Permanent recruitment fees fall

The
recruitment industry struggled last year with permanent recruitment fees
falling by 8 per cent, a sector-wide survey reveals.

The
study by the Recruitment & Employment Confederation (REC) also shows that
margins in the temporary recruitment market fell by 0.7 per cent.

Recruitment
agencies placed 519,761 people into permanent jobs between 1 April 2001 and 31
March 2002 – an increase of 2.6 per cent on the previous year – but the value
of each placement dropped, resulting in the fall in permanent recruitment fees.

Tim
Nicholson, chief executive of the REC, said although total recruitment industry
sales grew by 5.9 per cent and the temporary recruitment industry also expanded
by 7.1 per cent, the year had been a difficult one for the industry overall.

The
research shows that the number of staff employed in the recruitment industry
fell by 7.7 per cent.

"The
recruitment industry continues to be of huge value to the UK economy, in the
services it provides and the revenue it generates. It is also clear that this
has been a tough year for our industry," he said.

The
survey reveals that the industry anticipates low growth in the year ahead, with
expansion in temporary/contract business expected to be lower than in 2001-02
at 4.4 per cent.

Respondents
predict an increase in the overall industry turnover of 4.5 per cent, with
turnover in the permanent industry expected to grow by 6.1 per cent.

"Further
margin squeezing, and additional regulatory costs contained within the
Government’s legislative pipeline, may affect our ability to find job
opportunities for work-seekers on the extremely large scale seen in
2001-02," said Nicholson.

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