while 4,193 and 1,528 were registered in 2013 and 2012 respectively.

2017 recruitment is on the rise

Since 2012, a total of 17,271 new agencies have registered with the total number of recruitment businesses registered as currently trading in the UK now standing at 26,901 – an increase of 56 per cent over the last five years.

Paul MacKenzie-Cummins, managing director of Clearly PR & Marketing Communications, thinks that to say that the recruitment industry is performing well, is a gross understatement.

He adds, ‘Employer hiring and the UK economy both remain strong and this is reflected in the number of recruitment entrepreneurs wanting to capitalise on positive trading conditions and go it alone. This is clearly having an impact on the sector itself too.

‘Figures published by the Recruitment & Employment Confederation in December shows that the recruitment industry is now worth £35.1 billion a year – up from £26.5 billion in the year 2012/13.’

The figures obtained by Clearly PR & Marketing Communications show an interesting trend over the course of the last 12 months.

Brexit had little affect

During the first half of the year, the number of newly registered recruitment businesses was understandably low in anticipation of the Brexit vote.

However, the immediate aftermath of the June result saw a surge in the number of new recruitment businesses being established.

In July and August 1,051 new recruitment agencies were registered – representing almost one in four (23 per cent) of the total number that were registered throughout the whole of 2016.

That momentum gathers pace and as we edged closer towards the end of the year, when 1,315 (29 per cent) new agencies were registered in November and December alone.

Rather than there being a sense of cautious optimism over the possible implications of the UK’s exit from the EU, the opposite appears to have happened, says Paul MacKenzie-Cummins.

MacKenzie-Cummins adds, ‘While we cannot predict with any certainty the impact of our leaving the EU will have on the UK economy, a growing number of would-be recruitment entrepreneurs are viewing the current state of the economy as an opportune time to take the plunge and start their own recruitment businesses.

‘Confidence is high in the sector right now and we expect it to remain so as we move further into 2017. But to stay ahead in the ever-increasingly competitive recruitment landscape, recruitment business owners need to consider how they are perceived and positioned in their market.’

He concludes, ‘Gone are the days when agencies could rely on their ‘name’ or track record of success to help win new clients and candidates. Today, savvy business owners are those who understand the need to be seen and heard by the right people, in the right way and at the right time.

‘In practice, that means having an appealing brand that is communicated through a strong social media presence, enhanced client and candidate engagement (not just selling), and having an active presence in the media where their target audience ‘hangs out.”

Further reading on recruitment

Owen Gough, SmallBusiness UK

Owen Gough

Owen was a reporter for Bonhill Group plc writing across the and titles before moving on to be a Digital Technology reporter for the

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