149 recruitment agencies are in danger of sinking

Market analysis from the company shows that 456 recruitment agencies merit a strong rating whilst 149 are struggling so badly they are rated 'danger', something which should concern freelancers. A further 159 are likely to be taken over.

The author of the report Plimsoll Analysis - Recruitment Agencies, David Pattison, said the market simply cannot support the amount of UK recruitment agencies. Over the coming 12 months, this will lead to more radical consolidation whereby the strong companies buy up their distressed competitors.

Of course, it's not only recruitment agencies that are suffering financial difficulties. A lot of public sector suppliers are struggling to keep their heads above water. In the past 12 months, insolvencies involving private sector businesses that depend on the public sector for contracts rose by 47%.

Companies that rely on the public sector could be in for an even worse time as the government's austerity measures start to take effect. Construction, marketing, outsourcing and recruitment companies are already feeling the pain; not only because of the spending cuts but also because public sector bodies have had to delay making any decisions about spending.

Anthony Cork, a director at Wilkins Kennedy, pointed out that over the last 15 years the public sector has expanded enormously and the private sector support system has grown along with it. It was generally accepted that supplying the public sector was a safe bet but the credit crisis has shown that this is no longer true. The October Spending Review is also likely to make the current situation even worse, he added.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.
Image: Rusted out ship on the rogue river by tibchris