Supporting recruitment businesses: providing the means to match the mindset!

This is a guest blog from REC business partner Bibby Financial Services.

In our previous blog, shared with REC members in June, we discussed the sense of "wait and see" amongst businesses with upcoming political and economic changes expected. We also had similar conversations with members we met at REC Live. Since then, the landscape has indeed experienced change: interest rates have been cut for the first time since March 2020, and Labour has taken the helm following the July elections.  

Our recent “temperature check” of businesses indicates sentiment has moved from cautious observation to cautious optimism. According to our latest SME Confidence Tracker, which surveyed 1000 SMEs, 68% of businesses now expect growth—marking a 7 percentage point increase since earlier this year. The increased optimism is notable in areas such as recruitment of staff, with 26% of SMEs stating this as a key target area for investment in the next six months. This demonstrable intention to hire across sectors acknowledges the critical need to attract the skilled workforce needed to unlock growth. 

Whilst there is growing optimism, the economic realities are still biting. 21% of SMEs cited recruitment of staff and labour shortages as a key challenge for their business today. This challenge is even greater in resource-intensive sectors such as construction, manufacturing, and services. Pressure on businesses is further compounded by continued high operational costs and an uptick in bad debts, increasing pressure on cash flow. 

As the business community looks towards the Autumn Budget, there is opportunity and risk for the recruitment sector. With an expectation of changes in the level of flexibility around employment contracts, there may come increased costs and administrative burdens for businesses, which could suppress recruitment. However, with the challenge of recruiting staff already present, overlaying contractual changes could bring the need to hire the right people into sharper focus. Those providing specialist support, who are in a position to capitalise on an uptick in demand for their services, could be well positioned for growth. 

Enabling the growth of the recruitment sector is something Bibby Financial Services (BFS) has been focused on for four decades. Businesses need working capital to expand. External funding, specifically Invoice Finance, could be key to unlocking growth potential and releasing working capital tied up in invoices in a more timely manner without taking on additional debt. Our confidence tracker shows the need for external finance has grown, with almost half of SMEs now more likely to use it than they were just six months ago. Exploring funding options could provide businesses with the means to match the mindset! 

Bibby Financial Services (BFS) is well-placed to upweight support for recruitment businesses. Currently, we are providing c.£60 million in funding to our recruitment clients, with a combined annual turnover of c.£1 billion. The recruitment sector represents around one in ten of our total client base, demonstrating our commitment and expertise in serving the industry. With a strong presence across the country, our local experts can provide tailored support to the sector, ensuring businesses have the resources needed for growth. 

Discover how Bibby Financial Services can support your recruitment business's growth this year. Learn more and get in touch with our experts.