This year’s UK recruitment industry status report presents an industry rebounding strongly as the economy reopened after pandemic lockdowns. It shows the vital role the recruitment industry has played in economic recovery, at a time when businesses underwent significant change and workers reorganised.
This report primarily covers the period between January and December 2021, but also includes some insight from the first half of 2022. It makes use of data from a survey of recruitment businesses conducted in October 2022. 2021 saw COVID restrictions lifted and the end of the Coronavirus Job Retention Scheme (CJRS) that September. As such, it marks a period of economic and social recovery.
However, there were still significant challenges in this period. There was a continuation of lockdowns, significant labour and skills shortages across many sectors, and rising inflation.
Against this backdrop, the evidence presented in this report shows a highly successful year for the recruitment industry, with an estimated 21.7% increase in GVA from 2020 to 2021. Based on historical data, an increase in growth the year following an unprecedented event such as the pandemic is to be expected. However, the scale of this bounce back is testament to the hard work of recruitment businesses up and down the country. In addition to hiring activity returning to ‘normal’ so businesses could finally respond to pent-up demand, the UK also experienced a ‘Great Resignation'. Employees made different life choices and started to remove location as a deciding factor in a job due to the widespread adoption of hybrid working. The recruitment industry was put to work to reallocate workers throughout the economy. Such a strong performance of the industry shows the crucial role recruiters played in our country’s recovery from the pandemic, and the vital contribution it offers to the UK economy, society, and business community.
Looking at the financial situation facing businesses over the last six months, recruitment firms are starting to feel economic headwinds, such as soaring inflation and rising interest rates. The data shows the financial difficulties this can present, but also the commendable adaptability of the recruitment industry in these difficult circumstances.
The REC’s UK recruitment industry status report tells a story of an industry that is helping drive a recovery from one of the worst economic shocks in recent times. It clearly shows not only the value of the industry, but also the extraordinary resilience and grit of those who work in it.