- 27 January 2023
-
Kristie Perrotte
Our friends at Firefish Software recently released their Future of the Recruitment Industry Report 2023, with some interesting findings!
In a survey conducted in 2021, 86% of recruitment agency leaders expressed optimism about the outlook for the industry heading into 2022. However, when the same question was asked at the end of 2022, the data showed a 14% decrease in the number of agency leaders reporting a “very optimistic” position heading into 2023. Additionally, the number of agency leaders taking a neutral position doubled from 14% in 2022 to 28% in 2023, and there was also a reintroduction of the pessimistic position, which no agency leaders reported in the previous year.
These shifts in sentiment can be attributed to a variety of external factors, such as talent shortages, economic uncertainty, and the recruitment industry finding a consistent rhythm following a post-COVID boom. These concerns are not unique to the recruitment industry, but are shared by business leaders across many sectors.
When asked about their outlook for the recruitment industry in 2023, more than 60% of recruitment leaders said they were either optimistic or very optimistic about the year ahead. However, for the first time in two years, a small percentage of agency leaders expressed pessimism and/or doubts about future economic realities.
Looking at regional outlooks, more than 75% of agency leaders in Northern England were optimistic about the year ahead, while Welsh leaders were the most cautious with 67% taking a neutral position. This regional variability in confidence levels is in line with global sentiment and is likely influenced by economic and industry-specific factors. For example, London saw a swing of almost 25% over the last 12 months, likely due to multiple US-based tech companies with offices in London announcing mass redundancies and/or hiring freezes in Q4 of 2022. Additionally, 86% of respondents believed that the UK will be in recession throughout 2023, which contributes to a more cautious outlook, however it is important to note that despite this, recruitment leaders are optimistic. This is likely do to the ongoing shortage of talent which has been amplified by Brexit, the skills shortage and overall demand outweighing supply. Employers continue to struggle to find talent and recruiters will therefore continue to be valued partners to solve hiring challenges.
In terms of sales growth, Southern England (excluding London) and Northern England had the highest percentage of agency leaders forecasting growth, while London had the lowest. Welsh leaders had the highest percentage forecasting no change in sales growth, while Scottish leaders had the highest percentage forecasting a decline in sales growth.
In conclusion, while the overall outlook for the recruitment industry remains positive, there are variations in sentiment and expectations by region. Agency leaders are adopting a more cautious approach heading into 2023, likely due to external factors such as economic uncertainty and talent shortages. Additionally, the industry is still finding its footing post-COVID and settling into a new normal. Business leaders will need to stay agile and adapt to these challenges to continue to be successful in the recruitment industry.
We recommend you download the report, Future of the Recruitment Industry Report 2023 from Firefish software, with some excellent insights and information on trends facing the industry amidst the changing economic environment.
