Recruitment: the shape of things to come
With the press scattered with conflicting reports about the UK economy, we look at sector that could possibly hold some of the answers and what this means for the small business community.
A few pointers from a growing sector
The financial news over the last month or so has been full of clues about the future of the UK economy – it is just a pity they conflict. The Nationwide has reported its biggest observed house price jump in five months, whilst at the same time George Soros is telling his investors not to touch Britain with a bargepole. It’s a confusing picture but in uncertain times, the recruitment sector is a historically reliable indicator of what’s around the corner.
“Recruitment firms often find themselves at their busiest when a recession ends. One reason for this is that their clients, who have had to lay staff off during the leaner times, can then find themselves short of people-power when the upturn in orders arrives” says Karen Hamilton, head of broking at Cashflow UK.
“This puts skilled temporary staff in high demand and if growth continues, these temporary contracts tend to be converted to permanent employees over the long-term. So, when we see a rise in enquires from recruitment agencies, we get a good idea of what’s going on across the nation as a whole and this is exactly what we’re seeing. However, these are only initial indicators and caution should still be the name of the game for the business community.”
Although increased demand for temporary workers can only be seen as positive for recruitment agencies, it often causes increased cash flow pressure. Agencies are often required to pay employees weekly, while their clients might not settle an invoice for 60 days. And with the big banks exercising new-found caution, that vital buffer is proving difficult to source for many in the recruitment sector.
That’s where invoice finance makes sense at times of potential growth as it releases cash tied up in unpaid invoices. It can be a crucial tool for start-ups or established businesses looking to gain market share because it allows cash to be raised on the state of your client’s business now, not what they have experienced over the last two-to-three years.
For more information on invoice finance call Cashflow UK on 0800 132 156 for FREE, impartial advice.
