Putting 2018 in the rear-view
What effect have Brexit and other factors had on the recruitment industry?
2018 was a year of uncertainty and change, not just in the recruitment industry, but across the country and matters are looking to get more unpredictable into 2019. Despite this state of unpredictability, the recruitment industry rose to the challenges that 2018 posed and the total industry turnover for 2017/2018 was £35.7 billion – an increase of 11% year on year. We have taken a look back at events that happened last year to put 2018 in the rearview and drive forward to what 2019 might hold.
Challenges in the Employment Market
The major challenge facing hirers over the past 12 months was a growing lack of readily-available candidates. This lack of candidates has affected the recruitment industry as a whole, making both temporary and permanent, skilled and non-skilled positions difficult to fill.
The skills shortage is in part down to the low unemployment rate, that hit 4% in Sept-Nov of last year (click here to see our 2018 blog about this). Plus, less permanent employees are looking to move jobs right now, thus creating a near-record number of vacancies going unfilled and talent gaps opening in skilled industries like engineering, IT, finance and legal. With more people in jobs and less availability in the marketplace, headhunting has become a much more integral part of the recruiter’s role.
Low EU Migration
In the wake of Brexit uncertainty, net migration from the EU to the UK has slumped to a 6-year low, according to the Office for National Statistics (ONS). Since the referendum, EU migrants have been leaving our shores in larger numbers, perhaps due to the lower value of the pound making it a less attractive place to work. As a result, industries like manufacturing, warehousing, hospitality, construction and farming, which rely on EU migrants for the bulk of their workforce, have struggled and continue to struggle to fill demand.
Brexit aside, the introduction of IR35 reforms (find out if IR35 applies to you) in April, also forced recruitment agencies to evolve and take on the increased responsibility for administering PAYE for specific candidates in the Public sector.
Prior to the 2018 IR35 reform changes, the focus was on contractors to evaluate their own IR35 status for each contract and deduct tax in line with this. However, the changes that were enforced on the public sector in 2019 have switched this focus to place the responsibility on the companies employing the contractors. Therefore, recruitment businesses placing contract workers with their clients now have this additional administration task to manage.
Consequences in the Employment Market
In spite of these challenges faced by recruiters, the Recruitment and Employment Confederation (REC) has revealed that as at March 2018, a total of 30,430 recruitment enterprises were registered in the UK, which is almost 10% higher than those recorded in March 2017. A growth in enterprise that signifies the ability of the industry to adapt to difficult situations and provide value added services to both businesses and candidates during challenging times.
The Rise of Permanent Placements
The majority of these new enterprise businesses have a specific focus on placing permanent candidates; growth in this area has probably been facilitated by the rise in the average permanent placement fee that increased across last year, from 14.9% to 15.4%. Additionally, starting wages for permanent staff have seen and continue to see a marked rise, due in part to the mandatory increase in the National Minimum Wage and the increasing skills shortage.
Not only have placement fees risen to cover the increasing cost of finding skilled candidates, but employers are having to try harder to hire and retain valued members of staff. Thus, temporary to permanent transfers have risen in frequency and the length of temporary placements has lengthened with 64% lasting 12 weeks or more (61% in 2016/2017). All of these factors have culminated in growth in the recruitment sector and has created a candidate driven marketplace when negotiating new terms.
Forecasts for 2019
As the UK government are yet to come to any conclusive, unifying Brexit decisions, the current state of uncertainty is going to continue for 2019 and no one can say how long for. This uncertainty will further exacerbate the lack of available candidates as those in jobs stay securely in position until Brexit comes to fruition and migration of workers from EU countries continues to decline.
There is no denying that the employment marketplace for hirers and recruiters moving into 2019 is a challenging environment. However, there is light at the end of the tunnel, Select Appointments have been here to assist businesses and candidates with recruitment for over 35 years and that is not going to change in 2019.
Whether you are a hirer or a candidate, we are here for you through deal or no deal. Get in contact with your local office today to find out more.
