UK Recruiters: Considering Expanding to the US?

The UK recruitment industry has long been recognised for its innovation and adaptability. Recruitment agencies have consistently demonstrated their ability to navigate shifting market landscapes and stay at the forefront of industry trends. It’s no surprise that many of these agencies are now setting their sights on expanding to the United States. In this blog, we explore the motivations and challenges of UK recruitment agencies expanding into the US job market.

Why are UK Recruiters Considering US Expansion?

The US market brings fresh opportunities, not only for job seekers but also for recruitment agencies. Several compelling factors make the US an attractive destination for UK recruiters looking to expand their operations. The effects of Brexit and Covid-19 have had a huge influence in the rise in UK recruitment agencies currently considering this expansion, but also, this leap is being driven by numerous other factors, such as:

1. Diverse Job Market: The US boasts one of the world’s most diverse job markets, spanning a multitude of industries and skill sets. This diversity provides ample room for specialised recruitment agencies to thrive.

2. Economic Growth: The US economy has shown resilience and consistent growth, making it a stable platform for business expansion. A robust and growing economy naturally brings increased hiring needs.

3. Global Reach: Establishing a presence in the US can serve as a springboard for global expansion. It’s a strategic move for agencies looking to tap into international talent markets.

4. Margins: The margins paid by US companies tend to be more lucrative (25-35% is fairly typical).

Challenges and Considerations for UK Recruiters

While the prospects within the US recruitment market are inviting, there are several challenges and considerations that agencies should be aware of and prepared for:

1. Legal and Regulatory Differences: The US has distinct employment laws and regulations that differ from the UK. Agencies must be prepared to navigate these differences to ensure compliance.

2. Competition: The US recruitment industry is a highly competitive space, with both domestic and international competitors, therefore, standing out within this crowded market can be challenging. Having a “niche” in a a particular state or sector is therefore a great advantage.

3. Geographical Size & Location: Agencies must carefully choose their locations of operation to best optimise their reach and ensure that they adapt to the law and regulations for each state.

4. Cultural Adaptation: Having a key understanding on the culture and expectations of US job seekers and employers is critical for a successful expansion.

An Abundance of New Opportunities

Expanding to the US is a significant step for recruitment agencies, but it also can be a rewarding one. The US job market’s diversity, economic growth, and technological innovation offer an abundance of opportunities. Success requires careful planning, market research, legal compliance, and a commitment to understanding the US recruitment landscape. With the right approach and structure in place, UK recruitment agencies can make a substantial impact in the US and establish a strong international presence.

It is vital to ensure that recruiters have a strong grasp of US employment and classification laws and look to seek qualified legal counsel to navigate the regulatory challenges.

We can help

WTT Legal has extensive experience in both the UK and US recruitment market. As an APSCO Trusted Partner, we are well placed to advise on transacting business in the US and using your UK entity to engage with US clients.

Are you a recruitment agency considering your US expansion plans? Get in touch to arrange a free legal consultation with our specialist advisors. Email us at info@wttlegal.co.uk or call us on +44 (0)20 3468 0000 for more information.