Despite some pundits opining that the recruitment sector in UK would take a hit because of the expected Brexit impact, the sector has for the past five years seen exponential growth with a market valuation of £38.9 billion at the end of 2019. The coronavirus has wreaked havoc on the economies of many countries and while authorities in the UK have put in place admirable initiatives and policies to cushion the economy such as the Job Retention Scheme estimated to swallow an estimated £42 billion, the latest trends indicate the economy is going to take some even bigger hits. Despite the rise in work from home job opportunities and digital marketing jobs in London through the media industry, the recruitment sector is showing the biggest slack since the global economic crash happened in 2009.
How Is the Coronavirus Impact Being Felt Across Different Areas?
Impact on Rates of Employment
To understand how poorly the recruitment industry is faring, you just have to consider the current rates of employment. At the moment, the country is witnessing the highest unemployment levels since the 70s. The growth trajectory that the recruitment sector was enjoy is becoming quickly undone. In the month of March alone, the number of people making unemployment claims spiralled with a 910% increase being registered for persons seeking universal credit. It should also not come as a surprise that the UK unemployment rate jumped from 3.8% in Q1 of 2020 to 10% in Q2 of the same year. These kinds of figures were last recorded in 1993.
Impact on Businesses
The Covid-19 outbreak brought with it lockdowns and curfews… The industries have been hardest hit by these coronavirus measures are the leisure and hospitality sectors. These sectors have been forced to downscale their operations with some enterprises even being forced to shut down. Data from research studies paints a grim picture for employees in the leisure and hospitality sectors with 46% of workers or about 11 million people expecting to lose their jobs in the coming months. Though the measures being put in place to curb the spread of the virus mostly affect the job security of workers in the leisure and hospitality industry, there are employees who also face grim employment prospects in other sectors of the economy such as those who offer services in consumer-focused industries, mining, retail, transportation and perhaps also in the field of recruitment.
Though the data at hand is worrying, most people opine that the virus outbreak will only cause a short-term economic slowdown instead of a full economic recession. Current forecasts suggest that the UK GDP will decrease by 35% in Q2 of 2020 but this will be followed by a rapid economic recovery in Q3 & Q4 of 2020 before the GPD finally stabilises to normal levels at the beginning of 2021. So, what does this projected data say about the performance of the recruitment sector?
Consider this… Just a few months before the outbreak of the coronavirus, there were believable projections showing that the recruitment industry would grow at rates of between 3%-6% even when the UK was navigating through the effects of a divorce from the EU. Though our circumstances have changed, there is one undeniable fact… Business enterprises that adapt in order to survive through our current circumstances will prime themselves to be industry leaders in what will most likely be a very different employment sector.
Impact on Recruitment Agencies
Once we get through the cloud that is the coronavirus, recruiters will play a key role in re-making the world. Given the current forecasts that the unemployment rates are likely to drop to the 6.6% mark before year’s end, recruiters will have a key role in re-building the economy. The recruitment sector will be important in rejuvenating the UK workforce as well as helping business owners to adjust to the post Covid-19 recruitment strategies such as adoption of new technology-based methods of finding suitable talents like handling virtual interviews and hiring remote workers.
Recruitment professionals handling the needs of sectors that are seeing increased workforce demands such as the healthcare and pharmaceutical industry as well as in the Lifesciences have most likely made adjustments in the way that they deliver their services so as to support the fight against the spread of the virus. In the long term, our hope is that the recruitment sector for these industries will change with more investments being made in technology and staff member numbers being shored up to cater for any emerging future needs. Recruitment enterprises that have adopted work-from-home strategies, have the requisite technologies in place as well as strong but flexible operational foundations will be best primed to support future workforce needs as well as grow.
Simply put, the coronavirus outbreak has altered the recruitment and employment landscape forever. When this cloud finally passed, expect an operating environment that is way different from what we were used to in the past. After Covid-19, it will be business unusual for the recruitment and employment sector in the UK.