“Caroline and her team took the time to listen to and fully understand our requirements. They demonstrated their understanding by presenting us with a short list of candidates all of whom could have filled the post. Thoroughly recommended for their fantastic service, thank you.”
Select Client – Google Review – Select Appointments St Albans
Second to None
“I have worked with and for ‘Select Appointments’ since Aug 1st 2017. I have nothing but absolute praise for the care and attention I have received whilst working under their ‘umbrella’. The interaction and provision of work, remuneration and holiday entitlement is in my opinion second to none, I would certainly recommend the agency to anyone with full and utmost confidence.”
Select Candidate – Google Review – Select Appointments Norwich
Best agency in Cambridge
“Select Cambridge is an excellent agency specialised in offering jobs in the Hospitality sector. The quantity and quality offered make it the best agency in Cambridge. Personally, I have had the opportunity to work with […] an excellent consultant, attentive to the details and needs of her employees. I highly recommend it for those who are considering joining this sector.”
Select Candidate – Google Review – Select Hospitality Cambridge
They Invest the Time
“I have worked with the Select team on both assisting me recruit as a customer and more recently as a candidate. Having first worked with Select on a couple of recruitment projects with great success she was my first call when I needed assistance with my own career move.
For me the difference with Select is that they invest the time to understand your requirements both as a business customer and as a candidate and match you to the right people or positions. Unlike a lot of Recruitment companies the communication is strong from the Select team with regular updates and you never feel like just another candidate in a drawer. Dedication, passion, professionalism and commitment are the qualities that set them apart from the rest and I cannot rate the Select team more highly.”
Select Client & Candidate – Google Review – Select Appointments Lowestoft
Very Supportive Team
“I worked with the very supportive team from Select. He rang just before every appointment I had with my new employers to offer advice and support. He was also on the end of the phone when I asked for advice about my current position. Needless to say, I was offered the job I was recruited for and had a very good experience with Select.”
Select Candidate – Google Review – Select Hospitality Peterborough
Able to Get Results
“Select have been absolutely amazing from the get go. I haven’t had any problems with finding a job, pay or communication. The team found me a new job within 1 week and another job after the contract ended on that one.
I would heavily recommend this company as not only are the staff so friendly, they are able to get the results that you want from employment. After years of working with other agencies and having many problems, Select come out on top and will be using them in the future. I found an amazing job and was so sad to leave it as I have continued my journey at university.”
Select Candidate – Google Review – Select Appointments Chelmsford
Lovely Agency to Temp With
“Lovely agency to Temp with. Always there for advice and respond quickly to any queries I have had over the last couple of months. I would like to thank the team for the incredible service they have provided me, very professional and they really care about their work.”
Select Candidate – Google Review – Select Appointments Oxford
Cannot Recommend Them Enough
“Select Appointments are an AMAZING agency!
My consultant believed in me and saw my strengths. He gave me back my work confidence then found me my dream job. Nothing is too much trouble. The team are with you every step of the way ensuring that you are well prepared. I cannot recommend Select highly enough.”
Select Candidate – Google Review – Select Appointments Northampton
“Probably the very first agency that provided amazing customer experience to me. Staff are very professional and friendly to the point where they have managed to find something that suits me in the first 30 minutes of walking in for the first time. Paperwork isn’t as burdensome as in other recruitment agencies which is a big plus. I got an impression of genuine care from them due to the fact that they were always in contact with me and whenever I had an enquiry they responded asap.”
Select Candidate – Google Review – Select Appointments Lincoln
Dedication is Abundantly Clear
“I am an IT Engineer specialising in Apple systems. Over the course of 1 year I entertained many recruiters claiming their understanding and ability in finding a position that suited my expertise.
Chris Lo is the 1st (& only) recruiter in my experience that not only dedicated & understood my goals, but also had the technical education to fully understand my abilities and provide appropriate prospects. This lead to my current position with a company & group of people I want to stay with indefinitely.
Chris’s dedication is abundantly clear; extremely communicative and driven nature, exemplifies his passion and character.”
Select Candidate – Google Review – Select Appointments Croydon