Recruitment Agencies (Temporary & Contract) Market Report

This Market Report examines the market for temporary and contract recruitment in the UK. It covers organisations that recruit on behalf of clients for temporary positions, whether they call themselves recruitment consultancies, recruitment companies or employment agencies. The market is segmented into the following recruitment sectors: blue collar, computing/IT, construction, drivers, educational, financial/accountancy, hotel/catering, nursing and other medical, professional/managerial, secretarial/clerical, technical/engineering and other.

In the year to March 2006, the market was worth £21.56bn, according to the Recruitment & Employment Confederation (REC), which represents a rise of 6.4% on the previous year. 2006 as a whole (i.e. January to December), proved to be one of the industry’s best years since 2000, with fast-growing demand evident in the second half of the year.

Secretarial/clerical and blue-collar staff are the largest sectors, but the strongest sectors in 2006 were financial/accountancy, computing/IT and construction. The educational sector has also proved to be important, although the actual number of placements was not as high as it was in some sectors.

The recruitment industry is a fragmented one, supporting some very large firms and a vast number of small to medium-sized firms. The major companies include: Adecco Holdings (UK) Ltd, Allied Healthcare PLC, The Capita Group PLC, The Corporate Services Group PLC, Hays PLC, Kelly Service (UK) Ltd, Manpower PLC, MPS Group International PLC, Nestor Healthcare Group PLC, Pertemps Recruitment Partnership Ltd, Spring Group PLC and Vedior NV.

2006 witnessed a considerable degree of corporate activity in the industry, including a significant number of acquisitions. Meanwhile, a noticeable feature within the industry has been the development of niche recruitment consultancies. Legal issues continue to be a cause for concern; yet again, there were some important court cases concerning the rights of temporary workers.

A major development in 2006 was the publication by the REC of some original research into the structure of the industry and job satisfaction among agency temporary workers. The REC’s commissioned research revealed that the industry and its temporary workers were far more complex than many people had realised.

The forecasts continued steady growth for the industry between 2007 and 2011, based on recent growth in the UK economy and the recruitment market. Continuing skills shortages and workers’ increasing willingness to take on temporary or contract posts should encourage more rapid growth in this market than in the permanent recruitment market.
 

Table of Contents

1. Market Definition

INTRODUCTION
MARKET SECTORS
Temporary Workers
Contract Workers
Recruitment Sectors
MARKET TRENDS
ECONOMIC TRENDS
Population
Table 1: UK Resident Population Estimates by Sex (000), Mid-Years 2001-2005
Gross Domestic Product
Table 2: UK Gross Domestic Product at Current and Annual Prices (£m), 2001-2005
Inflation
Table 3: UK Rate of Inflation (%), 2001-2005
Unemployment
Table 4: Actual Number of Unemployed Persons in the UK (million), 2001-2005
MARKET POSITION
Table 5: The Temporary and Contract Staff Recruitment Market’s Share of the Overall Recruitment Market by Turnover (£bn and %), Years Ending March 2002-2006

2. Market Size

THE TOTAL MARKET
By Value
Table 6: The Total UK Temporary and Contract Staff Recruitment Market by Turnover (£bn), Years Ending March 2002-2006
Figure 1: The Total UK Temporary and Contract Staff Recruitment Market by Turnover (£bn), Years Ending March 2002-2006
By Volume
Table 7: Number of Temporary and Contract Placements, Years Ending March 2002-2006
Figure 2: Number of Temporary and Contract Placements (000), Years Ending March 2002-2006
MARKET SECTORS
Blue Collar
Computing/IT
Construction
Drivers
Educational
Financial/Accountancy
Hotel/Catering
Nursing and Other Medical
Professional/Managerial
Secretarial/Clerical
Technical/Engineering

3. Industry Background

RECENT HISTORY
INDUSTRY SYNOPSIS
Table 8: Financial Analysis of Recruitment Companies (£000, % and £), Latest Financial Years
NUMBER OF COMPANIES
Table 9: Number of UK VAT-Based Enterprises Engaged in Labour Recruitment and the Provision of Personnel by Turnover Sizeband, 2003-2006
EMPLOYMENT
Table 10: Number of UK VAT-Based Enterprises Engaged in Labour Recruitment and the Provision of Personnel by Employment Sizeband, 2003-2006
REGIONAL VARIATIONS IN THE MARKETPLACE
HOW ROBUST IS THE MARKET?
LEGISLATION
Recruitment Industry Legislation
Employment Legislation
Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002
Data Protection Codes
Holiday Pay
Working Time Regulations
Family-Friendly Policies
Anti-Discrimination Legislation
Minimum Wage
Employment Status
KEY TRADE ASSOCIATIONS
Recruitment & Employment Confederation
Association of Technology Staffing Companies

