I hear good things about Telco Recruitment Market

2006 will be a year of slower growth

posted 11:27am 09/12/05
Richard Staines

Recruiters can expect a year of slower growth in 2006, although long-term prospects remain good.

Research has predicted the UK recruitment market will demonstrate growth of 12% throughout the five-year period up to 2010.

But the industry will grow by just 1% in 2006 because of the faltering economy, recovering to 3% in the 2008, according to figures from research firm Market and Business Development (MBD).

MBD says the recruitment industry grew by 7% to £25bn in 2004. However, 2005 saw
more modest growth of 3% to just under £26bn.

The company adds that increased legislation costs and a maturing market will hamper the industry’s growth rate.

The figures come at a time when the Chancellor has slashed his estimate for the UK’s economic growth to 1.75%.

Recruitment is a highly cyclical business and tends to mirror wider economic trends – and Gordon Brown’s downbeat forecast could mean leaner times are ahead.

“There is growth potential in the market, but it will be much slower because recruitment is so closely linked to the economy,” said Claudia Preedy, market analyst at MBD.

Andy Hogarth, managing director of industrial recruiter Staffline, agrees. “I think it is going to be tough, because of the amount of competition out there and because the economy is not growing as fast as it was,” he said.

“In the sectors we operate in, clients such as supermarkets are driving a very hard bargain. But there is an awful lot of opportunity out there, so you can’t afford to sit back and relax.”

But James Pritchard, managing director of recruiter JPA, remains bullish about the prospects for next year.

“I think a lot of people will recruit – most of them are giving us positive signals for next year,” he said.

“We can’t find enough people to fill the roles that we have. It’s still very exciting and companies that are managed well will be successful.”