Unlocking Growth: enabling Recruitment’s vital contribution

This is a guest blog by Roger Brown, Head of UK Partnerships from REC business partner Bibby Financial Services 

The UK business landscape has faced significant turbulence in recent years, and as we move forward, the focus must turn to economic growth. The economy grew by 0.6% in Q1, the fastest quarterly growth in over two years. Based on this performance, forecasters are raising their projections for the rest of 2024, with growth of 0.8%–1% now expected. Additionally, inflation has recently met the Bank of England’s target of 2%, and while interest rates remain unchanged, the latest market view suggests that first cuts are likely in August. We are making progress on the path to growth! 

2024 is shaping up to be a year of two halves. The first half has been marked by cautious optimism but has been held back by the uncertain political landscape, which has put the brakes on businesses making significant decisions. Our Q1 SME Confidence Tracker survey* revealed 43% of SMEs are delaying major investment decisions until after the general election. However, as we enter the second half of the year, the post-election period will bring change. We anticipate greater certainty, which is good for businesses, enabling them to plan for growth with a resulting positive impact on the economy as a whole. 

Data shows that both consumer confidence and business confidence have improved. This is across a number of sectors, but markedly within the services sector, of which recruitment is a part. In fact, the latest PMI data indicates it is currently the strongest performing sector! 

The recruitment sector plays a vital role in enabling the growth of the UK economy. By connecting businesses with the talent needed to thrive, growth in this sector supports a robust labour market and drives overall economic development. Helping businesses overcome the challenge of sourcing the right talent is a growth opportunity for recruitment firms, with just over a fifth (21%) of SMEs in our survey identifying recruiting new staff as a key challenge. Those who can respond to these opportunities will be well-positioned to grow and succeed. 

For recruitment businesses to unlock their growth potential, access to working capital is crucial. External funding may be necessary for them to succeed. The proportion of SMEs willing to borrow to fund business growth is now ahead of pre-COVID levels, according to the SME Finance Monitor (Q4 2023). This is a finding consistent with our own survey and particularly the case in the services sector, with 20% of SMEs currently using external finance and 25% intending to use it. 

Bibby Financial Services (BFS) understands these challenges and offers tailored financial solutions. With a strong presence across the country, our local experts, well-versed in regional markets, provide essential support to the sector, ensuring businesses have the resources needed for growth. Currently, BFS provides over £50 million in funding to our recruitment clients, with a combined annual turnover of c. £900 million. The recruitment sector represents around one in ten of our total client base, demonstrating our commitment and expertise in serving the industry. 

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