Revenue will grow modestly as unemployment remains high
London, United Kingdom (PRWEB) January 17, 2013
The performance of the Employment Placement Agencies industry is inescapably tied to the hiring intentions of businesses and thus the economic cycle. As a result, the industry has gone from boom to bust over the past five years. The industry began the period in high demand as low unemployment caused skills shortages and intense competition for quality staff. According to IBISWorld industry analyst Steven Connell, “following the financial crisis and recession, businesses began shedding staff and workers became more reluctant to attempt to switch jobs”. Labour market activity plummeted and the swing in favour of employers meant many clients were able to bring some of their recruiting needs in-house, which they were happy to do to cut costs. This caused industry revenue to drop by more than half over 2008-09 and 2009-10. Industry revenue rebounded in 2010-11 but has slowed again as the labour market remained weak.
The industry will record weak growth of 2.0% during 2012-13. While the Olympics should bolster employment growth and demand for industry services, this is expected to prove only a temporary boost to growth. During the five years through 2012-13, industry revenue is expected to decline by 11.3% per annum to total £8.27 billion.
The industry will remain under strain early in the five years through 2017-18. With the economy expected to recover only slowly and unemployment forecast to rise over 2013-14, employers will continue to put off hiring. Later in the period, demand for industry services should pick up sharply as the labour market recovers and firms outsource recruitment operations. Connell adds, “specialised online job-search websites and job directories pose a major threat to the industry, but the personalised nature of the industry's services should mean it will remain relevant in the long term”. During the five years through 2017-18, industry revenue is forecast to increase moderately.
The Employment Placement Agencies industry has a low level of market share concentration due to the wide variety of niche services offered and the presence of a large number of small operators that serve local areas.
For more information on the Employment Placement Agencies industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
This industry is involved in listing employment vacancies and referring or placing applicants for employment on a permanent basis. The individuals placed are not employees of the employment agency.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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