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Recruiter FAST 50 2014
FAST 50 firms show the way It seems the economy is turning a corner and with that, businesses in the UK are feeling more optimistic, allowing continued investment to stimulate growth and value creation. How this will impact directly on the recruitment industry is uncertain, however it would suggest that staff recruitment, particularly across the flexible workforce, will push forward as companies invest in their pool of labour to support growth initiatives. With high expectations moving into 2014, after an improved 2013 for many in the recruitment industry, this highly anticipated report showcases the 50 recruitment companies that have excelled in this last year. Compliance, more than ever, is at the forefront of a recruitment agency’s mind with increasing legislation, notably around offshore employment intermediaries and auto-enrolment. Our industry continues to see an ever-changing regulatory landscape, which requires careful planning and implementation, given the significant volume of individuals that we engage with. Our experience suggests that most recruitment agencies are well advanced when it comes to managing the risks and costs of new legislation — the position and challenge often being shared with their key partners to ensure that a workable and compliant solution is achieved, in an efficient yet fully compliant way. It is inevitable that we will continue to see further tightening of legislation as this industry continues to evolve, despite its maturity. ICS has been working with agencies since 2002 and has witnessed the struggles and triumphs within the industry. Providing accounting and payroll services to contractors and freelancers across many different industries, compliance is at the forefront of what we do. We work in partnership with recruitment agencies to ensure that together we deliver truly compliant solutions. We are very proud to sponsor the Recruiter FAST 50, as we are to enhance our relationships with recruitment agencies moving into 2014. Congratulations to all those listed in the FAST 50 and we wish you all a very prosperous 2014, with continued success and growth. John Lyon Managing director, ICS COMPILED BY
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Heralding a bright future
WELL OVER HALF OF THE FASTEST-GROWING RECRUITMENT COMPANIES ARE NEW ENTRANTS IN THIS YEAR’S RECRUITER FAST 50, SPONSORED BY ICS AND COMPILED BY BOXINGTON CORPORATE FINANCE. COLIN COTTELL SEES A RESURGENCE OF THE ENTREPRENEURIAL, SMALLER RECRUITMENT BUSINESS
I
f proof were needed of the dynamism and entrepreneurialism of the recruitment sector, this year’s FAST 50 rankings show these characteristic traits are alive and well. As the UK and many parts of the world economy continued its slow emergence from the economic crash of 2008-09, these predominantly small, entrepreneurial and forward-thinking recruitment firms were forging ahead of their competitors. With no less than 31 of this year’s FAST 50 being new entrants compared to 27 last year, this influx of new blood contributed to an impressive annual growth rate of 34%. Although growth was slightly down from 39% last year, this was a significant rise on the 26% achieved two years ago. Recruiter’s FAST 50, produced in association with mergers & acquisitions advisers Boxington Corporate Finance, ranks the fastest-growing private recruitment businesses in the UK (see Methodology box, right). Tim Evans, Boxington’s managing director, says this year’s FAST 50 “is another reminder of the entrepreneurial spirit within the recruitment industry, and a signal that small entrepreneurial recruitment agencies can stand up to the pressures from larger established players”.
Recruitment strength While last year’s (2013’s) FAST 50 reflected a tendency of clients to play safe during the depths of the recession by working with established players, this year illustrates how this reliance has weakened. Evans says that part of the explanation was the strength of the recruitment industry as a whole, which grew by 4.3% in the year ending 30 April 2012 to £25.7bn driven by greater use of temporary labour, according to the Recruitment & Employment Confederation (REC). “Last year it looked like the larger established players won the day, which
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RECRUITERS APPEARING IN AT LEAST FOUR CONSECUTIVE YEARS OF THE FAST 50 RANK
2011 RANKING
COMPANY
SECTOR
3 18 27
31 12 6
ID Medical Fircroft Engineering Services Global Medics
Healthcare Oil & gas Healthcare
Three of this year’s FAST 50 show their staying power by appearing in the FAST 50 for the fourth consecutive year, demonstrating that special ability to combine consistency and strong top line growth. “These are standout performers that have done well to manage consistent growth over four consecutive years,” says Mark Kingston, senior executive at Boxington. in very difficult markets they will do,” says Evans. “But in a growing market” he continues, “there is everything to play for between the smaller specialist players and larger established players.” Mark Kingston, senior executive at Boxington Corporate Finance, says the makeup of the list illustrates how the balance of power between the two groups
has shifted. “This year we are seeing a resurgence of entrepreneurial smaller businesses who seem to be coming through, and who are winning the battle against these larger more established recruitment businesses,” he says. Kingston says that while many would argue that it is more difficult to sustain FAST 50 growth rates when you are a £500m
METHODOLOGY The Recruiter FAST 50 prepared by Boxington Corporate Finance lists the fastest-growing private recruitment businesses in the UK according to compound annual sales growth rate as measured over each entrant’s most recent three-year financial reporting period.
