Human Capital: Recruitment activity above expectations  

Investors often consider recruitment as highly cyclical, and so they tend to stay away from the sector during times of macroeconomic uncertainty. However, recent activity levels have bucked this trend. There are several assets coming to market, and we are still seeing plenty of investor interest in well-managed recruitment agencies that have a reputation for quality candidates (temp and perm) in niche sectors. 

A good agency is trusted by clients and candidates to make the right match. Their knowledge of the client and sector expertise, often built over many years, creates a degree of loyalty in candidates and stickiness in their customer base. Opportunities to move into adjacent sectors and geographically offers opportunities to create value for investors.  

Hot sectors for recruitment currently include: 

Education 

Sustained shortages of teachers, the need for local supply at short notice and lack of in-house resource all drive schools and colleges towards using recruitment firms. Whilst budget pressures may impact the sector and margins may not be as high as elsewhere, there is a clear roadmap to growth via organic and acquisitive strategies. 

Technology 

Despite the tech sector not being as buoyant as in recent years, the UK still suffers from structural skills shortages and businesses still have significant tech requirements, both BAU and to carry out transformation programmes. The opportunity for recruitment firms in tech to deeply specialise in ‘niches within niches’, which require a high level of subject matter expertise and a strong network, will always create opportunities for differentiation. 

Renewables 

The increasing focus on renewable energy across the world will lead to opportunities for specialist recruitment firms both in the UK and abroad. Given the emergence of new technologies in the sector and businesses’ rush to reduce carbon emissions and change business models, there will be plenty of opportunities for recruitment firms to assist businesses in their resourcing requirements. 

Healthcare 

Macro drivers such as the ageing population, increasing focus on preventative healthcare, and continued public sector budget pressures all point to sustained demand for agencies in the healthcare sector, both private and public. Whilst the NHS does have an in-house recruitment function via its staff bank, this is typically viewed by clients and candidates as not fit for purpose. As such demand for recruiters to fill mission-critical or short notice positions is likely to remain high. 

Recent deals we’ve supported 

Speak to a member of the team about opportunities in the Human Capital sector.  

Matt McNally

[email protected]
+44 7894 736 523

Email Matt