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companies employ more than 200 staff, compared with 13% last year, and those employing 100-199 staff are also fairly stable, at 20 constituents. A rise was seen in the smallest firms, with 11% employing between 20 and 30 staff versus 9% last year. The 30-49 staff band also increased again to 29% (26%), but there was a marked decline to 26% (31%) in the employee band 50100, suggesting that it is the smallto-smaller end of medium-sized, maturing companies that is presently out-performing the pack.

O FFI CE /IN DUSTRIAL STAFFING The ‘high street’ national recruiter has finally disappeared from the HOT 100. It is hard to see a comeback, as its emphasis has changed towards different delivery models and bottomline profitability rather than net fees generated through high gross margin. As the temp margin eroded, with office and industrial volume staffing contracts driving prices downwards,

this trend was compounded by the low average-placement value. Thus, producing high GP/head, has neither been realistic nor a priority. Only PPF, the driver specialist, survives in the HOT 100 this year, and it is ranked 100th compared with 45th last year. There were two general recruiters listed last year and four the prior year. Ten years ago, the HOT 100 included 15 ‘generalists’ offering either office or industrial staffing services. In mitigation, there are a few companies supplying skilled trades into various industry sectors, usually as part of a mix with technical professionals. One such newcomer is Euroforce, specialising in skills for furniture, textile and automotive manufacturers, sourced from across Europe. PPF, trading as ADR Network, remained in the HOT 100 despite a reduction in sales and GP as some lower-margin business was intentionally shed, driving up margin, while driver CPC training lost some hours, and the



employ 20–30 staff



employ more than 200

29% of the firms in the list employ 3049 staff


weakening marketshare of the larger supermarkets also had an impact. Just outside the HOT 100 were Daniel Owen (including Workmates), which now has a broadened ‘white collar to trades’ multi-brand offering of construction, engineering and facilities management candidates. Pertemps also just missed the cut. Several others are sliding down the ranks, as the level for many professional staffing suppliers rose by comparison. Transline and Adecco’s Office Angels are next in line, but most are now well adrift from the HOT 100 productivity threshold. The likes of Angela Mortimer — in past years often included — have not necessarily deteriorated in their own performance, but have not been able to keep pace with the gains made by other high-value specialist sectors.

See for the HOT 100 breakdowns of four specialist groups: IT/telecoms, technical, public sector and professionals.

Conclusion and outlook True to form, the recruitment industry’s most productive companies chose not to take a pause during this year's accounting period and enjoy the fruits of previous, at times bold, investment. Instead, they carried on, even accelerated, the expansion of their workforce — by almost 10%. Productivity just managed to keep pace, rising slightly, as new staff were brought onboard. But the benefits will be sought in this next year, as new feeearners mature. A slowdown in the rate of expansion may well happen during 2015 as new people are assimilated, cutbacks in the oil & gas sector have some impact, and ongoing global economic and geopolitical

uncertainties encourage a more cautious approach. There is also an element of industry consolidation, perhaps more evident in the past year, as several high-value/high productivity specialist recruiters (including regular members of the HOT 100) were acquired. Business mix has also shifted, as the ‘cycle’ slowly moves through, but this is anything but a smooth curve. Permanent activity has, however, picked up across some sectors and is evidenced in company disclosures and an aggregate rise in the HOT 100 gross margin. This rose for the first time since the single year bounceback from recession in 2010,

and for only the second time in 10 years. Over that period, the gross margin rate has shed — even for these, the most highly productive companies — around one-third of its aggregate value. This drop is even greater for the wider industry, as the erosion of the temp margin has at times seemed unstoppable — whether because of competitive pricing pressure or changing delivery methods — and the permanent mix has varied. These are, however, tricky decision-making times for recruiters. Some would encourage more expansion in response to the strengthened overall UK labour market, selective skills shortages, economic

recovery and demographic challenges. Yet the flow of positive official data seems to be, at best, intermittent and the geopolitical issues are mounting quickly. Investment decisions taken now could have a greaterthan-normal impact upon profitability next year, simply because there are such farreaching uncertainties. If companies are to prosper in the long term, they must combine clear strategic thinking — clinically and selectively determining where and how to invest for the future — with extracting optimal productivity from existing staff. HOT 100 constituents have proved for 10 years now that they are often the best at achieving both these goals.

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Recruiter Hot 100 2015  
Recruiter Hot 100 2015