Many recruitment firms across the sector have started the year strongly, some achieving record sales in the first Quarter. You may have seen the accolades posted on LinkedIn; we are not an industry to hold back on letting you know when it’s going well!

 The ONS has recently published the GDP figures for Q1, showing growth in the UK of 0.6%, outperforming all other G7 countries. The Services sector increased by 0.8% over the same period. However, we face real uncertainty with a multitude of variables that could fuel further volatility in our markets. Conflict continues to rage in the Middle East and Ukraine, coupled with broader geopolitical fragmentation, which is pounding supply chains and, therefore, commodity prices, particularly oil. Inflation and debt remain constant challenges globally and, for companies in the UK, growth is now more expensive under the current government. Tech stocks potentially face a seismic recalibration and, while I dread to mention politics, there is no comfort there for those seeking stability either domestically, or abroad. So, buckle up, we could experience some major turbulence in 2026.

 Therefore, while I hope I’m wrong, it may be that you have already had your strongest Quarter in 2026. It makes sense to be prepared either way, so here are 5 themes to consider in the coming months:

1.    Cash

 Build your runway. As a general guide, in the current climate, a contract weighted business should build the equivalent of 3 months’ overheads in the bank; 6 months for permanent centric firms. A healthy bank balance will give you options and the luxury of calm and consistent decision making

2.    Debtors

 This is a market that requires real discipline with credit control. You can have strong and robust commercial discussions with senior decision makers and still build relationships while bringing down your debtor days. If you aim to extinguish debt over 30 days over the coming months you will identify potential problems quickly

3.    Dependency

 Whether it’s a single customer, or a high performing consultant, if you are relying on their revenue to paper over cracks elsewhere in your operation, then this constitutes a major risk. While relying on “average productivity per head” data may give an indication of profitability, the percentage of total fee earners over an agreed threshold will give you more clarity in terms of underlying performance and the relative strength of your processes and leadership. This should be an integral theme when building a platform for future growth

4.    People

 In the coming months, your high performers and strong prospects will face distraction. Whether from the competition, or from factors away from work such as the rising costs of living. Proactive engagement will act as a glue for retention if it’s well packaged within a clear vision for the business and longer-term incentive. Active listening among leaders may prove more valuable than just “selling the dream”

5.    Profitability

 Any self-respecting leader will be driving sales, but that revenue needs to hold more value in a fluctuating market. A key metric to unlock that value is the percentage of profit to fee income. Targets will vary but enterprise values tend to look more appealing if you’re consistently converting at least 25%-30% of your net fee income into profit. Disciplined businesses are tight on discretionary spend. With incentives, perhaps consider extending the qualification period from a month to a quarter to reward consistency rather than sporadic achievement and gain more sustainable value as a result

 Some companies within Human Capital have already shown a decline early in Q2, but I hope that the broader sector can carry some momentum from Q1 and that we avoid the Dead Cat Bounce referred to above. Either way, I hope these themes prove useful and please do feel free to contact me if you want any further input, particularly around the construction of commercial dashboards within your business.

No animals were harmed in the making of this post...