Recruitment Report 2023: Agencies Forecasting Slower Growth

As a recruitment agency leader, it can be difficult to gauge how businesses like yours have performed throughout the year and what the year ahead looks like. At the end of each year, we at FF conduct a survey to collate the thoughts and views of SME agency leaders across the UK and Ireland, establishing their plans and forecasts for what is to come in the year ahead. From this data, we are able to paint a picture of what the future of the recruitment industry will look like.

2022 was another whirlwind of a year throughout the recruitment industry. From talent shortages to economic and political pressures, it’s been another year of challenges, however if the last few years have taught us anything, it’s that recruiters always find opportunities in challenging times.

When we released our last recruitment report in 2022, the data showed recruitment agency leaders forecasting a positive outlook for the industry and predicting strong growth thorough the year. Looking at the data from the 2023 recruitment report, it's apparent that whilst confidence remains positive throughout the industry, confidence levels have retracted as agency leaders assume a more cautious outlook for 2023.

Some highlights from the report:

  • Recruitment agencies based in London are forecasting the slowest growth in 2023. 
  • More than 50% of recruitment agency leaders predict a revenue increase of 1-25% in 2023.
  • Over 60% of recruitment agencies are planning to increase their number of recruiters.
  • Almost 50% of agencies have made no change to base salaries in the last 12 months.
  • More than 75% of agencies have introduced flexible working hours in the last year.

It’s amazing to see confidence returning across the industry as recruitment agencies re-position and prepare for growth.

Recruitment agencies forecast slower growth in 2023

Our annual recruitment report, The Future of the Recruitment Industry 2023shows the cautious outlook for recruitment agencies in 2023.

90% of recruitment agency leaders predicted an uplift in revenue in 2022 however this has dropped to 77% heading into 2023. This swing sees the industry settle into a middle ground between the 2022 and 2021 figures, again signaling a return to normal operations.

There has also been an increase in the number of agencies forecasting a decrease in sales throughout the next 12 months. Further demonstration of the challenges that recruitment agencies are expecting to experience in 2023.

Recruitment Report Download CTA

Evolving candidate attractions strategies 

With candidates in high demand and short supply coupled with rising job board costs, 2023 will see recruitment agencies focus the core of their candidate attraction activities on social sourcing and re-engaging their existing candidate database.

It is estimated that 4 in every 5 job board applications come from candidates already in an agencies database so it’s no surprise to see so many agency leaders leaning on a re-engagement strategy in 2023. Ensuring cost-per-placement is kept to a minimum in a world of rising business costs.

Social sourcing also continues to trend upwards as a candidate attraction strategy, with an estimated 87% of recruiters using LinkedIn when searching for new talent.

Spotlight on recruiter retention and additional benefits

Retaining top talent has been challenge across all industries and the recruitment industry has been no different. We asked agency leaders if they have increased the base salaries of their recruiters in the last 12 months.

From the report data, it’s interesting to see almost 50% of recruitment agencies have kept base salaries the same throughout the year.

The report also shows an increasing trend of recruitment leaders introducing additional benefits for recruitment teams throughout the last 12 months. 

Download a full copy of the 2023 Recruitment Industry Report below.

2023 Recruitment Report CTA

Campbell Nelson

As Head of Marketing, Campbell oversees all the content and online marketing here at Firefish.

Subscribe to our blog and receive top content to help you reach, engage and recruit more effectively!