In response to the employment figures released from the Office of National Statistics (ONS) last week, Edward Winterton, Bibby Financial Services’ recruitment finance specialist, says:
“It was inevitable that further cuts in public sector spending in 2010 were going to have a detrimental impact on the UK jobs market and we are continuing to see the lagging effect of these cutbacks.
“The fact that unemployment rose between the start of September and the end of November suggests that the private sector has struggled to create enough jobs to offset the number of people being made redundant in the public sector. In fact, our own clients within the recruitment sector are reporting an increase in temporary positions as employers are looking to fill vacant places with short-term staff. This suggests that businesses remain cautious and are waiting to see how the economic landscape changes before committing to taking on permanent, long-term staff.
“The rise in unemployment has not been aided by the growing number of redundancies during this three month period, which has increased by 14,000 to reach 157,000, and the decline in the number of people working full and part-time. However, we are yet to see whether CIPD/KPMG’s forecast that private sector job creation in the lead up to Christmas did more than counteract these losses. If they have, we may see a temporary improvement in the next set of figures released by the ONS in February.
“Whether or not this happens, growth within the UK jobs market in 2011 looks set to remain stagnant with the British Chamber of Commerce forecasting that unemployment will rise by 100,000 to 2.6 million over this year. If this prediction is accurate, recruiters will be presented with the challenge of placing more candidates in fewer positions, sparking increased competition among the industry.
“In fact, we are already seeing signs of this happening, with a significant number of our new clients being start-up agencies looking to take advantage of the changing landscape of the UK jobs market and a rise in temporary positions in the private sector. However, once again, the future of the UK jobs market remains uncertain and for this very reason recruiters will benefit from preparing for further economic challenges ahead. A healthy cash flow is key to survival and with this in mind agencies should ensure that they have a steady flow of funds to relieve the burden of financial difficulties and ensure they are in a strong position to overcome the challenges they will be faced with in 2011.
“Alternative cash flow funding solutions, such as invoice finance, can enable recruitment firms to do this by providing them with an immediate and ongoing injection of cash into the business against the value of outstanding customer invoices as soon as they are issued. Outsourcing back office functions, such as payroll and credit control, as well as ensuring a regular and smooth flow of cash into the agency, can also save recruiters valuable management time, allowing them to concentrate on driving their business through these difficult times ahead. Our unique recruitment finance package is specially designed to incorporate all of these functions in order to support agencies at all stages of their life-cycle, whether they are starting up in the industry, or whether they are already well established and looking to grow.”
For more information, visit www.bibbyfinancialservices.com
