Navigating the Future of the Recruitment Industry
What Does the Future of the Recruitment Industry Look Like Post-COVID?
While Coronavirus has led us all to navigate unchartered territory, the recruitment industry has been particularly hard-hit. But what does the future hold? Recent conversations with a number of our recruitment agency partners have highlighted some interesting insights.
Adaptability is Key
Many of our agency partners were impacted as companies ceased their hiring efforts. This blow was felt nationwide as, according to a recent REC webinar, job vacancies fell by 463,000 in the last quarter to a total of 333,000.
The ability of agencies to adapt to such dramatic and fast change has been vital. From conversations with many of our agency partners, we know many have been tested to the limit, facing all kinds of challenges from furloughing staff to managing remote working, maintaining client relationships, and altering business strategy to protect income.
And there is more change ahead.
More candidates than ever are applying for every vacancy. The BBC has reported that the average application-to-job ratio has risen by 84% in the second quarter of 2020. Witnessing this kind of drastic impact means that agencies will now need to be as efficient as possible when assessing candidates for roles and placing the right candidate in the right role is more challenging than ever.
Diversification may also come into play with the need for agencies to spread their risk across several sectors to ensure resilience. Our clients report that IT and technology, driving, and construction have remained stronger than most.
Digital comes to the fore
While clients are cutting back on their hiring efforts, increasing the pressure on agencies to source the right applicant for every role, alterations in working conditions are also shaking up the future of the industry; with an increase in remote end-to-end recruitment and reduced contact with applicants and end hirers. A recent survey of our clients showed that, for many, this necessary reliance on “technology for collaboration”, will be the biggest change to emerge out of the Coronavirus pandemic.
Continuing business-as-usual will be difficult amongst all this change, but agencies must shape up for a long-term digital future, and fast.
An increase in temporary recruitment
Many clients, particularly those who navigated the 2008 crash, are predicting a rise in the temporary labour market, a likely trend in an economic recession.
According to REC, where the UK’s workforce was split 80% permanent and 20% temporary a few years ago, we’re now seeing a quick acceleration to a 70-30% split, which is predicted to rapidly progress to 60-40% by 2021.
With an increased focus on temporary employment from end hirers who can’t commit to hiring permanent employees, this may signal a need for recruitment agencies to invest time and energy into managing relations with the growing contractor and freelance economy.
There has never been a better moment to inspire and upskill staff so that recruitment consultants are equipped with the right knowledge and advice to place contractors in relevant temporary roles. Of course, the challenge is to navigate the various working options of limited company contracting, umbrella contracting, freelance etc, alongside compliance complexities such as KID forms and IR35, which one of our agency partners believes will “be an increased driver for candidates to look at PAYE” – this is where we can help.
We offer comprehensive training support to all our agency partners. Plus, we can offer financial support to agency partners who wish to enhance the skills of their consultants via apprenticeship schemes. Please get in touch to find out more.
Partnerships will be important
One important aspect of getting your agency prepared for a growing contractor talent pool is considering how you may manage the payroll for an estimated 20% increase in temporary workers.
Whether you decide to begin by looking for an Umbrella partner, an outsourced employment (PEO) option, or accountancy support for limited company contractors, we’re happy to talk you through the various possibilities and help you decide how you can best prepare for the changes over the coming year.
Compliance is Ever-Present
Amid all the confusion that Coronavirus has delivered, the industry faces yet another challenge: the need to prepare for IR35 reforms, due to come into effect in April 2021.
Hopefully, your preparations are already underway, but if your agency hasn’t started thinking about the reforms, especially if you have never had to manage large numbers of contractors before, then we can help you develop an action plan to coincide with the rise in your temporary workforce – if you need it.
Grasping the opportunity
One of our agency partners suggested the current decline in hiring efforts may be a hidden positive for the industry because agencies and consultants who are efficient, reliable, and compliant will survive in a time where those who cut corners may not. So, grasping this opportunity is crucial.
Whatever the future holds, our expert team will be on hand whenever you need us to provide personalised and detailed support – whether you’re concerned with managing IR35, dealing with an influx of temporary workers, or managing their payroll, we’re here to help – so do contact us with whatever you need.