1. Foreword ......................................................................................................................................................

2. Executive Summary ...................................................................................................................................... 3

3. Survey Objectives and Methodology ............................................................................................................ 4

3.1 Survey Objectives ........................................................................................................................................ 4
3.2 Survey Design .............................................................................................................................................. 4
3.3 Survey Distribution ...................................................................................................................................... 4

4. Key Findings .................................................................................................................................................. 4

4.1 Profile of Respondents ................................................................................................................................ 4
4.2 The Recruitment Market ............................................................................................................................. 5

4.1.1 Summary of the Recruitment Market ...................................................................................................... 8

4.3 Product Information .................................................................................................................................... 8

4.3.1 Summary of Product Information ............................................................................................................ 9

4.4 Consumer Needs and Satisfaction ............................................................................................................... 9

4.4.1 Summary of Consumer Needs and Satisfaction..................................................................................... 10

4.5 Price Information ....................................................................................................................................... 10

4.5.1 Summary of Price Information .............................................................................................................. 12

4.6 Promotion Information.............................................................................................................................. 12

4.6.1 Summary of Promotion Information ..................................................................................................... 12

5. Conclusion ...................................................................................................................................................12

6. Discussion ....................................................................................................................................................13

Contact Details .....................................................................................................................................................14

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1. Foreword
John Philpott, of the Chartered Institute of Personnel and Development, said that the labour market was
now close to its peak, and that the rise in unemployment could be more sudden and sharp than in
previous economic downturns1.

At 5.2%, the unemployment rate is currently the lowest for many years. The warning comes amid
growing fears that, having enjoyed some of its best months on record, the jobs market is set for an
imminent deterioration.

He said: “The conditions are building for an avalanche – the question is whether there will be a trigger
point. I suspect the housing market will hold the key. If you get a bigger shock than people are
anticipating that will have a knock-on effect, which could cause jobs to tumble.”

He said that because of the way employers had behaved in recent years, tending to hoard labour and
limit wage increases rather than laying off workers, there may be a sudden rise in redundancies rather
than a gradual increase. This would mirror the experience in the US, where unemployment suddenly
leapt dramatically a few months ago.

This outlook is reinforced by CIPD’s winter 2008 LMO survey, which indicates a greater degree of
pessimism and a sharp increase in the proportion of employers expecting to make at least some staff
redundant2. Furthermore, employers surveyed anticipate recruitment difficulties.

The LMO survey goes on to suggest that employer expectations are more strongly influenced by recent
past economic conditions than by possible future weakness. Is the recruitment industry equally reactive
rather than proactive when it comes to future planning? What exactly are the future trends of the UK
recruitment industry?

2. Executive Summary
This survey shows that recruitment companies are bucking the trend towards specialisation – the old
maxim “get big, get niche or get out” seems not to be heeded by the respondents.

Respondents demonstrated that they were risk averse; the lack of staff turnover indicates that a sense
of complacency exists. This may, in part, be attributed to the high value placed on relationships between
consultants and clients. This in turn exposes organisations to the risk of data shrinkage when staff do
leave.

The inability to identify opportunities associated with major events re-enforces the impression that
many respondents lack vision and/or the ability to see beyond the tactical elements of their job.
Strategic thinking, planning and informed decision making were not demonstrated by the majority of
the respondents.

1
Avalanche of UK job cuts feared by Edmund Conway, Economics Editor of The Daily Telegraph, 29th April 2008
2
CIPD: Labour Market Outlook – Quarterly Survey Report Winter 2008
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3. Survey Objectives and Methodology
3.1 Survey Objectives
Collier Pickard conducted this survey from 4th March to 9th April to identify current and future trends in
the UK recruitment industry. The survey was intended to:

define the market and its structure and identify economic and political influences
provide information on the use of technology, services and attitudes towards new products
unearth current corporate needs and satisfaction levels
understand price sensitivity and values attached to software products and services
identify the scope of information sourcing

The objective of the survey is to stimulate a broader debate on how recruitment people currently
conduct their business and whether or not there is scope for improvement. Current market conditions
as well as political influences play a major role on business activity but what exactly are the major pain
points and what is being done to ease the pain and solve the problems?

3.2 Survey Design

The survey questions and design were developed by Collier Pickard. Survey questions were primarily
closed-ended to elicit uniform, comparable and measurable responses. However, respondents were
given the opportunity to add written comments where appropriate.

Prior to distribution, the survey was piloted to a small group of industry leaders to test the relevance of
the questions and survey mechanics. Survey respondents were promised that individual responses and
company-specific information provided directly to Collier Pickard would remain confidential. The survey
was web-based.

