Recruitment firms remain resilient but tech and staff retention crucial for the future.
Staffing companies are showing continued resilience despite the economic uncertainty, but consultant retention and investment in technology is needed if the sector is to thrive in a post pandemic environment. That’s according to recent research from the Association of Professional Staffing Companies (APSCo), produced in conjunction with Saffery Champness.
The survey asked businesses to score their company between 1 and 10 – across a number of operational, organisational and financial criteria with 10 indicating a firm is ‘best in class’. When assessing their firm’s operational resilience, those with a Net Fee Income (NFI) in excess of £50 million indicated optimism had remained, with an average score of 8. No averages were recorded below 6, suggesting the recruitment sector has remained resilient despite taking a hit during the first few months of lockdown.
Financial resilience also remains intact, with many confident that their company has the financial resilience to weather the storm of Covid-19, with no averages falling below 6 on the scale.
Consultant retention and technology investment a priority
The report also revealed concerning gaps in recruiter retention and investment in technology that could hinder progress for some recruitment businesses. 83% of firms with an NFI over £10 million have, or continue to develop, sector-specific technology. However, over half of the firms with an NFI under £2 million scored themselves less than 5 on technology, indicating that smaller staffing companies have yet to reap the benefits of automation and cloud-based systems.
The historical staff retention challenge that’s long been prevalent across hiring companies also has the potential to hinder growth in recruitment, though smaller firms appear to be faring better than larger ones. Over 53% of those firms with an NFI below £10 million scored themselves 8 and above, whilst just 46% of companies with an NFI greater than £50 million scored 8 and above.
Ann Swain, CEO of APSCo, commented:
“It’s highly encouraging to see the recruitment sector remain resilient despite the significant challenges that have been thrown at staffing companies this year. However, if this optimism is to remain and businesses are to not just survive, but more importantly, thrive post-Covid, consultant retention and technology needs to be a focus. Holding on to top performing recruiter is key, but throwing money at this problem alone won’t always work. Instead a greater focus on training, development and structured career progression opportunities can help firms hang on to the big billers. And while IT projects usually require investment in both time and money, it is essential that recruiters invest in more sophisticated CRM systems and timesheet software to improve profit margins.”
Jamie Cassell, Partner at Saffery Champness LLP added:
“It’s encouraging to see the recruitment sector remain resilient despite the on-going challenges across the UK. The fact that so many businesses are indicating that they have the funding available and have developed a flexible business strategy to help weather the storm is highly welcome news in what has been an incredibly difficult year so far. We may be facing continued uncertainty, but the recruitment sector’s ability to continue operating will be crucial as it plays its part in getting the UK back to work.”