In 2014, 4,083 new recruitment agencies were launched in the UK – an increase of 7 percent compared to last year, according to research from leading contract finance provider, Sonovate.
This means that more recruitment agencies were launched in 2014 than at any other point since 1990. The news coincides with research from the Recruitment and Employment Confederation (REC) which shows the value of the UK’s recruitment industry has surpassed its pre-recession peak, recording total revenue of £28.7 billion at the end of the financial year 2013/14.
Sonovate’s data, taken from Companies House, reveals that the number of recruitment agencies launched each year has almost doubled since 2010 when 2,092 were founded and has more than trebled since before the recession when 1,303 agencies launched in 2007.
Richard Prime, CEO of Sonovate, comments: “The UK recruitment sector is bigger than ever before, and while this is fantastic news for our industry, it presents some specific challenges.
“A huge factor in this rapid growth is the increase in contract recruitment. Start-up businesses need to overcome a lot of obstacles, and with this rise in contract recruitment, the most significant issue is cash flow.
“Traditionally agencies have had to turn to banks and traditional finance houses to secure the necessary finance to fund contractors, but they offer inflexible and outdated products that don’t take into account the unique requirements of small businesses. This is exactly why we launched Sonovate.”
Sonovate’s contract finance offering, launched in January 2014, is designed to make paying and managing contractors easy and profitable. It has already overtaken the UK banks in terms of new deals recorded to become the number one provider of contract finance to the UK recruitment sector.
Prime concludes: “As former recruiters ourselves, we’re dedicated to helping more recruitment agencies than ever before drive growth in 2015.”
