New figures suggest Brexit is a “catalyst” rather than barrier to business growth
Figures released today appear to contradict the widely held belief that Brexit will cause mass job losses in the UK, with the number of recruitment agencies starting up in 2018 at their highest levels for over 10 years according to a leading communications consultancy for the sector.
Using data obtained from Companies House under a Freedom of Information Act, Clearly PR & Marketing Communications has revealed that since the start of the year, 7,630 recruitment and employment agencies have registered as new businesses.
This equates to an average start-up rate of 848 per month. By the end of 2018, the company predicts this number will stand at over 10,000 in a single year – a record-high for the sector.
Paul MacKenzie-Cummins, managing director at Clearly PR & Marketing Communications, said: “Despite the doom and gloom over Britain’s impending exit from the EU, Brexit has served as a catalyst for industry growth rather than a hindrance to it.”
Since the referendum of June 2016, the number of new recruitment businesses starting up has continued to rise. In 2017, 9,001 agencies opened their doors for the first time, compared to just 4,529 in 2016 and 3,984 in 2015.
There are a number of reasons for this, as Paul explains.
“While unemployment being at its lowest since 1975 is great for the economy, it also means that talent pools are shrinking. At a time of increased competition across all sectors, employers are now vying with one another to attract the people they need to fill their vacancies.
“But it’s getting harder and harder to find staff with the skills crisis worsening. While many organisations have their own talent banks to dip into, they tend not to be as large as the often-extensive networks that recruitment companies have.
“This by default is seeing demand for recruiters continue to rise – fuelling a sharp rise in the number of ambitious consultants eager to capitalise on the positive trading conditions and go it alone.”
Supporting this surge in growth is the burgeoning alternative finance market.
“One of the greatest barriers that had previously prevented would-be entrepreneurs from starting their own business was the lack of available finance – a consequence of the recession and the subsequent restrictions placed on the lending power of the banks.
“This has seen a growing number of new business owners turning their backs on traditional providers in favour of the more flexible and welcoming alternative finance providers.
“Therefore, growth in the recruitment industry is the result of improving hiring intentions combined with increased access to essential funds to get these new businesses off the ground – a rich mix that has never existed before now.”