CRITERIA FOR INCLUSION: The FAST 50 assesses temporary and/or permanent recruitment companies which are registered in the UK as private, independent and unquoted companies. This category includes private companies that are co-owned by private equity. All companies considered for inclusion must achieve annual sales of £5m or above in each of their last three financial years. EXCLUSIONS: Companies that have filed abbreviated accounts at Companies House without disclosing audited sales are excluded from the FAST 50 due to the absence of independently validated sales. Unaudited management accounts are not accepted as proof of sales. Companies that serve the recruitment sector through the provision of IT, payroll, administrative or other services also do not quality. DATA COLLECTION METHODS: Qualifying companies are automatically identified through several research methods including the analysis of sector information from Companies House, financial databases, press coverage and other research. Entry submissions are not therefore required, although any firm which believes that it may not be automatically assessed in next year’s FAST 50 2015 is invited to contact Boxington Corporate Finance. Please email fast50@ boxington.co.uk
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30
RANK
2013 RANKING
COMPANY
SECTOR
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
1 9 14 27 37 50 34 26 31 6 16 18 40 41 23 17 43 48 20 -
Interact Medical Oliver James Associates ID Medical Fusion People Amoria Bond Arrows Group Global Carlton Resource Solutions Serocor Holdings First Point Group Castlerock Recruitment First Recruitment Group Assist Recruitment People Source Tangent International ITHR Group Cobalt Consulting Brightwork Fircroft Engineering Services Omega Resource Group JAM Recruitment Eurostaff Group e-resourcing Change Recruitment Berry Recruitment Aspire Global Network Quanta Consultancy Services Global Medics Air Energi Newcross Nursing Group Systems Accountants AAA Group Industrious Outsource UK Faststream Premier Group Strategic Resources Contract Scotland PPF Templine Dutton International Gap Personnel Resource Solutions Group 1st Step Solutions Nurse Plus & Carer Plus Redrock Consulting Corepeople Recruitment Orion Tulloch Recruitment Mentor IMC Computappoint
Healthcare Finance Healthcare Multi-sector IT, banking, oil & gas IT, healthcare Multi-sector Technical, IT, engineering Telecoms Healthcare Technical Industrial IT IT, telecoms IT Multi-sector Multi-sector Oil & gas Technical, oil & gas IT, engineering, defence Technology IT, telecoms Multi-sector Multi-sector Marketing, media Multi-sector Healthcare Oil & gas Healthcare IT Multi-sector Industrial IT, technical, engineering Maritime, oil & gas IT, media, engineering Oil & gas Construction, engineering Industrial, driving Logistics, industrial Multi-sector Industrial IT, change Mechanical and electrical engineering, construction Healthcare IT, telecoms Multi-sector Oil & gas Engineering, industrial Oil & gas IT
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About Boxington: Boxington Corporate Finance is a sell-side M&A house specialising in international human capital and recruitment and advising private and private equity owners of businesses with operating profits of £2m-£20m. www.boxington.co.uk
COMPOUND ANNUAL GROWTH RATE %
LATEST YEAR
REVENUE £000s
WEBSITE
65.59% 62.86% 62.44% 57.82% 55.00% 53.62% 53.06% 49.11% 43.80% 42.13% 41.10% 38.33% 36.36% 36.19% 35.37% 34.49% 34.25% 33.85% 33.41% 32.87% 31.80% 31.79% 31.60% 30.90% 30.60% 30.41% 30.08% 29.57% 28.85% 28.68% 28.58% 28.52% 28.00% 27.19% 26.93% 26.01% 24.93% 24.78% 24.00% 23.73% 23.46% 23.00% 21.12% 20.71% 20.46% 20.17% 20.08% 19.87% 19.25% 18.77%
2012 2012 2012 2012 2012 2013 2012 2013 2013 2012 2012 2012 2013 2013 2013 2012 2012 2012 2012 2012 2012 2013 2012 2012 2012 2012 2012 2012 2013 2012 2012 2012 2012 2013 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012
