In 2019, UK recruitment is in an uncertain place. Alongside the usual pressures of the industry, it now has to contend with the country’s looming departure from the European Union – which, even with the exit fast approaching, still has no clear shape. Brexit may have severe consequences for UK recruiters: it may be harder to import quality talent, employers may be less willing to hire new staff, and even the basic legal framework that they operate under may be subject to abrupt and significant change.
Bullhorn’s Global Recruitment Insights and Data analyses the outlook for the industry this year, and it reflects much of this uncertainty, along with many of the national market’s more persistent challenges.
Here’s what it identified as the major industry trends.
The ongoing skills shortage
Skills shortages are not a problem the UK recruitment industry can fairly blame on Brexit: they’ve been an issue for many years now, and in areas such as STEM, they’ve proven particularly stubborn – to the point where they cost the industry £1.5 billion a year in hiring, training, salaries, and other related costs.
In 2019, though, the problem of skills shortages is especially pronounced. According to Bullhorn’s research, over three quarters (78%) of recruiters said that overcoming skills shortages is a top hiring challenge for this year, while a similar number (77%) agreed that clients must accelerate salary increases to compete for the best candidates. Over a third (34%) said that encouraging employers to offer these increases will be another principle challenge for the year, given uncertain economic conditions and long term sustainability.
Where recruiters can’t find new candidates, many are looking to offer value in other areas such as reskilling existing candidates: over three quarters (77%) said they support this idea in order to bring some depth to shallow talent pools. But a quarter of recruiters also cite the actual process of reskilling as a difficult challenge.
There is also evidence that the workforce’s current diversity deficit could be working against it when it comes to finding talent. Some 60% of respondents claimed that organisations which are strong in this area tend to be more productive – and it’s not hard to see why. When opportunities are denied to candidates from non-traditional backgrounds, they’re also denied to the hiring business: a broader perspective makes for a more agile and more effective organisation. Employees who look the same, think the same, and have the same profiles aren’t going to drive creativity in the ways that a workforce which draws on a range of backgrounds can.
Economics and politics are complicating the skills shortage for recruitment firms, but if they look for the right hire – rather than the one who simply ticks all the traditional boxes – they can benefit.
Growing with technology
Hiring challenges may be difficult to overcome, but UK firms are growing and expanding in spite of them. While only 9% expect to grow through mergers and acquisitions, four-fifths (80%) of recruiters expect to grow by increasing their business with new and existing clients.
Accordingly, it’s not all that surprising that over a quarter of recruiters are anticipating revenue increases of 25% or more over the year – or that some 61% also expect their number of temporary placements to rise, and 58% expect to increase their investment in technology.
Technology can indeed play a central role for recruiters. While it will obviously streamline manual processes and free up time to focus on strategic business activities, it can also foster greater diversity. The growing intelligence of technology such as CRM and ATS systems, chatbots, and CV parsing tools, can help recruiters see through the bias of a typical role profile and support them in finding the perhaps unconventional – yet perfect – hire.
But technology is also the source of some anxiety. Asked to rank their three main operational challenges for 2019, four-fifths (80%) of recruiters cited digital transformation. If technology is unambiguously an asset to firms, many still consider its benefits hard-won. Alongside the perennial issues of pricing pressure and margin compression (cited by 54% of recruiters), over a third (37%) also expressed concern about the technologically-adjacent issues of cybersecurity and data protection compliance.
Political and economic challenges
Recruiters were keen to highlight the uncertain political, economic, and regulatory context of the current moment – including, but certainly not limited to, Brexit.
The ambiguity around the economy and future growth was cited as the main challenge for 58% of recruiters. As explained earlier, this isn’t necessarily surprising: trade, labour, and business confidence are all in a state of limbo until the UK’s exit from the European Union is finalised. These things could be completely destabilised, or they could stay relatively the same. But the lack of clarity is clearly preying on recruiters’ minds.
Whatever happens, leaving the EU doesn’t mean recruitment won’t continue to be affected by it. This is reflected in the number two challenge: cybersecurity and data protection regulations such as the EU GDPR – which applies to any entity using any information related to EU residents.
Finally, the possibility of restrictions on foreign labour were cited by 30% of recruiters. If EU hires need visas to live and work in the UK, or if they have to pass some salary threshold, firms will naturally find it harder to fill roles.
In 2019, the recruitment industry faces a serious test of its resilience. Brexit is certainly complicating matters, but in many respects, it’s bringing long-simmering issues to a boil. This year, the question is simple: can UK recruitment adapt to some of the most daunting circumstances it’s faced in the last few decades?
It’s an industry that’s proven ready for anything in the past – so let’s hope it draws on this strength again in the near future. British enterprise may well depend on it.