Worldwide Business Information and Market Reports
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Key Note defines the employment agency industry as
businesses that are recognisably operating as employment agencies, nursing and
medical agencies, nannies' agencies and other personnel consultants.
According to the industry association, the Federation of Recruitment and
Employment Services (FRES), the employment agency industry achieved sales of
£16bn in 1998, of which 92.8 percent came from temporary (temp) business and
7.2 percent from permanent recruitment. This compares with £14.1bn for 1997.
The industry has enjoyed a considerable increase in turnover since the
mid-1990s. As a result, a large number of new businesses have been attracted
into it, which has created a competitive sector.
Large multinationals and
other major groups dominate the market and are continuing to grow organically
and by acquisition. Nevertheless, small, even single-office businesses can
achieve healthy results because clients buy on the individual service that they
receive rather than the size of the agency.
Employment regulation affecting
agencies has been lenient in the past, but during the 1990s it has become far
stricter. As a result, agencies will be hard-pressed to keep up, and face
ruinous penalties for `inadvertant' breaches of new legislation.
Legislation permitting, there is ample room for the industry to grow long term.
In the short term, growth is likely to be slower than in recent years. After
growth averaging 28.4 percent per annum in the period from 1996 to 1998, it seems
likely that 1999 will increase by 5 percent year-on-year to £16.8bn, and market
value is expected fall to £16.5bn in 2002.
Text © 1999 Key Note
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Last updated by Jacob van Eldik 24th January 2000