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.
Dedication to Customer Service
“Job hunting can be a particularly stressful process for even the most experience professional, but Select’s efficiency and dedication to customer service shone through from the second I made contact with them. Helen really took her time to get to know me and my individual job hunting needs. She put my CV forward for positions she knew would work for me. I was well-prepped for interviews and was kept informed at every stage of the process, from job hunting to interviews, from being offered a job to successful placement.”
Select Job Seeker
Always go the extra mile
“I have been working with Select for the past few months and they have helped me to fill key support roles in my team with high quality candidates. The company is a real pleasure to work with, the team always go the extra mile and are very effective in matching the right candidate to the role. I highly recommend working with them.”
Went the Extra Mile
“Great service provided by everyone at Select Appointments. Personally, Helen was very supportive throughout the whole process. She was available on the end of the phone at any time and went to extra mile, even helping with interview preparation. I’m sure I wouldn’t have got the job without her assistance!
Overall, I couldn’t recommend Select Appointments highly enough.”
Select Job Seeker
Extension of our own operation
“The team spirit and customer focus prevalent at the Select office in Crawley is clearly obvious to all and my team now see Select Appointments, simply, as an extension of our own operation. It is a pleasure doing business with Select Appointments.”
Looked After Very Well
“Select were pro-active in finding me temporary work and, as a result of one of their short-term assignments, I was called back by the same company for five weeks and then offered a six-month contract by that company. I was looked after very well by Select, administratively and in finding me work, and I am most grateful for their efforts on my behalf.”
Select Job Seeker
Bent Over Backwards
“I felt that Select bent over backwards to ensure that our vacancy was filled by the most suitable person; thank you!”
I Absolutely Love My Job
“I just wanted to pass on my sincere thanks to you and your team. I absolutely love my job and have now been made a permanent member of staff because it was such a great match to my skills. I am so glad that I came into your agency!”
Select Job Seeker
Cannot Thank Him Enough
“I am very thankful for what Select have done for me. At first, I was getting no interviews and literally no hope for any jobs. I applied to Select for an advertised job, which was in my area of expertise and my Consultant thought I was highly suitable for this job and he gave me a chance, so he put me forward. He sorted out all the interviews, communicated well with me and never left me out of sync. I cannot thank him enough for the high standard of customer service and perseverance to get me the job that I am in now!”
Select Job Seeker
Completely Understand Our Requirements
“We have been extremely happy with the service Select has given us. Our Consultant seemed to completely understand our requirements and saved us a huge amount of time putting forward the right people for our vacancies. We will definitely be using Select again!”
Changed My Life
“I am so happy you have no idea! You have helped change my life and I can now start a fresh and long lasting career. I cannot thank you enough for considering, helping and guiding me all the way through.
I will certainly be recommending you and Select recruitment to anyone I know. Thank you for everything!”
Select Job Seeker