4. Competitor Analysis

THE MARKETPLACE
Table 11: The Top 20 UK Recruitment Companies Ranked by Turnover from Recruitment Activities, 2006
Table 12: The Top Ten UK Recruitment Companies by Number of Temporary/Contract Workers, 2006
MARKET LEADERS
Table 13: Leading UK Recruitment Companies by Total Turnover† (£m), 2004/2006
Adecco Holdings (UK) Ltd
Company Structure
Current and Future Developments
Financial Results
Allied Healthcare Group Ltd
Company Structure
Current and Future Developments
Financial Results
The Capita Group PLC
Company Structure
Current and Future Developments
Financial Results
Carlisle Group PLC
Company Structure
Current and Future Developments
Financial Results
The Corporate Services Group PLC
Company Structure
Current and Future Developments
Financial Results
Hays PLC
Company Structure
Current and Future Developments
Financial Results
Kelly Services (UK) Ltd
Company Structure
Current and Future Developments
Financial Results
Manpower PLC
Company Structure
Current and Future Developments
Financial Results
MPS Group International PLC
Company Structure
Current and Recent Developments
Financial Results
Nestor Healthcare Group PLC
Company Structure
Current and Future Developments
Financial Results
Pertemps Recruitment Partnership Ltd
Company Structure
Current and Future Developments
Financial Results
Spring Group PLC
Company Structure
Current and Future Developments
Financial Results
Vedior NV
Company Structure
Current and Future Developments
Financial Results
MARKETING ACTIVITY
Main Media Advertising
Table 14: Advertising Expenditure of the UK Recruitment Industry (£000), Years Ending June 2003-2006
Other Promotional Activity

5. Strengths, Weaknesses, Opportunities and Threats

STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS

6. Buying Behaviour

REASONS FOR HIRING TEMPORARY AND CONTRACT STAFF
HOW RECRUITMENT AGENCIES ARE USED
HOW RECRUITMENT AGENCIES ARE CHOSEN

7. Current Issues

MARKET CONDITIONS
INTERIM MANAGEMENT
CORPORATE ACTIVITY
problems for NICHE COMPANIES
JOB SATISFACTION AMONG TEMPS
LEGAL ISSUES
Gangmasters Licensing Act (2005)
Recent Case Law
Premature Termination of Contracts
Who is the Agency Worker’s Employer?
Rolled-Up Holiday Pay

8. The Global Market

MARKET SIZE AND LARGEST MARKETS
Table 15: The World’s Largest Recruitment Markets by Value ($bn), 2006

9. Forecasts

INTRODUCTION
The Economy
Table 16: UK Government Forecasts for Population, Gross Domestic Product, Inflation and Unemployment (000, % and million), 2006-2010
FORECASTS 2007 To 2011
Table 17: The Forecast UK Temporary and Contract Staff Recruitment Market by Turnover (£bn), Years Ending March 2007-2011
Figure 3: The Forecast UK Temporary and Contract Staff Recruitment Market by Turnover (£bn), Years Ending March 2007-2011
MARKET GROWTH
Figure 4: Growth in the UK Temporary and Contract Staff Recruitment Market by Turnover (£bn), Years Ending March 2002-2011
FUTURE TRENDS
More Legislation?
VAT Review
Change at the REC

10. Company Profiles

Adecco Holdings (UK) Ltd
Allied Healthcare Group Ltd
The Capita Group Plc
THe Corporate Services Group Plc
Hays Plc
Kelly Services (uk) Ltd
Manpower PLC
Nestor Healthcare Group Plc
Spring Group Plc

11. Consumer Confidence

METHODOLOGY
KEY FINDINGS THIS QUARTER
THE WILLINGNESS TO BORROW
Confidence Slips Slightly
Table A: The Average Amount Consumers Are Willing to Borrow in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), November 2005-2006
Significantly More Adults Are Willing to Borrow
Table B: The Number of Adults Willing to Borrow in Order to Purchase Expensive Items (000 and %), November 2005-2006
SPENDING FROM SAVINGS
Little Change in Spending from Savings
Table C: The Average Amount Consumers Are Willing to Spend from Savings in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), November 2005-2006
Saving Grows in Relative Importance
Table D: The Average Amounts Adults Are Confident Spending to Purchase Expensive Items (£ and %), November 2005-2006

12. Further Sources

Associations
Publications
General Sources
Government Publications
Other Sources
Bisnode Sources 
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