2018: What lies ahead for recruitment?

Nick Martindale

The year ahead promises to be an eventful one in both the recruitment industry and the wider economy.

For many recruiters, it is likely to be dominated by the potential implications of Brexit, with skills shortages a particular concern. “We know that EU workers are already leaving the country due to the uncertainties around their future status in the UK and that fewer are coming over from the continent,” says Tom Hadley, director of policy at the REC. “If this continues, the pool of available candidates for vacancies will diminish even further.” Low-skilled sectors, such as warehousing, hospitality or agriculture and food production, could be hit especially hard, he warns.

Brexit, and skills shortages, will be the main challenges for the coming year, believes Nicholas McVeigh-Crabbe, director at construction and residential property recruiter BBR Services. “The construction industry has been balancing a skills shortage for a number of years and, without improved training and enhanced opportunities for young people entering the sector, it will only worsen,” he says. “As Brexit negotiations continue, there is a real possibility we could see a further fall in the numbers of skilled EU construction workers here, who account for around 30% of the candidates we recruit for our clients.”

Future restrictions of people entering the UK could also compound the issue, warns Brian Stahelin, founder and managing director of Stafflex. “UK unemployment stands at 1.43 million,” he says. “If we assume 50% of the unemployment figure cannot work for various genuine reasons and there are approximately 750,000 current vacancies, then we effectively have full employment, and no one left to fill the jobs. This is exacerbated when new jobs are being created.” The people who may be available don’t necessarily live where the jobs are, he adds.

Elsewhere, the gig economy and issue of employment status is also likely to be a hot topic, as businesses wait to see how the government will respond to the Taylor Review. “It is likely that there will be measures introduced to give those working in the gig economy a minimum package of rights and benefits, and care needs to be taken to ensure that any changes do not have unintended consequences for those who enjoy the flexibility of working for themselves and make it a positive choice,” says Julia Kermode, chief executive of The Freelancer & Contractor Services Association (FCSA).

There could be moves to improve the transparency of pay, ensure holiday pay is paid and that minimum wage regulations are adhered to, and attempts to bring clarity to workers around how they are engaged and what their accompanying benefits and rights are, she adds.

Hadley also believes this could lead to changes for so-called “gig workers” and the companies which use them. “What we want to see is a level playing field so that work platforms and operators like Uber and Deliveroo are regulated the same way as recruitment agencies,” he says.

The coming year could also see changes to the apprenticeship levy, as the government begins to assess its impact. “It’s no secret that we and others in the professional recruitment sector believe it is unfair that many SME recruiters, which manage PAYE for temporary workers, are contributing to a scheme where they don’t have the volume of internal staff to take full advantage,” says Swain. “However, it was encouraging to hear the chancellor say that the government is keeping the flexibility that levy payers have to spend their levy funds ‘under review’ in the Autumn Budget.”

Dale Williams, managing director of Yolk Recruitment, believes the levy will result in more apprenticeships in sectors which have historically invested in them, such as manufacturing, technology and engineering, which could help to alleviate pressure around skills shortages. “Employers may use this levy as a reason to develop existing staff rather than taking on new apprentices,” he warns. “However, it may not be a bad thing if it is being used to upskill current staff members as it will benefit the workforce as a whole.”

For recruitment firms themselves, this year will also see the introduction of GDPR, with implications for how they handle candidate and client data. “GDPR will come into effect on 25 May, giving individuals new rights such as the right to withdraw consent for the processing of their data, and the right to have all their personal details deleted,” says Hadley. “It is essential that recruiters are aware of these changes, understand them and start to prepare before GDPR comes into effect, for example by appointing data protection officers.” Recruiters also have a role to play in raising awareness among clients, he adds.

This could also create opportunities for recruiters by forcing them to operate more efficiently, believes Robert Dagge, managing director at Dynistics. “The average company wastes 12% of revenue due to inaccurate information, so the first step is to get your data in shape, both clean and compliant,” he says. “Recruiters should respond by implementing modern business intelligence tools – such as dashboards – to help them see their most important data at a glance, and monitor their data quality regularly and in real-time.”

How the industry itself fares is likely to be directly linked to the fortunes of the UK economy, and the progress or otherwise made in Brexit negotiations, believes Mark Lee, founder and CEO at ContractElite. “A continuing lack of clarity as we go through the year will create fear and risk aversion, which will keep cash in wallets,” he says. “This said, if sentiment steers businesses away from permanent hiring, then temporary and contractor/interim hiring should logically see an upturn.”

Any uncertainty, coupled with skills shortages, could also make it harder for recruiters to persuade people to move jobs, believes Claire Leigh, managing director of Brampton Recruitment. “Between Brexit, the skills shortage and low unemployment, recruiters will be looking for a steady stream of candidates in 2018, possibly from new sources, to target their specialist areas,” she says. “In turn, this could result in prospective candidates finding there are many opportunities with great benefits and salary packages waiting for them in 2018.”

This could also see employers looking to different models when it comes to recruitment, suggests Michael Hall, UK expansion director at Talentful. “We will see a further shift in 2018 towards businesses looking to control their employer brand and message by hiring more directly and using solutions where specialist recruiters are based on site,” he says. “This is also ideal for candidates as it gives them a through-the-keyhole view of the company before the interview process, something that is very hard to do through traditional third-party recruitment practices.”