EXPERT SERVICES
FOR THE RECRUITMENT INDUSTRY
EXPERT SERVICES
FOR THE RECRUITMENT INDUSTRY
The corona virus pandemic has sent shock waves through the global economy, with every industry affected in some way. None more so however than the recruitment industry, which is often the first to suffer due to an economic downturn as employers tighten their belts because of financial uncertainty. No surprise then, that local and global recruitment has been particularly vulnerable to the impact of COVID-19, and recruitment agencies and industry pundits are now starting to pick through the aftermath of the UK lockdown to predict how any recovery might start and progress.
Industry insiders REC (Recruitment and Employment Confederation) recently released their latest Jobs Outlook, which suggests tentative growth in short term employment at least, while a recent survey by HSBC Professional Services found that recruitment firms expect a drop in income for 2020-2021. In this article, we look for further insights and predictions into what might be expected for recruitment in the coming months as the corona virus pandemic continues to affect the way the world works.
The UK government were criticised for their slow economic response to the pandemic, however the resulting financial aid package, including the furlough scheme, has been offering a lifeline for thousands of companies and employees across the board. 85% of recruitment firms are using the government tax and VAT deferment schemes, and 40% have taken out one of the government’s coronavirus loans.
The job retention scheme has managed to secure approximately 9.6 million jobs throughout the pandemic. But, as the government starts to wind down and attempt to recover from the estimated £35.4billion cost of the scheme, employers are beginning to look to the future. The HSBC report states that nearly half of the recruitment firms who responded are expecting to make furloughed staff redundant.
The REC Jobs Outlook report showed that 13% of private sector companies made redundancies in May-July, with only 8% of companies making them in the public sector. By July this had risen to 17% private and 18% public, and the prediction is that August-September numbers will continue the upward trend. The latest Labour Force Survey from the Office of National Statistics echoes these figures, reporting a 27,000 increase in UK redundancies in Q2 of 2020, but points out that this is still well below the record redundancies seen in the downturn of 2008.
The REC Jobs Outlook compares the relationship between economic conditions and hiring and investment decisions, with the two factors following identical trend lines. 35% of respondents from their latest survey said that they expect confidence in hiring and investment decisions to get worse. This is mirrored in the results of the HSBC survey, in which 4 out of 5 recruitment firms expect their full year income to reduce. This will mean further strain on any government aid packages, which will continue to impact the economy.
But it’s not all doom and gloom. The REC Jobs Outlook also reports that recruitment agencies expect there to be a small increase in the number of both permanent (16.6%) and temporary workers (18.1%) in the short term, with further increases over the coming months. The increase in temporary workers is perhaps to be expected due to the uncertainty in the economy in general, but the potential in the outlook for the hiring of permanent staff is a positive indication that both recruitment and the economy might be beginning to improve. There is still a higher proportion of temporary appointments however, with employers saying that temporary workers provide much needed short-term access to key skills.
But the buoyant temporary recruitment space doesn’t just support businesses, as previous research from REC has proven. Nearly 40% of people in Britain have done temporary, contract or freelance work in the past, with workers citing being able to find work quickly (36%) and earning money quickly (28%) as the reasons for taking on temporary positions. As the fallout from the corona virus continues, the number of candidates available for temporary work will likely increase, just as the requirement for temporary workers will continue to grow.
Despite this, the REC also reports that recruitment firms are concerned about skills shortages and availability of quality candidates, with respondents listing health and social care as likely to be the hardest hit area in recruiting for temporary positions, followed by technology and sales and retail. The anxiety around a lack of quality candidates for health and social care is mirrored in permanent recruiting, with education and industrial industries also causes for concern.
While it doesn’t look like things will return to the way they were before corona virus anytime soon, the “new normal” does represent some opportunities for growth. Chloe Clift, HSBC UK’s head of Professional Services, feels that recruitment companies are firmly looking towards the future despite going through a huge among of change, “They are now looking forward and asking who do we need to hire and how can we ramp up to meet demand?”
Recruitment agencies are stepping up to the plate and offering superior service to their clients and candidates in this crucial time, and we at JMK are proud to offer the back-office support and assistance that companies need in order to thrive. As an accredited supplier to the recruitment sector since 2002, we will continue to be here to support you in any way we can, whether in calm or uncertain times, just as we always have.
Since 2002, JMK have been compliantly consolidating back-office, accountancy and payroll functions.
We have evolved to provide a range of expert services; such as Professional Employer Organisation (PEO), or Back Office Support (BOS) or Funding, becoming a leading provider to the contracting industry.
We know every agency is different in some shape or form, even if only by a little, but important bit. Combining our knowledge and experience of multiple sectors enables JMK to support you all from recruiters and payroll, through to finance, compliance and management.
With JMK as your trusted partner, even the smallest team can process the largest payroll, regardless of payroll type.
Have a look at the wide range of services our Professional Employer Organisation (PEO) or Back Office Support (BOS) can provide to you and your business, it is far more than just payroll and finance.
