During the second half of 2010 there was a downward trend of recruitment agencies being placed into the hands of administrators. In the fourth quarter 13 agencies went into administration compared which is a 28% drop from 2009.
Despite this drop recruiters are being encouraged to remain vigilant in the face of client problems. David Grier, partner at corporate restructuring and insolvency firm MCR, has stated “In our view, recruitment businesses would be well advised to consider how they would respond to a ‘worst case scenario’.” He has also advised recruiters to consider factors such as dropping the number of consultants, closure of redundant branches and continuity of vital funding.
Simon Plant, group partner at corporate recovery and turnaround specialist SFP Group, has said: “If your business is facing any financial issues, our advice would be to consult with accountants or business advisors almost immediately. Dealing with problems the moment they arise provides the best opportunity to avoid potential business failures.”
Topics like this, coupled with the impending Agency Worker Regulations all point to the same stable solution: Preparation. With the landscape of the industry ever changing only the most organised will make any kind of transition and problem solving a simple matter rather than a catastrophic failure.
