Amount of recruitment agencies going into administration
declining but many still cautious
There has been a 28% decrease in the amount of
recruitment agencies being put into administration compared to
2009. Yet many recruitment agencies are being left to the
cautious clients who are also affected by the economic downturn.
With many clients going bust this has left a lot of bad debt.
This has meant that companies have to spread
their debtor books in case there are any bad debts which are more
prominent in these times. With the economy slowly recovering, and
companies starting to gain more confidence, recruitment
agencies are picking themselves up. With many having
reduced their head count to survive the downturn there is now need
in every sector to begin expanding again which has revitalised the
recruitment
sector.
Yet not all are still safe, a number of
recruitment agencies with high turnover were also put into
administration. According to the latest Companies House data,
companies including Apex Nursing and Care Services at £1m, Bold
Recruitment at £1.5m, Orange Juice Recruitment at £1.9m and Quest
Project Personnel at £11m.
David Grier, partner at corporate
restructuring and insolvency firm MCR said “As always, preparation
is the key to survival in a storm. A high fixed-cost base is the
worst enemy when income is falling, so careful and accurate
monitoring of profitability and cash collections by branch,
customer and by consultant, is vital.”
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