Recruitment Agencies: Costs, Margins and Benchmarks

Permanent and temporary recruitment are different businesses, and the ONS figures show it. In 2024 there were 18,047 placement agencies and 11,080 temporary staffing agencies registered for VAT or PAYE. The temporary agencies had far higher turnover, £53.2bn against £23.6bn, because their turnover includes the pay of the temporary workers they supply.

The figures

Source: ONS Annual Business Survey, 2024 results (published 26 May 2026). It covers businesses registered for VAT or PAYE, so the smallest sole traders are not included. Averages are pulled up by the largest firms. For sole traders and partnerships, the owners’ own pay is not in staff costs: it comes out of what is left.

How temporary workers are paid affects these figures. Temps on the agency's own payroll count as staff costs. Temps supplied through umbrella companies or their own limited companies count as bought-in services. Compare your own figures on the same basis.

How it has changed since 2019

Permanent placement: turnover rose 52% between 2019 and 2024, against a 24% rise in consumer prices, so it grew in real terms. The number of businesses rose 8%. Staff costs went from 27.4% to 28.0% of turnover, and what was left after staff and bought-in costs went from 19.9% to 23.1%.

Temporary staffing: turnover rose 7% between 2019 and 2024, against a 24% rise in consumer prices, so it fell behind inflation. The number of businesses rose 2%. Staff costs went from 41.6% to 40.7% of turnover, and what was left after staff and bought-in costs went from 21.0% to 19.5%.

What this means for a recruitment business

• For permanent recruitment, consultant time is the product. Track how much of each consultant's time goes on billable activity, and the conversion rate from candidates submitted to placements.
• For temporary staffing, margin per hour is everything. Know the gross margin on every hour billed, after the worker's pay, employer costs and holiday pay.
• Cash flow. Temporary agencies pay workers weekly but are often paid by clients monthly or later. Debtor days decide how much funding you need.
• Win rate. A higher share of jobs filled from the same number of vacancies is the quickest gain for a permanent desk.

Compare your agency

Choose the closest match, then enter your figures.

Guides that fit this trade

• Utilisation: consultant time spent on fee-earning work.
• Cash conversion cycle: the gap between paying temps and being paid.
• Debtor days: how fast clients pay.