The Business Sales Report today released figures which hinted that recruitment agencies were suffering from the downturn in the economy. The number of recruitment agencies going into administration increased for the third consecutive six-month period at the end of 2009. 57 recruitment companies in the second half of the year went into administration, compared with 45 in 2008.
This report comes just as a survey from TalentPuzzle has shown that 76% of UK businesses believe they are not getting value for money from recruitment agencies. They feel frustrated that there didn’t seem to be any consistency in the rates charged by agents when they are recruiting for contractors and permanent employees.
According to TalentPuzzle, UK businesses currently spend £2.6 billion on external recruitment of contractors and permanent employees per year, but some are now looking for improved methods of recruiting and are seeking to reduce their fees. Virginia Raemy, CEO of TalentPuzzle commented;
“It is clear that both recruiters and employers need to improve the way that they work together. They should have a symbiotic relationship, rather than seemingly working against each other. By working much more smartly and effectively together this would help raise the quality and targeting of CVs. This is a win-win situation for both parties, as it helps employers to reduce their time to hire and helps recruiters improve their reputation, increase their quality and hopefully increase their new business,”
Bob Young, a partner at business rescue, recovery and restructuring specialist Begbies Traynor, said: “I have seen a significant increase in problems in the recruitment sector this year (2009). The main reason for this is the general downturn in the market.”
On a positive note though, the latest Jobs Outlook survey from the Recruitment and Employment Confederation (REC) revealed that 94% of employers are not looking to make any further cutbacks on jobs in 2010 and 20%are even looking to increase the number of contractor roles over the next 12 months.
