Strong Recruitment in the US Continues: Is Now the Time to Cross the Pond?
WorldFirst and Recruitment Accountants examine the US recruitment market and how UK businesses can optimally position themselves for success.
Home / Insights / Strong Recruitment in the US Continues: Is Now the Time to Cross the Pond?
The global recruitment landscape is shifting, and the US market is an appealing destination for UK recruitment firms. This strength is especially evident when juxtaposed with the slower pace of recruitment in the UK. However, entering the US market is not without its challenges. With insights from WorldFirst and expertise from Recruitment Accountants, let’s examine the American staffing landscape and how UK businesses can optimally position themselves for success.
The US Recruitment Market: Opportunities and Growth
The staffing industry is witnessing robust growth. As WorldFirst’s findings from Staffing Industry Analysts highlight:
2021 saw the US recruitment industry garner $186.3bn USD, accounting for 31% of the global market.
The momentum continued into 2022, with revenues reaching $218mn USD – surpassing projections by $6bn.
2023 is poised for even greater growth, with projected revenues elevating the US’s global market share to 33%.
Such impressive statistics are a testament to the resilience and attractiveness of the US market. Not only is there an enthusiastic pool of individuals looking for enriching career opportunities, but businesses are actively searching for talent.
Moreover, the US market is less saturated compared to the UK, with recruiters perceived as indispensable allies in talent acquisition and retention. Couple this with the US’s ‘at-will’ employment system, which offers more agility in employment relationships, and UK recruiters have an exciting market where placements can translate to revenues faster.
States like California, Texas, and New York are major hubs, with sectors such as IT, finance, life sciences, and marketing slated to see growth rates between 5% and 8% in 2023. With these promising prospects, it’s evident why UK recruitment firms are casting an eager eye across the Atlantic.
Venturing into the US: Key Considerations
While the allure of the US is undeniable, navigating this expansive and diverse market requires foresight, preparation, and adaptability. Combining the insights of WorldFirst and Recruitment Accountants, here’s what you need to consider for expansion into the US:
Understanding the Legal & Tax Landscape: With each state functioning almost like a unique country, understanding state-specific laws & tax legislation is crucial. For instance, sales tax rates, income tax levels, and business operation regulations can vary widely from one state to another. Some states, like Delaware, are known for their business-friendly legal structures, while others, such as California, offer a nexus of opportunities but come with intricate regulatory requirements. Also, federally, the U.S. has its own set of tax obligations and legal considerations that run parallel to state-level rules. To navigate this multifaceted landscape, partnering with a cross-state attorney is imperative. Additionally, collaborating with an accountancy firm that has multiple offices or affiliates across various states will ensure that your business remains compliant while maximising its financial efficiency.
Making and Receiving Payments: While engaging clients remains the same, the intricacies of payments in a foreign currency present new challenge. Opt for local currency accounts to avoid exchange rate hassles, ensure seamless transactions, and foster trust with American clients. With a local currency account, you can:
Get local sort codes, account numbers and IBANs without the need for a US business address.
Easily and quickly receive USD payments from invoices once candidates are placed.
Register without a US business entity.
Store the funds in USD until you’re ready to pay local partners or tax, or convert the money and bring it home.
A local currency account not only makes it easy for your clients to pay you but ensures you’re getting the most from your revenue and maximising profits.
Proximity to Talent within Your Business Sector: Talent is the backbone of any recruitment firm. The US boasts talent hotspots like Silicon Valley for tech enthusiasts, while emerging hubs in Tampa, North Carolina, and Tennessee offer a pool of skilled workers without the exorbitant costs. Cities like California, Boston, and New York remain rich talent reservoirs, thanks to their renowned educational institutions. Identifying the right talent locale, thus, becomes the first step towards a successful US expansion.
Business Strategy: Entering the US market requires a detailed, well-researched strategy. This means not only selecting an initial state based on its economic and business climate but also understanding the local nuances, preferences, and business patterns. Familiarise yourself with the local talent pool, key industries, and regional competitors. Additionally, keeping your strategy adaptive is crucial, given that the US market, with its diverse regions, may present unexpected challenges or opportunities.
Time Differences: The US spans six time zones – Pacific Time (PT), Mountain Time (MT), Central Time (CT), Eastern Time (EST) Hawaii (HST) and Alaska (AKST). From coordinating with clients to interviewing candidates, understanding and managing these differences is essential.
Establishing Presence: Acquiring a US-based phone number adds credibility when connecting with local clients or candidates. Having a dedicated US website or a landing page that addresses the American audience can further assure them of your commitment. A local mailbox or postal address, possibly through virtual office services, can facilitate smoother correspondence and provide an additional layer of establishment.
Pricing: It’s essential to understand that a UK pricing strategy may not directly translate to success in the US. The US market often allows for higher profit margins due to the scale of its economy. However, this comes hand-in-hand with increased costs in areas like compliance, rent, and salaries. Conducting thorough market research will enable you to determine a competitive pricing strategy that aligns with both local expectations and your operational costs. Keeping an eye on regional competitors and understanding the value you bring can help in finding the right pricing balance.
Cultural Acumen: The US business culture has certain distinct attributes. For instance, “at-will” employment means either the employer or the employee can terminate employment at any time without cause. This contrasts with contractual norms in many other countries. Additionally, US networking events might be more casual or have different etiquette compared to what international recruiters are accustomed to. Offering training sessions or workshops for your consultants on American business practices, communication styles, and networking etiquette can be instrumental in ensuring smooth interactions and building trust.
The promise of the American recruitment market is vast, with opportunities galore. Yet, success hinges on a nuanced understanding of the US landscape. Armed with the insights from WorldFirst and the expertise of Recruitment Accountants, UK recruitment firms can confidently embark on this transatlantic journey, turning the American dream into a profitable reality.
Your fast and secure cross-border payment solution
Whether you’re a one-person band or big multinational, a World Account opens your business to the world. We give you local bank account details so you can pay and get paid like a local, at home and across borders. With a World Account you can open a local USD currency account in minutes so your recruitment firm can start placing candidates by the end of the week and get paid for it the following week.
If you want to find out more, get in touch with your Recruitment Accountants contact who will make an introduction to a WorldFirst relationship manager.
Recruitment Accountants is a member of the global accountancy network UHY, with offices in 340 business centres in over 100 countries across all continents. This means we can offer our clients full service support in every major financial centre in the world, including support with group structure and tax advice for expanding overseas.
World First was established in 2004 as one of the UK’s first fully regulated, non-bank providers of global business payments. Since then World First has helped over 250,000 businesses to send or collect over £126Bn around the world. We believe in providing a financial platform which gives businesses complete visibility & control of key day to day financial management, such as collecting payments locally, managing multi-currency accounts & making global payments. Our platform also seamlessly integrates with Xero to automate transaction reconciliation.
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