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The recruitment industry powers UK productivity, according to latest REC report

Date Posted: 5 July, 2021
The recruitment industry powers UK productivity, according to latest REC report


The recruitment sector is one of the UK’s most critical service industries, and it’s also one of the largest in Europe. In total, it supports an enormous £86 billion to the UK economy.

But here’s something you may not have realised – recruitment activity is also one of the most influential drivers of productivity across a wealth of other sectors.

This is according to the latest report, ‘Recruitment and Recovery’, by the Recruitment and Employment Confederation (REC). In the research, the REC sets out how the sector can bounce back from challenges of the coronavirus pandemic.

It appears that recruitment has a pivotal role to play in enhancing the productivity and competitiveness of the UK economy. Both will be essential in the wake of Covid-19 and the disruption caused by Brexit.

Matching the right people to the right role

This is one of the fundamentals of any recruiter’s work, but it’s also a major factor in UK productivity. According to the REC, the sector is boosting UK productivity by around £7.7 billion simply by improving the quality of matching.

By focusing expertise and resources to find the right fit, first time, recruiters are also helping employers swerve the eye-watering cost of a bad hire.

Only around 10% of companies told researchers that every worker they hire is a good fit. And to replace them, the business would need to shell out around £30,000 – plus the cost of advertising, recruitment, training and lost productivity.

But when a recruitment agency is used, around 77% of companies say they’ve ended up with a well-matched new employee. If the person is a top performer, they can contribute as much as 50% in value for the company.

Quality of staff is a key driver of business success

When surveyed by the REC, UK business owners said that the quality of their staff is the second most important driver behind the success of the company. Understandably, taking the top spot was the quality of the company’s end product.

Surprisingly though, employers also put the quality of staff ahead of things like management expertise and investment in new equipment. This further bolsters the importance of getting a good match between business and employee, so that companies can find the workers they need.

Temporary work creates a more agile economy

Another way that the recruitment sector supports productivity is through facilitating temporary and flexible work. This has been a major and increasing trend over the last few years, further accelerated by the pandemic.

Just under 20% of companies told REC researchers that they simply wouldn’t be able to operate without temporary workers. According to the report:

“For businesses or public sector organisations, having access to temporary workers makes it possible for their company to be far more agile. If you are a hospital, even in a non-pandemic year, it is impossible to perfectly predict how many patients you will have to look after during the winter months. Temporary workers can help a construction company scale up for a new infrastructure project, staff a one-off music festival or help a factory deal with a pre-Christmas rush.”


If you need expert recruitment support to help your business recover from the pandemic, get in touch with RGH today.