3.3 Survey Distribution

The survey targeted senior decision makers at employment agencies throughout the UK with between 5
to 50 employees. The survey was distributed via the following methods:

Direct contact: an invitation to the survey was sent to the appropriate corporate representative
by traditional mail-shot (flyers)
Direct contact: an email campaign was sent to the appropriate corporate representative with a
direct link to the online survey
Indirect contact: information about the survey and a direct link to the survey website was placed
in UK Recruiter’s newsletter #351

4. Key Findings
4.1 Profile of Respondents
81.8% of the respondents fully completed the survey – therefore, not all the graphs in this report add up
to 100% as not everyone answered all the questions.

Overall, there was a good spread of responses from companies of varying sizes, as responses were
collected from each category of company size, as seen in Figure 1. Furthermore, there was an even
spread of companies in terms of the range of sectors covered, with no relation between the size of a
company and its level of specialisation.

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While the sample group of each company size was not large enough to yield statistically significant
results, the data is relevant and provides insight when cross-referencing particular answers. For
example, do smaller companies feel the pinch of the economic climate more than the bigger ones?
Where relevant, company size was factored in when analysing respondents’ answers.

4.2 The Recruitment Market

Turnover in the UK's recruitment industry leapt by more than 7% to a new record high of more than
£26bn in 2007, according to industry reports3. But has the credit crunch and general state of the UK
economy affected confidence levels in the recruitment industry in 2008? This section uncovers some of
the industry trends, including key economic and political influences.

Although a quarter of respondents could not determine whether or not there is strong growth in the
recruitment industry, the good news is that nobody was a complete pessimist. There was a heavier lean
towards the positive attitude with 41% strongly agreeing/agreeing that there is strong growth in the
recruitment industry, with only 31% disagreeing, as seen in Figure 2. However, there was a tendency for
smaller companies to be less positive about growth in the industry than larger companies.

How sensitive is the recruitment market towards specific political/economic events, as opposed to the
general economic climate? Figure 3 shows half of the repondents strongly agreed/agreed that the 2012
Olympics will boost the recruitment sector; over a quarter responded with neither and just under a fifth
disagreed. Again, this positive attitude is good news for the industry and the challenge is for recruitment
companies and HR teams to understand how their industry will be affected and identify the skills

3
REC in Personnel Today: http://www.personneltoday.com/articles/2007/11/02/43131/recruitment-and-
employment-confederation-survey-finds-uk-recruitment-turnover-hits-record-high-of-mo.html
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needed. The message is this – the Olympics provides a great opportunity to offer work placements and
apprenticeships to help build a skilled workforce for 2012, but employers need to plan early enough4.

Although respondents were generally positive about growth in the recruitment industry and the 2012
Olympics boosting the recruitment sector, the bad news is that financial pressures are felt by two-thirds
of the respondents given the current economic climate – see Figure 4.

Given this outlook on the economic climate, how does this affect the stability of jobs within the
recruitment industry? Will financial pressures lead to a rise in redundancy levels or will employers,
despite financial pressures, be willing to invest the time, effort and money on training employees in the
hope of retaining them?

Research has shown that maximising opportunities for individual employees to develop their skills has a
positive effect on improving retention5. Indeed, according to this study, the two correlate with each
other as three-quarters of the respondents place a high level of importance on training employees and
there is currently a relatively low staff turnover rate (see Figure 5).

4
Personnel Today: http://www.personneltoday.com/articles/2005/08/09/31089/race-is-on-to-meet-olympic-
challenge.html
5
CIPD: http://www.cipd.co.uk/subjects/hrpract/turnover/empturnretent.htm
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With the low turnover rate in the recruitment industry, recruiting the right people becomes even more
crucial, as illustrated in Figure 6. An overwhelming 88% of the respondents agreed that the need to
recruit the right people is becoming evermore paramount – no-one disagreed with this statement.

Finding and successfully recruiting the right staff is a challenge for any organisation and is the most
frequently reported barrier to growth amongst SMEs. CIPD reports that 85% of organisations report
recruitment difficulties, mainly due to a lack of specialist skills or relevant experience6. As recruitment
bears a significant business cost and requires substantial investment of time and effort throughout the
process, getting it wrong can be a costly affair – in more ways that just financial. Employers are
therefore being forced to consider how their approach to recruitment reflects their wider business
strategy. Having the right recruitment tools and methods to do the right job for them therefore
becomes key.

UK Recruiter predicted the following for 2008: The government will lose more personal details, more job
board users will be targeted with fraud/phishing emails and keeping details secure online will become a
massive issue for all internet users. There will be a cultural change from being free and easy with
personal details online to being more guarded and secure7.

This survey reflects this prediction – the majority of the respondents, 47%, believe that online security
will indeed become a massive issue for Internet users – only 19% disagreed (Figure 7).

