Recruitment agencies take strain in uncertain job market, reveals new REC research

[Gavin Chase]

You would think that we were all in for a rocky ride but lets see what the REC say..

New research from the REC's Research Unit has shown agencies are beginning to pick up most of the strain generated by the current uncertainty within the jobs market.

The Key Recruitment Trends 2007 report, which contains the key findings of last year’s monthly tracking research, identified the fact that agencies were acting as “shock absorbers” in providing the labour market with flexibility during the present economic period.

Overall, the review results showed 2007 was another strong year for the recruitment industry with most indicators of satisfaction, performance and efficiency generally ahead of those recorded in 2006.

However, towards the end of the review period, significant changes in some of the data recorded signified a possible slowdown after a sustained period of economic growth.

Roger Tweedy, the REC’s Head of Research, said of the findings: “With the Unit’s tracking surveys in place, commentators and analysts will be able to monitor closely how the ‘agency model’ works to support the economy during a period of uncertainty.

“The results so far show that the agencies are acting as ‘shock absorbers’ in providing the labour market with flexibility that both cushions immediate impact and enables prompt recovery. This will be examined and assessed over the coming months.”

He added that at this crucial time when agencies will be playing a critical role in economic progress, policy-makers and legislators should think very carefully before adding any extra pressures on agencies when they may already be starting to feel the “commercial heat.” Key trends identified in the 2007 review include:

Employers continuing to use the same average number of agencies (2.5) as in 2006 although usage increased slightly towards the year’s end
Employers were less likely to “always use” an agency than they were in 2006, which was the case across most sectors and regions, especially among SMEs. Again there were signs of this trend reversing towards the end of the year
During 2007, employers across most sectors increased the use of temporary agency workers as a proportion of their overall workforce
Employers in most sectors were significantly more satisfied with their main agency in 2007 – a 20 point increase - compared to the previous year
The number of workers registered with agencies increased over the period while the number on assignment per branch remained broadly static
The number of workers registered with an agency varied considerably by sector and region
Agency workers generally found it easier to find work except in London
The average length of individual assignments reduced over the period
Agency workers’ satisfaction increased across all sectors and regions
The proportion of agency workers who were looking for permanent roles continued to decline throughout 2007 to less than 50 per cent by the end of the year.

So on the face of it we should probably be more confident than the media would like us to believe. Remember, there will always be a place in recruitment for agencies who identify the top 10% of industry talent consistantly. Its the job board CV chasers that will find the future tough. Indeed I have heard both Hays and Alexander Mann Solutions say that agencies engaged with them in RPO are failing to supply quality CVs.

Thank heavens for search based recruitment consultants!

[Jason Rager]

In an effort to minimize negative impact caused by recession in the economy, recruitment agencies are looked upon as a glimpse of hope for those who are looking for new employment avenues. The manning agencies play a very important role in our economy as instruments to opening opportunities for those needing services and looking for jobs. Despite economic crisis, recruitment agencies continue to find various employment opportunities to give out to the many displaced workers. For those who have savings, it is also good if they invest into businesses of known high-success rates. Franchising can be a good business option for them. They may need a franchise guide to help them proceed with the evaluation process in the right direction before making any decision.