37.9 46.7 62.5 102.6 20.3 29.1 22.4 168.7 41.7 18.0 101.5 21.3 10.9 47.2 43.5 10.8 31.8 725.4 29.1 14.7 30.4 11.8 16.7 37.9 13.0 22.6 40.1 171.9 31.9 21.7 13.3 28.0 31.7 26.3 11.6 34.9 13.2 89.3 36.6 33.0 72.1 164.0 19.8 18.9 24.7 18.8 355.2 25.0 44.0 21.2
www.interactmedical.co.uk www.ojassociates.com www.id-medical.com www.fusionpeople.com www.amoriabond.com www.arrowsgroup.com www.carltonrs.com www.serocor.com www.firstpointgroup.com www.crg.uk.com www.firstrecruitmentgroup.com www.assist-recruitment.co.uk www.peoplesource.co.uk www.tanint.com www.ithrgroup.com www.cobaltrecruitment.co.uk www.brightworkltd.com www.fircroft.com www.omegaresource.co.uk www.jamrecruitment.co.uk www.eurostaffgroup.com www.e-resourcing.co.uk www.changejobs.net www.berryrecruitment.co.uk www.aspireglobalnetwork.com www.quanta-cs.com www.globalmedics.com www.airenergi.com www.newcrosshealthcare.com www.systemsaccountants.com aaajobs.co.uk www.industriouspeople.com www.outsource-uk.co.uk www.faststream.com www.premiergroupuk.com www.strategic-resources.co.uk www.contractscotland.co.uk www.ppfplc.com www.templinerecruitment.co.uk www.duttoninternational.com www.gap-personnel.com www.rsg-plc.com www.1ststepsolutions.co.uk www.nurseplusuk.com www.redrockconsulting.co.uk www.corepeople.com www.orionjobs.com www.tullochrecruitment.co.uk www.mentorimcgroup.com www.computappoint.co.uk
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turnover company, on the other hand it is also arguable that “larger companies have a bigger platform to play from”.
Returning companies Another feature of the 2014 FAST 50 is the number of staffing companies that have returned to the table after an absence in recent years. “This is a reminder that growth in recruitment is not regular and does ebb and flow,” says Evans. Among these FAST 50 returners are First Point Group (9th), Eurostaff (21st), Outsourcing UK (33rd) and Mentor (49th). If small fast-growing entrepreneurial recruitment agencies are the defining characteristic of this year’s FAST 50, having the right growth strategy is also a key driver of FAST 50 success. One factor, a focus on international and emerging markets, in some cases to make up for relatively stagnant growth in the UK domestic market, revealed in previous recent FAST 50s, continues be a significant growth driver. “International sales remain an important source of growth for many FAST 50 companies,” says Kingston. Companies such as telecoms recruiter First Point Group, technical recruiter Arrows Group, and oil & gas recruiters Fircroft Engineering Services and Air Energi have all benefitted from this strategy.
Sector choice Another factor driving growth is the sector in which firms operate. While in the 2013 FAST 50 12% of recruiters were in the finance sector, this year finance recruiters are notable by their absence. The only exception is last year’s top-ranked firm Oliver James Associates, who drop just one place to second. “This suggests that the much-heralded return of the financial recruitment market may have been overstated,” says Evans. In contrast healthcare, which has doubled its FAST 50 representation from three to six companies in the past year, including two of the top three performing firms, “is the standout sector”, says Evans. This is due to increased use of temporary agency staff in the NHS, as well as a reduction in the number of suppliers as the NHS increasingly
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FINANCE: 2% OF FAST 50 2014 COMPANIES FAST 50 2014 Rank Company 2
Oliver James Associates
The continued weakness of the finance sector in the aftermath of the financial crisis is reflected by the sector only having one representative this year compared with six 12 months ago. “Our view is that many recruiters in the sector will come back strongly again as banks return to health,” says Tim Evans, managing director of Boxington Corporate Finance.
