UK Recruitment Agencies Display Optimism for Growth Amid Challenges
Recruitment agencies in the UK are embracing a renewed sense of optimism, with over half (53 percent) anticipating revenue growth from 2025 to 2026. This marks a notable increase of 10 percentage points from last year’s projections, as revealed by JobAdder’s Benchmark Report 2025/26.
Remarkably, nearly 90 percent of survey participants believe the industry is poised for expansion, regardless of ongoing economic volatility and intensifying competition.
The optimistic outlook is bolstered by a robust demand for talent across various sectors, with 74 percent of respondents identifying this as a driving force, and a significant rise in demand for specialized recruitment services, which saw an increase of 20 percent from the previous year to reach 67 percent.
Additionally, agencies are recognizing opportunities within emerging markets, with 35 percent reporting growth in this area, a remarkable 52 percent increase year-on-year. Despite mixed revenue performance globally last year, confidence appears to be on the upswing, as 43 percent of UK agencies reported growth compared to 27 percent in Australia and New Zealand.
Looking forward, a mere 5 percent of participants foresee a downturn.
“We’re witnessing substantial growth in specialist sectors such as technology, healthcare, and engineering,” stated Dan Oates, Recruiter, Founder, and Career Coach at BBFGroup.
“Clients are increasingly seeking bespoke recruitment solutions—ranging from executive searches to niche talent mapping. Prioritizing these specialized services enables us to deliver genuine value and distinguish ourselves in the competitive UK landscape.”
While demand-side factors are propelling growth, technology is emerging as a pivotal enabler. Over the past year, confidence in the adoption of artificial intelligence has surged from 73 percent to 81 percent, with 86 percent of agencies intending to enhance their AI utilization in 2025. The benefits of such adoption are already evident:
- 80 percent report significant time savings
- 61 percent experience enhanced team performance
- One-third have secured new business via AI integration
Agencies are revitalizing their business development strategies, with 59 percent planning to amplify investments in this area over the next year. Leading the charge are social media outreach (49 percent) and AI adoption (46 percent), complemented by expansion into new markets (34 percent).
Encouragingly, 57 percent of these agencies manage to engage prospective clients within five calls or fewer, though full sales cycles can extend anywhere from two weeks to six months, emphasizing the necessity of fostering enduring client relationships.
Amid the prevailing optimism, significant challenges remain. A substantial 52 percent report economic uncertainty as their primary concern, albeit down from 63 percent the previous year.
Additionally, 78 percent note rising client expectations, while 63 percent observe heightened demands from candidates. Competition is also escalating, with 64 percent of agencies reporting increased rivalry among peers and 66 percent facing intensified competition for client contracts.
Recruiters are exhibiting remarkable resilience, asserted Martin Herbst, CEO at JobAdder. “While economic and competitive pressures persist, the demand for talent and specialized services remains robust.
The paradigm is shifting as agencies adapt to meet this demand, combining the efficiencies of AI, CRM, and ATS technologies with the enduring client relationships that are foundational to recruitment.
This harmonious blend of innovation and human connection will drive the industry’s forthcoming growth trajectory.
Now in its second iteration, JobAdder’s Recruitment Agency Benchmarking Report conducts surveys across agencies to reveal performance trends, market insights, and emerging technologies, assisting recruiters in benchmarking their progress and uncovering new avenues for growth.
Against the backdrop of an unpredictable economy, the UK’s unemployment rate has climbed to 4.7 percent, while job vacancies have declined to approximately 728,000 as of August 2025, as per ONS data*.
As businesses navigate stringent conditions and evolving workforce demands, UK recruitment agencies are rapidly adapting; 36 percent now consider temporary recruitment a core service, illustrating a marked shift towards more flexible hiring paradigms.
Source link: Theglobalrecruiter.com.
