Crystal Umbrella

Tech recruiter Morson has credited contractor recruitment with boosting its profits and helping them to outperform their rivals. In fact, Morson have stated that the skilled contractors that they provide for infrastructure projects have helped them to cope “far better” than their industry rivals.

Morson has seen their pre-tax profits rise from £4.1m to £4.9 million for the six month period to June with an overall turnover of £219.9m, up from £212. They currently have 9,000 techies on their books.

Morson has commented that this “solid trading” results from new orders received within the rail, nuclear and defence sectors. They have also acquired new clients, namely EADS, Thales and Ericsson while BAE Systems and Airbus have extended existing contracts. The company believes that this is a sign that they should expect “further progress” in the coming year. This is even more likely given the potential for new contracts through the Olympics and the access to European opportunities through EADS.

Ged Mason, chief executive of Morson, said: “We do believe that the provision of outsourced technical services and technical resource is a resilient market and remains strong with good long-term prospects. In particular, the market benefits from skill shortages and the ongoing investment in long-term infrastructure that is required in the United Kingdom.”

With regards to their income, fees received from permanent recruitment accounted for just £400,000, down 50 per cent. In fact permanent recruitment represented a mere 2.2 per cent of Morson’s net fee income. By contrast, contract recruitment accounted for £14.4m of the firm’s total £181.1m in received fees.

Despite existing debts, which have lessened, Mason stated that the firm is “very much seeking to position the business to gain market share.”

According to new research released by Begbies Traynor, over the past year the number of recruiters experiencing financial difficulty more than doubled.

Begbies Traynor, a firm which specialises in business rescue, recovery and restructuring carried out research which found that the number of firms who were experiencing critical financial difficulties in the second quarter of 2008 was 24 and over the past 12 months this number has increased to 55 – an increase of 129 per cent. Their research also concluded that the number of firms experiencing significant financial problems increased by 90 per cent between the second quarter of last year and the same period this year. There has also been an increase of 67 per cent in the number of recruiters experiencing critical financial problems between the first and second quarters of 2009.

These critical problems are defined by Begbies Taylor as companies who have County Court Judgements equating to £5,000 or more and or claims relating to wind-up petitions. Companies with significant problems are those who have insolvent or out of date accounts and/or court actions.

Partner at Begbies Traynor, Nick Hood commented: “Recruitment companies serving all levels of the job market are now starting to feel the severity of the economic downturn and as we approach the seasonally quieter summer period, this may be the tolling bell for severely struggling companies.”

He continued, “Over the medium term, the situation will only worsen as unemployment is a lagging indicator and its full effects are not going to be seen until even later in the recession.”