HEALTHCARE: 12% OF FAST 50 2014 FIRMS FAST 50 2014 Rank Company 1 3 10 27 29 44
Interact Medical ID Medical Castlerock Recruitment Global Medics Newcross Nursing Group Nurse Plus & Carer Plus
Healthcare is the standout sector, doubling its representation on the FAST 50 to six, with firms recording an average growth rate of nearly 42%
INDUSTRIAL, LOGISTICS AND CONSTRUCTION: 14% OF FAST 50 2014 COMPANIES FAST 50 2014 Rank Company 12 32 37 38 39 41 48
Assist Recruitment Industrious Contract Scotland PPF Templine Gap Personnel Tulloch Recruitment
A fiercely competitive sector, where margins are under constant pressure and success is hard earned
IT: 18% OF FAST 50 2014 FIRMS FAST 50 2014 Rank Company 13 14 15 21 22 30 42 45 50
People Source Consulting Tangent International ITHR Group Eurostaff Group e-resourcing Systems Accountants Resource Solutions Group Redrock Consulting Computappoint
A tough sector buoyed by demand for contract staff that is not going to go away
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MULTI-SECTOR: 36% OF FAST 50 FIRMS FAST 50 2014 Rank Company 4 5 6 7 16 17 20 23 24 25 26 31 33 34 35 40 43 46
Fusion People Amoria Bond Arrows Group Global Carlton Resource Solutions Cobalt Consulting Brightwork JAM Recruitment Change Recruitment Berry Recruitment Aspire Global Network Quanta Consultancy Services AAA Group Outsource UK Faststream Premier Group Dutton International 1st Step Solutions Corepeople Recruitment
Multi-sector recruiters have done well in this year’s FAST 50, increasing their representation from last year’s 26% to 36% this year
OIL & GAS, TECHNICAL AND ENGINEERING: 18% OF FAST 50 2014 FIRMS FAST 50 2014 Rank Company 8 9 11 18 19 28 36 47 49
Serocor Holdings First Point Group First Recruitment Group Fircroft Engineering Services Omega Resource Group Air Energi Strategic Resources Orion Mentor IMC
Ongoing worldwide skills shortages and exposure to rapidly growing new markets contributed to an impressive showing by firms in these sectors moved to framework agreements, explains Kingston. The success of multi-sector recruiters in the FAST 50 2014, which account for 36% of the total compared with 26% last year can be attributed to those companies benefitting from broad exposure to multiple sectors as the economy began to show signs of recovery, says Evans. Kingston notes that while in previous
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years, growth through mergers & acquisitions have contributed to both the performance of individual companies and thus to the rankings as a whole, M&A activity plays almost no role in this year’s table. “The lack of M&A activity shows that having come through a difficult few years, private owners are focusing on capitalising on the organic growth activities rather than engaging in M&A to grow,” he says.
While the growth figures of companies in this year’s FAST 50, covering their 2012 and in some cases 2013 accounts, were achieved before this year’s sustained growth in the UK economy, Kingston says the table illustrates how recruitment continues to be a leading indicator of the general economy. “Recruitment firms will always be in the forefront of a recovery as FAST 50 firms have shown,” he says. Looking beyond the top-ranked firm, new entrant Interact Medical, Kingston says that three firms in particular stand out: Fircroft Engineering Services, ID Medical and Global Medics all appear in the FAST 50 for the fourth consecutive year. “These are standout performers that have done very well to manage consistent growth,” he says.
Strongest outlook Looking ahead to next year’s FAST 50 and beyond, Evans says he expects to see a number of newer firms that didn’t quite make this year’s rankings enter the 2015 FAST 50. Evans says that good examples of firms “who are building a momentum for growth” are oil & gas recruiter Spencer Ogden, and specialist risk and compliance recruiter Grovelands Resourcing. Kingston says that given this year’s recovery in the UK economy, there are strong reasons for optimism for the sector generally. “This is the strongest outlook from a macroeconomic point of view since the FAST 50 began in 2008-09,” he says. “We are more positive than ever before, and barring unforeseen holes in the road, we would expect average growth rates to increase and for new players to continue to emerge.”
About Boxington: Boxington Corporate Finance is a sell-side M&A house specialising in international human capital and recruitment and advising private and private equity owners of businesses with operating profits of £2m-£20m. www.boxington.co.uk
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