6
Investors in People Direct: http://www.investorsinpeopledirect.co.uk:92/recruiting-people.aspx
7
UK Recruiter: http://www.ukrecruiter.co.uk/recnet/ukrecruiter_newsletter_338.html
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However, when respondents were given the opportunity to voice their current industry worries, there
was an overall consensus that economic/government issues affect their business the most. Other areas
of concern included shortages in candidates and skills and the questionable conduct of recruitment
companies. Clearly, recruitment companies are sensitive toward the current state of the economy.

4.1.1 Summary of the Recruitment Market

The economic slowdown; financial issues; online security; government legislation; shortage of skills;
securing best recruitment practices… These are just some of the concerns currently affecting
recruitment companies. And yet, despite the apparent gloom of the UK economy rubbing off on to the
recruitment industry, there remains optimism. Respondents see the Olympics in a positive light and
most people believe there is still room for growth in the recruitment industry. The real challenge is not
only to keep this optimism alive but also to turn these concerns into opportunities.

4.3 Product Information

Recruitment companies like to think they’re technologically on top of the game. Whilst almost four-
fifths of the respondents emphasised the importance of their recruitment software being
technologically advanced, the crux of the issue is, what solutions do they use? And what are their true
attitudes towards new technologies?

Only 19% of the respondents currently use a web-based CV capture system and 53% don’t. Also, only
19% currently use a web-based client tracking system and 69% don’t. As mentioned in the previous
section, this may be due to concerns over online security. Unsurprisingly, the most popular method for
tracking clients therefore appears to be by using in-house systems – see Figure 8.

Recruitment Process Outsourcing involves the delegation of responsibility for the entire recruitment
process to a third party. Proponents of RPOs claim that the solution offers improvement in quality, cost,
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service and speed. Nonetheless, 82% of respondents indicated a prefererence towards being in direct
control of the recruitment process, wheres only 9% take advantage of RPOs – see Figure 9.

4.3.1 Summary of Product Information

Recruitment companies like being in full control of their business. Delegating the recruitment process to
a third party appears to be unpopular and there is a strong preference towards using in-house client
tracking systems. This protective attitude may pose as a challenge for alternative solutions, fresh ideas
and new technologies.

4.4 Consumer Needs and Satisfaction

So recruitment companies like to be in control – does this guarantee user satisfaction?

It would appear so. Two-thirds of the respondents are satisfied with the functionalities of their current
recruitment system and only 22% are dissatisfied. Similarly, almost two-thirds of the respondents are
satisfied with the services and technical support of their recruitment software supplier and only 9% are
dissasfied – see Figures 10 and 11. This is good news for recruitment companies as they have found
what works well for them. However, could this be a case of not knowing the unknown? In other words,
do people think they are happy with their current recruitment system just because they are unaware of
other and better alternatives?

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Interestingly, when probed with the question “What factors influence your choice of recruitment
software”, the top three words/phrases mentioned were:

Price/Cost/ROI – in other words, how much will it cost?

Ease of use/usability/intuitive/simplicity – simply put, how easy is it to use?
Functionality/technical ability – i.e. can it do the job?

In terms of software functionality, it comes as no surprise that the most important software capabilities
were client/candidate related, such as logging, matching and searching, as well as reporting for
management use and being less complicated overall.

4.4.1 Summary of Consumer Needs and Satisfaction

Satisfaction levels amongst recruitment companies run high – people are happy with the functionalities
of their current recruitment system as well as the services and technical support of their suppliers. But
what is the key to their happiness? It would appear to be the following:

Money. Keep the costs down, or at least maximise the perceived value for money.
Easy life. People want systems that are easy to use. No headaches, thanks!
Functionality. A system must do the job correctly, quickly and be technologically up to date.

4.5 Price Information

Money is definitely on everyone’s minds, but does money really talk that loud and clearly? How elastic
are people really, when it boils down to product preferences and choices?

When respondents were prompted with the open-ended question “What factors influence your choice
of recruitment software?” almost half mentioned price, cost and/or ROI. Also, 68% of respondents
consider price to be an important consideration when purchasing software – see Figure 12. This is
probably a reflection of the current credit crunch (see also Figure 4) as companies are more conscious of
what and how much they spend their money on.

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Contraversially though, 38% said price is less important; what matters more is functionality and support
– see Figure 13. Only 15% stuck with their guns and regard price as king. The figures don’t quite add up
and opinions are slightly contradictory. Could this mean that people like to think of themselves as
financially savvy and cost-aware in times of economic gloom when really, when it comes to it, other
factors play a purchasing role?

Equally contraversial, even though respondents place great importance on price when purchasing
recruitment software, only a quarter would switch software supplier if it meant saving them money. Just
over a quarter wouldn’t bother switching and almost a third couldn’t say either way – see Figure 14.

