Over Half of Recruitment Agencies Expect Revenue Growth in 2026, Despite Market Pressures – JobAdder Reports
UK recruitment agencies are looking ahead with renewed optimism, with more than half (53%) expecting revenue growth from 2025 to 2026 – a 10% increase on last year’s outlook, according to JobAdder’s Benchmark Report 2025/26. Nearly nine in ten respondents believe the industry will grow, despite ongoing economic uncertainty and heightened competition.
The positive outlook is underpinned by strong demand for talent across sectors (74%) and a sharp rise in demand for specialist recruitment services (67%, up 20% from last year). Agencies also see opportunities in emerging markets (35%, up 52% year-on-year), highlighting an industry that is diversifying and future-focused. Globally, revenue reports were mixed last year, but confidence is trending upward: 43% of UK agencies reported growth, compared with 27% in Australia and New Zealand. Looking ahead, only 5% of respondents predict a decline.
“We’re seeing strong growth in specialist sectors like technology, healthcare, and engineering,” said Dan Oates, Recruiter, Founder, and Career Coach at BBFGroup. “Clients increasingly demand tailored recruitment solutions – from executive search to niche talent mapping and focusing on these specialist services allows us to add real value and stand out in a competitive UK market.”
While growth is being driven by demand-side factors, technology is emerging as a critical enabler. Confidence in adopting AI has jumped from 73% to 81% over the past year, with 86% of agencies planning to increase usage in 2025. Benefits are already clear:
- 80% are saving time
- 61% report improved team performance
- One in three have won new business through AI
Agencies are refreshing their business development approach, with 59% planning to increase BD investment over the next year. Social media reach (49%) and AI adoption (46%) are leading strategies, alongside expansion into new markets (34%). Encouragingly, 57% of agencies secure prospective clients in five calls or fewer, though full sales cycles range from two weeks to six months – underscoring the importance of sustained client relationships.
Despite optimism, challenges persist: 52% cite economic uncertainty as their top concern (down from 63% last year), 78% report rising client expectations, and 63% note increased candidate demands. Competition continues to intensify, with 64% of agencies reporting greater agency-vs-agency rivalry and 66% facing heightened competition for client roles.
“Recruiters are proving remarkably resilient,” said Martin Herbst, CEO at JobAdder. “Yes, economic and competitive pressures remain, but demand for talent and specialist services is holding strong. What’s changing is how agencies are meeting that demand by combining the efficiency of AI, CRM, and ATS technology with the trusted client relationships that remain at the heart of recruitment. It’s this blend of innovation and human connection that will drive the industry’s next wave of growth.”
Now in its second year, JobAdder’s Recruitment Agency Benchmarking Report surveys agencies to reveal performance trends, market insights, and emerging technologies – helping recruiters benchmark themselves and uncover new growth opportunities.
In an unpredictable economy, unemployment in the UK has risen to 4.7%, while job vacancies have dipped to around 728,000 as of August 2025, according to ONS data*. With businesses navigating tighter conditions and evolving workforce needs, UK recruitment agencies are adapting rapidly – with 36% now offering temporary recruitment as a core service, reflecting a shift toward more flexible hiring models.
