Why are more UK recruiters exploring the US market?

05th April 2023
Written by Qdos Contractor

Since 2020, many UK recruiters have started to explore the US recruitment market, alongside the domestic arm of their business.

There are a number of factors that combine to make the US market an appealing one for UK recruiters, aside from revenue growth opportunities.

In this article, PGC – a specialist in helping UK recruiters expand into the US – outlines why the US market is becoming an increasingly attractive option. 


The world’s largest recruitment market

The global recruitment industry was worth $620bn in 2021, according to Staffing Industry Analysts. Of this, the US accounted for around $186.3bn – 31% of the global market. This is greater than the combined figure for the UK, Japan, Canada, Sweden, Belgium, India and France. 

With a large, English-speaking population and workable time differences, the US has a significant talent pool. Access to this workforce offers a route for UK recruitment agencies looking to expand their offering. 


Increased headroom for markup

With high average salaries on offer in the US, UK recruitment agencies can command larger average fees per placement, complementing their UK revenue.

According to the Dice Salary Report, the average tech salary in the US is $104,566. Often, these higher salaries can translate into higher commission for agencies, across both temporary and permanent placements.


‘At-will’ recruitment market

One of the key differences between the UK and US recruitment markets is the ‘at-will’ nature of employment.

Employers and employees can terminate an employment relationship at any time, whereas in the UK, notice periods are a consideration for recruiters to contend with.

Longer notice periods in the UK can present challenges for recruiters looking to fill vacancies quickly, especially for senior roles. 

Shorter notice periods in the US market improve candidate availability and placement, leading to quicker turnaround and fee payment – boosting revenue for UK-based recruitment firms.


Growing economy, growing demand

With 50 states to choose from – many with different GDPs, sector demands, employment laws, talent pools and regional industries – the US is a deep and diverse market.

Each state offers its own benefits, too, including attractive, low tax regimes. For instance, some states don’t charge personal income tax – a great draw for highly-skilled workers. 

Added to this, the US economy experienced its strongest two years of growth on record to 2022 as the country bounced back from Covid-19, adding 4.5 million jobs last year – a 114% increase on the pre-pandemic economy. 

As the economy grows, so will the jobs market, and even fears of economic slowdown can drive demand for temporary and contract workers


Greater geographic opportunity reduces instability risk

Entering a new market presents risks – especially at a time of economic uncertainty – but also an opportunity to grow a new, complementary revenue stream.

With a large domestic market and stable currency, the US can provide additional stability to UK recruiters, reducing their risk exposure in the event of a slowdown in the UK market.


Valuation growth

The knock-on effect of increased revenue growth is an increased valuation – and this is one of the key reasons for UK recruiters to begin offering their services in the US market.

As well as decreasing reliance on a single market or income stream from UK-only clients, payment terms in the US are much shorter, with employers legally required to pay contractors every two weeks. This increases cashflow frequency for recruiters, bulking up revenue flows and boosting valuation.


A final thought

For UK recruiters, there are several reasons to explore the US market. The shared language and the workable time difference offer a natural route to expansion, as well as revenue growth opportunities. 

Working with a reputable and experienced provider, UK recruitment agencies can remain in the UK and expand into the US market remotely – from their home office in the UK – without committing to the costs and risks associated with physical expansion.

If you’re considering exploring US recruitment, PGC’s employer-of-record solution can reduce the complexities and risks associated with entering this market. 

Why not schedule a free US market opportunity session?
Qdos Contractor
Written by
Qdos Contractor
Award-winning providers of insurance for the self-employed, Qdos are the leading authority on IR35, offering industry-leading employment status services to ensure the flexible working industry thrive. Qdos are the Best Contractor Insurance Provider 2022 and won the Queen’s Award for Enterprise in Innovation 2022 and 2017. 

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