Many sectors are now looking forward to leaving 2020 behind and are hopeful for a brighter future in 2021 and beyond.
However, it is difficult to deny that the last year hasn’t changed the recruitment sector and despite hopes for a return to normality in the 12 months ahead, many obstacles and challenges still lay ahead.
As we enter a new year, our experienced team of recruitment industry experts have taken a look at recent trends and prepared a list of potential challenges for agencies to consider.
A decline in demand?
The UK has seen a further drop in permanent placements in the last few months, which coincides with a growing demand for temporary billings in November.
The latest Recruitment and Employment Confederation (REC) UK Report on Jobs survey shows that overall demand for staff has fallen in the last month, driven by a marked fall in permanent job vacancies.
Demand for new roles has been affected by a growing number of redundancies and a general cost-cutting attitude amongst many businesses, including those that were largely unaffected by the pandemic.
Only two of the ten monitored job categories in the survey registered a higher demand for permanent workers in November, namely IT & Computing and Engineering. Unsurprisingly, the worst performers were Hotel & Catering and Retail.
A decline in demand has led to a greater availability of both permanent and temporary candidates but has conversely led to downward pressure on starting pay, which is affecting the performance-related fees charged by many recruiters for finding a successful candidate.
The British economy is starting to show signs of recovery after a year that saw economic output fall to its lowest level in 300 years.
The fact that the UK is no longer in recession and is experiencing growth, however small, is considered by many to be a significant achievement.
Meanwhile, the latest employment figures show that while the rate of unemployment is climbing, it is still growing at a slower rate than expected.
In fact, compared to many other developed nations, the UK maintains a relatively low rate of unemployment.
While in the main this is good news, the reality of the situation is that in the last year there have been clear winners and losers during the pandemic.
Sectors such as arts and culture, hospitality, accommodation and tourism have been hit hard by repeated changes to the COVID-19 restrictions.
In comparison, sectors such as tech have boomed as demand for IT products and services grows. This means that the UK is now experiencing uneven growth.
For recruiters, many of whom specialise in certain industries, it means that they may need to adjust their approach to target sectors where there is a greater demand for roles.
We stand at the precipice of one of the most significant changes to the UK’s relationship with the EU. From 1 January 2021, the rules regarding the free movement of people come to an end, which means citizens of EU member states face a much tougher process to obtain the right to live and work in the UK.
The UK’s new points-based immigration is now live to help businesses as they prepare for the end of the Brexit transition period on 31 December 2020. It outlines who can work in the UK once the free movement agreement with the EU ends on 1 January 2021.
There are several new immigration categories under the system, which include routes for international students and graduates, skilled workers with job offers and highly skilled experts without job offers.
Under the skilled worker route, points are awarded for various factors, such as having a job offer at the appropriate skill level in an eligible occupation, knowledge of English and a salary threshold, which will typically be at least £25,600.
Where the applicant’s salary is below £25,600 but above £20,480, they may be able to rely on an exception to make an application.
This may impose restrictions on overseas talent for some sectors, particularly those with lower pay. However, to support those sectors most reliant on overseas expertise the Government has also launched the Global Talent, Innovator and Start-Up visas which have been designed to attract people with exceptional talent and expertise, particularly in the fields of arts, engineering, science, technology and culture.
Recruiters need to consider carefully the impact that Brexit may have on their talent search overseas and factor this into the services they provide.
A sense of uncertainty
Above all, the next year is tinged with a sense of uncertainty. Businesses have a lot to contend with in 2021, including concerns over trade with Europe, further potential pandemic restrictions and a weakened British economy.
The lack of certainty is making it exceptionally difficult for many businesses to plan, as many don’t know where the next opportunity or challenge may arise.
There is obviously a temptation to just do nothing and wait for something to come up, but letting things tick over until a better opportunity emerges can stall growth and prevent a company from succeeding.
Instead, business owners should be using this time now to review their finances and put together strategies to deal with issues in the short to medium-term that may prevent their company from surviving or thriving.