71 industrial robots installed per 10,000 workers in UK

12 June 2018 Consultancy.uk

The UK is currently lagging behind 21 other nations in the adoption of robot density proportional to its industrial workforce. While Britain is above the global average of 74 robots per 10,000 employees, the UK was still below the European average.

Robotisation in the industry is forecast to continue in the coming years as well. According to the IFR, 294,000 new robots were installed worldwide throughout 2016, of which around 100,000 in the automotive industry and 90,000 in the electronics sector. The number of robots involved in the global workforce is on course to have grown by 349% in ten years by 2020. According to Consultancy.org analysis of data from the International Federation of Robotics (IFR) and Bloomberg, 521,000 robots will have been installed in the industrial and manufacturing landscape in 2 years’ time.

The average number of robots has increased by about 20% over recent years, a figure that applies both globally and to Europe. Worldwide, according to the IFR, an average of 74 robots per 10,000 employees are in use in 2016, in Europe 99. The charge is currently being led by the South Korean industry, where 631 robots can be found per 10,000 workers. As of 2009, the Asian nation overtook nearby Japan as a leader. Despite the nation’s reputation for technological prowess, since that year, robot density in Japan has been steadily decreasing.Number of industrial robots installed globally by yearThe UK is ahead of the curve on a global basis, with 71 robots per 10,000 workers – however the nation is also well below the European average. This is despite reports suggesting that logistics robots are set to make 40% of low skilled workers in the sector obsolete, and the prediction that over 60% of all work activities could be automated by 2055 subsequently remains a distant prospect.

In contrast, the robot density in the Netherlands has increased considerably in recent years. Only China saw a stronger increase, as while there were already 93 robots per 10,000 Dutch employees in 2013, by 2015 there were already 153, according to calculations by the IFR. With more than 11,000 robots in use, the Netherlands has made a big catch-up with other countries. In these years, robot density in the Netherlands grew by 65% much faster than the rest of the world.

Number of industrial robots by countryThe growth in robot adoption is a key method for companies looking to reduce expenditure and increase profits, and as such around a third of global companies with revenues over $100 million are planning to upgrade their HR infrastructure to best exploit the innovative technology. However, four in every ten in the US, and a quarter of those Europe said that they currently lack a “good understanding” of how automated processes could impact their skills requirements.

Reskilling workers with a wider or broader skillset, compensating for changes in in-demand skills, is cited as one way to reduce the impact of changes in the work environment. However, given the potential scale of changes, as well as the speed of implementation – key questions remain around whether retooling people at scale is achievable, or even desirable. If the rate of growth for robotisation is set to grow at the expected rate, these are key issues which businesses of the world will need to get the most out of robotics in the workplace.

Related: UK manufacturing employment nosedives, with automation looming.

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High employment drives deals to access fresh talent

09 April 2019 Consultancy.uk

The UK continues to have a historically low unemployment rate, resulting in a tightening employment market and demand for recruitment services. The industry topped £12.3 billion last year, while valuations continued to rachet up. There were were 32 firm acquisitions in the recruitment services space last year, up significantly on the previous five-year average.

Labour markets globally are tightening, particularly in developed economies. At the same time, access to top talent is becoming increasingly difficult to source, as demand for that talent continues to rise. Higher demand has been one of the key drivers for acquisitions in the space. New analysis of the recruitment M&A market, from consultancy firm BDO, looks at current trends and future projections for activity in the segment.

The UK employment rate has grown considerably over the past decade, with the number of NEET decreasing, more women joining the workforce, and older people continuing to work, among other trends. Participation rates hit more than 75% in 2018, up from around 73% in 2014. The unemployment rate dropped to 4.1% last year, the lowest level in more than 40 years.

UK Recruitment Market

 

The recruitment industry has enjoyed strong growth over the same period, with revenues increasing from around £8 billion in 2014 to £12.3 billion last year. However, the growth rate for the industry is expected to stall for the coming years – the firm is projecting annual growth of 0.1% to 2024. The stall reflects deep seated uncertainties stemming from the future of the UK, from migration to internal employment in an increasingly uncertain future.

According to the firm’s analysis of market trends for UK listed FTSE recruitment companies, their performance over 2018 outperformed the wider FTSE market by a significant market during some months – the end-of-year uncertainty hit both recruitment and non-recruitment firms with relatively equal strength. The drop partly reflects market sentiment about the future of the UK.

FTSE Listed Recruitment Firms Average EV/EBITDA Multiple

 

The study also considered the multiples growth, average EV/EBITDA multiples, over the past year – which has shown considerable ups and downs. The yearly average multiple of 10.4x was above that of 2017’s 9.9x – although a 26% drop at the end of the year was significant. The drop was tied to the relative volatility in macroeconomic conditions affecting the globe, though another major contributing factor has been Brexit and political instability.

Global M&A

The global recruitment M&A market was particularly active in the UK, with 32 deals last year – a five-year high, and well above the 17 recorded for second-place US. Deal activity in the UK was focused on expertise and capacity in industrial and technical sectors, reflecting skills shortages in those segments. The US was largely focused on healthcare-related M&A, representing 25% of their market.

Overall, of the 92 deals in 2018 (a 21% drop on 2017) generalist firms were the most in demand, at 25% of the total, followed by education at 14% and engineering & construction at 13%. Software saw relatively low demand, at 2%.Investment into the UK by country

In terms of investments made into the UK, domestic investment continues to be the most dominant, accounting for 24 deals. Japan made three deals, although Brexit is seeing the country become increasingly nervous about investment. The US accounted for two deals. The longer-term trend shows that domestic investment is up on 2017, hitting the highest level in five years, while the US has reduced its M&A investment into the UK.

Commenting on the results, the firm noted, “The latest report shows the recruitment sector remains strong and continued to grow through 2018 despite facing many challenges. Notwithstanding the personalised nature of these services, the market continues to evolve, seeing traditional recruitment firms utilising available technology along with new entrants showcasing innovative platforms.”

Related: High UK employment masks troubled economy.