Stay ahead of the curve in the UK recruitment market with Mintel’s UK Recruitment Market Report 2024. Our full report is packed with consumer-led market intelligence, the latest trends and consumer behaviours affecting your industry, alongside data-driven recommendations.
Topics Analysed in this Report
- The recent performance of the UK recruitment market
- Analysis of the size of the temporary and permanent placement sectors
- Key market trends and how they are affecting recruitment firms
- The opportunities and threats facing recruitment firms
- Five year market outlook
UK Recruitment Market Outlook
UK recruitment market performance impacted by a cooling jobs market
Since 2023, market performance has been impacted by a slowdown in hiring activity amid an uncertain economic environment. Recruitment businesses have seen increased caution about changing jobs and extended hiring times. Market growth is expected to slowly pick up from 2025 amid a more positive macroeconomic climate.
- UK recruitment market size: The value of the UK recruitment market declined by an estimated 3% in 2023, reflecting reduced hiring activity.
UK Recruitment Market Trends
Growing competition in an increasingly digital recruitment landscape
With relatively low barriers to entry, the recruitment market is highly competitive. Established firms are facing increased competition from new entrants, specialised recruitment agencies and online agencies, making it challenging to maintain market share.
Differentiation opportunities
Recruitment firms can adapt to growing competition by incorporating advanced technologies, specialising in niche markets, enhancing the candidate experience, offering value-added services and deepening their client and candidate relationships in an increasingly digital recruitment landscape.
Purchase the full report to learn more about the current landscape of the UK recruitment market.
UK Recruitment Market Definitions
For the purpose of this report, the market is segmented as follows:
- Permanent: covers the activities of placement agencies (referred to as permanent agencies in this Report), including the placement of individuals who are not employees of the agency, and other activities such as listing vacancies, as well as activities facilitated online.
- Temporary: composed of agencies that directly supply workers to client businesses for a limited period of time to temporarily replace or supplement the workforce of the agency’s client, where the individuals provided are employees of said agency but not under the agency’s supervision at client work sites.
Meet The Expert
This report is written by Mintel’s Senior B2B Analyst, Claudia Preedy. Claudia joined Mintel in October 2013. Claudia has over nine years’ experience researching B2B markets, identifying market trends, analysing the impact of the regulatory, economic and political environment and providing market forecasts. Claudia holds a Master’s degree in Marketing Management.
Challenging market conditions are set to prevail in the short-term, with the strongest demand seen for temporary roles as employers look for flexibility.
Claudia Preedy
Senior B2B Analyst
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Executive Summary
- Opportunities for the recruitment market
- Recruitment firms can play a pivotal role in bridging the skills gap
- Growing focus on ED&I
- Firms need to adapt their services to evolving workforce dynamics
- Market dynamics and outlook
- Market size & forecast
- Market predictions
- Market size and forecast
- Graph 1: market size and forecast for recruitment, 2023-28
- Longer-term market outlook remains optimistic
- Recruitment market continues to see significant shifts
- Temporary placements sector accounts for three-quarters of market value
- Graph 2: recruitment market value, by segment, 2019-23
- Competitive landscape
- The rise of digital recruitment
- Industry is showing signs of consolidation
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Market Dynamics
- Market size
- Market slowdown in 2023…
- … as performance is affected by a cooling jobs market
- Near-term challenges persist
- Recruitment market continues to see significant shifts
- Market forecast
- Market conditions expected to improve from 2025 onwards
- Underlying structural growth drivers will support market development
- Client demand for additional services expected to increase
- Market segmentation
- Reduced demand for permanent placements drives market decline
- Graph 3: recruitment market value, by segment, 2019-23
- Temporary placement sector accounts for three-quarters of the recruitment market
- Temporary recruitment presents an attractive option for employers in uncertain economic climate…
- …with more people also looking for non-permanent jobs
- Permanent placements sector impacted by low client and candidate confidence
- Market trends
- Firms need to adapt their services to evolving workforce dynamics
- The rise of skills-based hiring
- The growing importance of employer branding
- AI incorporation in the recruitment process
- Good practice guidance imperative for AI use in hiring
- While AI will pose a threat to some jobs, it will also create new job opportunities
- How recruitment firms are exploring AI
- Job platforms are also integrating AI to enhance job matches
- Macro-economic factors
- Economic output has stagnated since the cost of living crisis began
- Graph 4: GDP, 2021-23
- GDP forecast
- Graph 5: GDP growth OBR versus independent forecast averages, 2024-28
- Falling inflation has reduced pressure on household finances
- Graph 6: CPI inflation rate, 2021-24
- Interest rates expected to fall in 2024, but borrowing pressures will remain
- Improvement in business confidence
- Graph 7: ICAEW business confidence index, 2018-24*
- UK employment rate has been decreasing since mid-2023
- Graph 8: employment rates, 2020-24
- Unemployment rate rises…
- Graph 9: unemployment rate, 2020-24
- …but wage growth remains strong
- Graph 10: total and regular pay, 2014-24
- Job vacancies on downward trend since mid-2022…
- Graph 11: number of vacancies, three month averages, 2016-24
- …and vary depending on industry
- Graph 12: quarterly and annual percentage changes in vacancies by industry sector, March-May 2024
- Monthly job postings trend
- Graph 13: number of active job adverts, 2020-24
- Strong regional variation in job postings growth since 2020
- Graph 14: percentage change in the number of active job postings between January 2020 and April 2024
- Labour market outlook
- Market drivers
- UK employer demand for temporary workers on the rise
- Graph 15: temporary employees, by type, 2019-24
- More than 80% of UK firms use flexible employees
- UK workforce has become more age diverse
- Growing importance of the Millenial and Gen Z workforce…
- …while over-50s also represent a growing share of the workforce
- Channels used when job-hunting also vary across generations
- Recruiters need to cater to multiple generations
- ‘Green industries’ become a key area for recruiters…
- Graph 16: employment in green industries by major activity, 2015-22
- …but significant green skills gap needs to be addressed
- Widening skills gap remains a concern across several sectors
- Recruitment firms can help tackle skills shortages
- Growing focus on ED&I and sustainability
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Competitive landscape
- Industry structure
- Industry development
- The rise of digital recruitment
- M&A activity
- Changes in industry structure
- Changes in financial structure
- Changes in employment structure
- Competitive strategies
- Recruitment firms step up efforts to help solve technology skills gap
- Recruitment firms step up efforts to help solve technology skills gap (cont.)
- Reed launches Reed Environment to address green skills challenge
- Randstad adopts a new specialisation approach
- PageGroup invests in technology for productivity gains
- Company profiles
- Adecco UK
- Group strategy
- Financial performance
- Hays
- Recent company activity
- Hays group’s strategic priorities
- Financial performance
- PageGroup
- PageGroup’a UK presence
- Group strategy
- Financial performance
- Majority of group revenue generated in EMEA region
- Graph 17: turnover analysis of PageGroup, by geographic segment, 2022-23
- Randstad
- Randstad’s five strategic pillars
- Recent company activity
- Financial performance of Randstad Solutions
- Reed
- Reed Specialist Recruitment’s financial performance
- Reed in Partnership
- Financial performance
- Reed Online
- Financial performance
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Appendix
- Report scope and definitions
- Market definition
- Industry structure data
- Abbreviations and Terms
- Generations
- Methodology
- B2B report methodology
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