The recruitment industry is often subject to expansions and contractions in different regions due to a variety of different economic and social factors. For UK-based firms seeking growth and new opportunities in 2024, expanding operations to the United States could be a great strategic move.
The American job market is vast, diverse and has been steadily expanding over the past few years. This presents ambitious recruitment firms with a great opportunity, and there is a growing number of UK recruitment agencies wanting to get in on the action.In this article, we’ll offer up some food-for-thought reasons UK recruitment agencies should consider making the leap across the pond.
1. US recruitment industry growth
The US recruitment industry is projected to grow by 3% in 2024, as highlighted by the latest SIA US Staffing Industry Forecast. This presents an enticing opportunity for UK recruiters eyeing expansion. With an expected market size of $207.2 billion, showcasing a 2.7% increase, the thriving landscape promises substantial market share for astute UK firms. This expansion not only taps into a buoyant market but aligns with the broader economic recovery, offering UK recruiters a lucrative entry point into an expanding US recruitment industry.
2. An expansive talent pool - and higher margins
The United States boasts a vast and diverse talent pool, offering recruitment firms access to a broad spectrum of skills and expertise. With a population of over 331 million people, of which around 150 million are in the workforce, the US job market is incredibly dynamic, encompassing various industries and sectors. Expanding to the US allows UK recruitment firms to tap into a rich source of talent, fostering diversity and specialisation within their candidate portfolios.
Higher salaries in the US, particularly for highly skilled workers, translate into more substantial placement fees and commissions for recruiters, amplifying their income potential. Recruiter margins in the US are also typically higher for contract placements compared to permanent staffing.
3. A wealth of sector opportunities
The U.S. economy is one of the largest and most robust in the world. As the country continues to recover from global economic challenges, various industries are experiencing a resurgence in demand for skilled professionals, from technology and healthcare to finance and manufacturing.
The SIA forecast highlights promising growth across various sectors: commercial staffing is poised for a solid 3% uptick, IT staffing anticipates a remarkable 5% expansion, and healthcare staffing, despite a projected 3% decline after record growth in the COVID era, remains a substantial market.
Indeed, with the IT sector valued at $43.2 billion, finance and accounting at $9.1 billion, life sciences at $3.5 billion, marketing at $2.1 billion, and an additional $10.4 billion in other segments, the opportunities are there for UK recruitment firms looking to strategically boost their revenue streams.
4. It’s boom time in the temp & contingent worker market
The booming US temporary staffing market is projected to reach $185.6 billion in 2024. According to the SIA forecast, the placement and search segment alone contributes a significant $21.7 billion to the overall US staffing revenue.
Contingent workers constitute about 50% of the average US company's workforce, and 46% of non-employees express a preference for contingent work. This growing trend not only signifies a shift in the labour market but also underscores the demand for flexible employment arrangements.
With such growth anticipated, savvy UK firms can leverage their expertise and capitalise on the rising demand for flexible workforce solutions in the US, tapping into a multi-billion-dollar industry and fostering transatlantic business success.
5. A technological innovation hub
The US is a global leader in technological innovation, with renowned hubs such as Silicon Valley driving advancements across industries. Expanding to the United States enables UK recruitment firms to immerse themselves in a cutting-edge environment, attracting clients and candidates at the forefront of technological innovation. This move not only positions recruitment firms as industry leaders but also exposes them to emerging trends that can enhance their service offerings.
6. Don’t put all your eggs in one basket
Faced with economic and political uncertainty, wise UK recruitment firms are strategically venturing into the US recruitment market to hedge instability risks. Operating in both the UK and the US provides a crucial backup revenue stream, offering resilience during hiring cuts or economic downturns in either country. The diversified US market, consisting of 50 states with distinct economies and sector demands, presents a unique advantage.
A US recruitment division not only cushions against slower economic periods but also taps into the stability of the US dollar and the vast domestic market. The ability to navigate various states allows recruiters to adapt to localised economic conditions. In times of turbulence in one state, the flexibility to recruit talent in another with booming growth or unique niche sectors ensures a more resilient recruitment business.
7. The unique appeal of US-UK cooperation
Expanding operations to the United States opens doors to a broader global network. The interconnected nature of the modern business world means that a presence in the US can facilitate connections with companies, candidates, and partners from around the globe. This expanded network not only enriches a recruitment firm's portfolio but also positions them as a global player, attracting clients seeking international talent solutions.
8. A new integrated Employer of Record, Funding and Contractor Management solution
Recently launched by 3R in partnership with Lead & Gain Workforce Solutions, a US based Employer of Record (EoR), a purpose built platform to drive Recruiters’ US Contractor operations forward. By integrating Lead & Gain's US worker onboarding, compliance management and payment services with 3R’s US Funding and powerful back-office platform, expansion risks are mitigated, the complexities of placing candidates in multiple states is taken care of, contractors get paid on time and the inclusive outsourced support means Recruiters can test the US waters without increasing headcount immediately.
In summary
It’s clear that UK recruiters have a unique and timely opportunity to expand into the US market in 2024, leveraging the momentum of a rapidly growing staffing industry. The United States offers a wide range of sectors including IT, engineering and life sciences, presenting a wealth of opportunities for UK recruiters to diversify their portfolio and tap into high-demand industries.
Seizing this moment can lead to long-term success and strategic growth for UK recruiters.
About Lead & Gain
Lead & Gain are a US Employer of Record, providing specialist services to compliantly onboard and pay all types of contractors across North America, including C2C/LLC, Independent Contractors, W-2, and T-4.
They help navigate the complexities of employment contracts, contractor compliance, payroll, timesheet and expense management, federal, state and local registrations and tax reporting, provision of worker benefits, worker insurances, and more.