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Recrutiment & Employment Confederation

Resilient recruitment industry ready to help the UK bounce back in 2021

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This article was originally written as the special feature in the January 2021 edition of Report on Jobs.


This was a year like no other. 2020 has been, without a doubt, one of the toughest years for the recruitment industry in living memory. But in these unprecedented circumstances, recruiters have stepped up, supporting vital industries, helping the NHS care for patients and keeping the UK open for business wherever it could.

The REC’s latest UK recruitment industry status report found that in 2019, the staffing industry made around a million permanent placements and there were over 985,000 temporary and contract workers on assignment every day. This meant that the sector’s 31,000 enterprises contributed £42.3 billion to the UK economy, accounting for around 2.1% of UK direct GVA.

But having started 2020 in a strong position, the impact of COVID-19 on the labour market and recruitment industry has been profound. After the pandemic hit the UK in earnest and lockdown measures were introduced in late March, business confidence and hiring activity plummeted – as data from Report on Jobs shows. And though placement and vacancy numbers recovered through the late summer and autumn, especially for temporary work, rising COVID-19 case numbers and new restrictions have slowed the recovery.

All this means that 2020 saw a significant decline in both placement numbers by recruiters and their contribution to the economy. The REC estimates that the direct GVA of the industry fell by 22% between 2019 and 2020, while the number of permanent placements dropped by around 19%. The number of temporary and contract workers on assignment every day was also around 30% lower than it was in 2019.

The pandemic has presented a huge challenge for people and businesses across the UK, including the staffing industry. However, many recruitment companies have used the crisis as an opportunity to adapt, learning lessons and evolving their business. Many have focused on building and maintaining strong relationships with their clients and candidates, while others have shifted their focus towards different sectors or types of recruitment.

It is this flexibility that is one of the major strengths of the UK labour market and its recruitment sector. While it has been a struggle, the industry has risen to the challenges of 2020, supplying the vital workers that many businesses needed to stay afloat and placing hundreds of thousands of people into jobs during an unprecedented economic crisis.

We will need a strong recruitment industry in the months to come, as unemployment levels rise and more people need to be supported into work. But as a vital part of the professional services sector that empowers businesses and builds better futures for candidates, the UK’s recruiters are ready to help make great work happen in 2021.

UK recruitment industry status report 2019/20

The recruitment industry contributed £42.3 billion to the UK economy in 2019, accounting for 2.1% of UK direct Gross Value Added (GVA). Download our latest report mapping the state of our industry and where the opportunities lie as you plan for 2021 and beyond.

You can also download our exclusive toolkit with PowerPoint slides and GIFs to use in client presentations.(REC members only)