Generally, people are creatures of habit and tend to greet any major changes with some apprehension.
Moreover, people rarely purchase a product based solely on price – other cost factors play a deciding
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role when considering switching to another recruitment software supplier. Such non-financial costs
include upgrades, migration/conversion, hardware maintenance, software development and
integration, software maintenance, operation of new systems, training of users and disposal of out-of-
date machines.

So yes, money talks, but inaction also speaks volumes.

4.5.1 Summary of Price Information

Money is on everyone’s minds but the reality is money isn’t everything. People are fairly inelastic when
it comes to changing recruitment solutions in order to save money and this is probably due to other
factors determining the true total cost of making such a change. However, there is a real danger of
people slipping into a comfort zone and not realising true potentials of not only saving money but also
staying ahead of the game.

4.6 Promotion Information

How savvy are recruitment companies when it comes to sourcing knowledge? Do they keep their fingers
on the recruitment industry pulse? This section unearths hot spots for information gathering.

57% of the respondents are confident in using the Internet to source information on new technology.
Just over a fifth couldn’t say either way and 6% don’t think the Internet is easy to use. But not only is the
internet a popular resource for intelligence; 60% also use trade magazines, newspapers and other
published sources to acquire knowledge. Other methods of staying in tune with the market include
networking and membership of trade bodies. One respondent summed it up when asked where they
source their information on recruitment – “all over and nowhere specific”.

4.6.1 Summary of Promotion Information

Respondents like to cast their net far and wide when collecting information on recruitment. These
sourcing methods include using the Internet, networking, membership of trade bodies and subscriptions
to magazines, newsletters and newspapers. This is a rich and varied selection of sources and the key will
always be converting knowledge into advantageous and profitable practice.

5. Conclusion
This extensive research into the recruitment industry has highlighted the following:

The market and its structure: The state of the economy, financial issues, online security, skills
shortages, government legislation and securing best recruitment practices are current hot topics
of concern for recruitment companies. And yet, despite the apparent gloom, there remains
optimism. The real challenge is not only to keep this optimism alive but also to turn these
concerns into opportunities.
The product: Recruitment companies like being in full control of their business. Delegating
recruitment processes to a third parties is unpopular and there is a preference towards using in-
house systems. This protective attitude may pose as a challenge for alternative solutions.
Needs and satisfaction: Satisfaction levels amongst recruitment companies are high. What
keeps them happy are keeping costs down, easy to use systems and up-to-date solutions that
can execute the job quickly and reliably.
The price: Money is on everyone’s minds but people can be inelastic when switching
recruitment solutions to save money as many other factors determine the true total cost of
undergoing such a change.
Information: Respondents are savvy when it comes to acquiring recruitment knowledge.
Sourcing methods include using the Internet, networking, membership of trade bodies and
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 subscriptions to magazines, newsletters and newspapers. The key is converting knowledge into
profitable practice.

6. Discussion
So here’s the remaining question: The Future of Recruitment in the UK – Death or Glory?

The UK recruitment industry has certainly been enjoying days of glory with impressive turnover rates,
reaching an all-time high of more than £26bn in 2007. The industry has proved itself to be robust and
versatile. But perhaps the glorious days of roaring success and growth are starting to end as companies
are feeling the gloom of the economy and people are tightening their purse strings.

The knock-on effect of this is that respondents have become risk averse; the lack of staff turnover and
the unwillingness to consider alternative recruitment processes and solutions indicates a sense of
complacency. It is true that the state of the economy is a major worrying factor, but the inability to
identify opportunities associated with major events re-enforces the impression that many respondents
lack vision and the ability to see beyond the tactical elements of their job. Strategic thinking, planning
and informed decision making were not demonstrated by the majority of the respondents.

Death may not be knocking on the recruitment industry’s door just yet, but it is up to people to use their
intellectual hold and resourcefulness to prepare for future weaknesses rather than react to past
economic conditions – when it’s too late.

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Contact Details
For more information on this survey and/or the products and services of Collier Pickard Ltd, please
contact:

Mike Collier
Managing Director
Collier Pickard Ltd.
Phone: 01959 560410
Email: mike.collier@collierpickard.co.uk

Alan Joenn
Account Director
Collier Pickard Ltd.
Phone: 01959 560410
Email: alan.joenn@collierpickard.co.uk

Sue Allen
Sales Executive
Collier Pickard Ltd.
Phone: 01959 560410
Email: sue.allen@collierpickard.co.uk

Eva Gross
Marketing Assistant
Collier Pickard Ltd.
Phone: 01959 5603410
Email: eva.gross@collierpickard.co.uk

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