Over the past year, I have spoken with a growing number of recruitment agencies who are being asked to review their funding arrangements. In many cases, this has less to do with their performance and more to do with changes happening within the funding market itself.

Recruitment funding is operationally demanding. Agencies fund weekly payroll against long and often variable payment terms. They manage client concentration, disputes and compliance, while operating in fast-moving and competitive markets. This combination creates pressures that do not exist in many other sectors.

Historically, recruitment invoice finance was often delivered within broader, generalist funding structures, including bank-led models. For a time, that worked. The market was simpler, delivery models were more predictable and operational complexity was easier to manage.

That context has changed.

As workforce delivery has become more flexible, more global and more technology-driven, recruitment funding has become harder to support within standardised models. This has led some funders to reduce their exposure to recruitment or to shut down invoice finance offerings altogether.

For agencies affected by these changes, the challenge is not simply finding another source of capital. It is finding a funding partner that understands how recruitment actually operates day to day.

What we are seeing now is a natural shift towards specialisation. Invoice finance is not disappearing from recruitment. It is moving towards providers whose core focus is the sector itself, and whose systems, processes and risk appetite are designed specifically for its realities.

This distinction matters. Being funded by a specialist is not just about access to money. It is about working with a partner that understands payroll as the heartbeat of the business, not an afterthought. It is about having funding, credit processes and operational support that are aligned with how recruitment works in practice.

In my view, this shift reflects a broader evolution across the workforce market. As recruitment businesses adapt to new delivery models and growing complexity, the infrastructure supporting them needs to be deliberately designed for the sector. Specialisation is no longer a preference. It is becoming a requirement.