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Measuring the growth of the recruitment industry

 


IN BUSINESS, it is always good to know where you stand, which is why the recently-published results of a survey into the state of play of the recruitment industry will make for welcome reading for the professionals working in the area. Recruitment, it would seem, is growing, even as the economy begins to slow . . . which is not only good news for anyone working in the industry, but also a good indicator of the value of the recruitment sector for our overall economy.

The National Recruitment Federation Industry Survey, which was carried out by Lansdowne Market Research, was an all embracing look into the machinations of the industry, and used as its base all recruitment companies operating in the market. While some of the results are for industry consumption only, with little interest for the general population, some salient points were thrown up . . . most notably the fact that the estimated industry value for 2006 was 1.62 billion. This compared favourably with the 2004 value of 1.3 billion (no such survey was carried out for 2005), and demonstrated in terms of hard cash just how valuable the industry is becoming.

Another statistic which underlines the growth in the recruitment sector is the number of people directly employed. In 2005, it was around 10,000. The most recent results of the survey point to a figure closer to 13,000.

Also of interest were the numbers of permanent placements made by recruitment companies. In 2004, the industry was responsible for around 80,000 permanent placements. That figure had risen by 2006 to 108,850.

"This is a major indicator of the growth of the industry, " explained Frank Collins of Parc Group, president of the National Recruitment Federation (NRF). "But it is also an indicator of the current economy. When people are looking at the economy, they mostly look at the net number of new jobs created, but the reality is that there are a lot of positions being filled."

It is also evidence that more and more employers are looking towards recruitment companies for solutions to their labour needs.

"It is not that easy for a person to get a job on their own anymore, " said Collins. "But, equally, it is difficult for employers to source candidates, which is why agencies are increasingly being used in the recruitment process."

Still, while the industry is certainly growing, some things are staying the same. The areas covered by recruitment agencies are broadly the same, with the area covered by most agencies being office/secretarial (45% of companies have at least some function in this sector). This is followed by accounting, engineering, IT and banking, again reflecting the overall needs of industry.

Indeed, the recruitment industry can rightly claim to be as close to the heartbeat of employment trends as any other sector, which is why there was one very interesting piece of research carried out by Lansdowne Research on behalf of the NRF. It concerned the way in which recruitment companies rewarded their staff, with a decline in the importance of taking them to the pub, a decline in defined benefits pensions, and an overall raising of the importance of working from home, car allowances and defined contribution pension plans.

"We're at the coalface of what candidates are looking for, " said Collins. "The growth in defined contribution pensions and the decline in going to the pub are reflecting what is happening in the overall economy."

This symbiotic relationship between the employment market and the recruitment sector is further underlined by Robert Mac Giolla Phadraig, associate director with Sigmar Recruitment.

According to Mac Giolla Phadraig, the demand for recruitment services grew dramatically in the mid nineties with development of the Celtic Tiger - and since then has played an integral role in facilitating the development of the economy over the last 10 years in particular.

"The recruitment industry in Ireland did suffer something of an image problem in the late 1990s, " he admitted.

"During the boom times there was a significant rise in the number of agencies operating in the country as new staffing companies entered the market to cash in on the skills shortage."

In recent years, the recruitment sector has undergone substantial changes, with the downturn in 2001 helping to force what Mac Giolla Phadraig described as "unprofessional recruiters" out of the sector. This is yet another example of the parallels between recruitment and reality on the ground.

"In general terms, the performance of the recruitment industry is a key indicator of the success of the Irish economy, " he said. "We facilitate its growth, but we are also one of the first industries to feel the knock-on effect of what is happening throughout the market. Still, even with a wobble in the economy, the role of agencies is still growing . . . although the focus has changed dramatically over the past five year or so. Five years ago, the demand was for companies . . .

but that has reversed, and the demand is now for candidates.

But we will be here to meet whatever demand is required by the market."




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