The UK is proud to have one of the largest recruitment industries in the world. But as the country faces an extremely difficult financial future in the wake of COVID-19 – it’s worth understanding just how much the recruitment industry brings to the UK economy. After all, a healthy jobs market could be crucial to economic recovery after the worst effects of the pandemic.
Luckily, the latest statistics are just in from the Recruitment & Employment Confederation (REC).
Published in December 2020, the REC’s most recent industry status report found that recruiters contributed an enormous £42.3 billion to the UK economy in 2019. This equates to 2.1% of GVA (Gross Value Added).
The report also found that, in 2019:
- There was a total of 119,000 people employed within the recruitment industry in 2019.
- The UK had 31,000 active recruitment agencies and businesses.
- Of these recruitment enterprises, a huge 81% were small businesses with less than 10 employees.
- £37.8 billion (89%) of the sector’s contribution to UK GVA came from temporary or contract placement activity.
How does recruitment measure up against other sectors?
Recruitment clearly had a great 2019, and it seems to have outshone many other major UK sectors in terms of economic contribution.
With an 8% increase (compared to 2018) in GVA to £42.3 billion, the sector easily outperformed the insurance and pension funding industry (£28.6 billion). It was even ahead of arts, entertainment and recreation at £30.7 billion.
The impact of COVID-19 on recruitment
As you’d expect after a difficult 2020, the latest REC Industry Status report made much of the impact COVID-19 has had on the sector.
While recruitment hasn’t suffered as much as other industries such as hospitality, there was nonetheless a significant drop in placements and recruiter profits during 2020.
Between March and September, there was a 19% drop in permanent placements and a 30% reduction in the number of temporary/contract workers on assignment compared to 2019. And the REC estimated that the pandemic caused a 22% drop in direct GVA during this period.
Commenting on the sector’s strong performance in 2019, and path to recovery post-COVID, the REC’s chief executive said in a press release:
“The year leading up to the pandemic was challenging. Economic uncertainty ahead of the Brexit General Election and a slowing global economy made progress difficult. It’s a testament to recruiters’ resilience that they grew their contribution to the economy by a huge 8% to £42.3bn in 2019. They helped over a million people into permanent roles before the pandemic, and had just under one million staff out on temporary placements every day. That hard work put the industry in good shape going into lockdown.
“Employment businesses have shown the best of themselves since then. The UK recruitment industry stepped up – supporting our supermarkets when the strain was at its highest, helping the NHS care for the most vulnerable, and keeping the UK open for business wherever we could. The forecasts in this report should surprise no-one. Bouncing back from falls in revenue of 20% or more will not be instant, but the trends are good, and a new economy brings new opportunities.”
If you’re searching for new talent or a new opportunity, First 4 Recruitment is perfectly placed to help. Get in touch with our recruitment specialists to find out more – call us on 01706 433 744 or email firstname.lastname@example.org. And for more of the latest UK recruitment sector news, check back regularly on our blog.