Can Recruiters Weather an Economic Downturn? | Recruitment News UK

The head of a UK recruitment giant makes an economic warning. But will the solutions being offered assist all recruiters equally?

Technology shapes the way we work and live. Where should recruitment enterprise leaders be investing their resources for maximum effect?

The ONS releases jobs market data for March-May 2019. What do the figures tell us about the changing shape of life and work in the UK?

UK Recruitment Giant’s recession warning

Industry giant issues warning over UK jobs market data

Recruiters have received their second warning in two weeks over doubts about future market conditions.

This time, James Reed of recruitment industry giant Reed has suggested that a wider economic recession would impact recruiters’ fortunes.

The company chairman said that “Worrying storm clouds are forming around the UK’s job market”, citing falling volumes and external factors like Brexit for contributing to tougher trading conditions. The statement, released to the press by the Reed chairman, is likely to draw attention to changing job market trends. The Telegraph described Mr Reed’s comments as a “canary in the coal mine” for the British economy.

In a press statement, Mr Reed cited falling volumes within his own company operations as a bell-weather for the wider economy. Between April and June 2019, Reed’s website saw a 2.3 per cent decline in new job vacancies, compared to 2018. The rate of decline is also the sharpest since 2010.

Perhaps most worrying of all is that the fastest rate of decline came from within one section of the services economy. Catering and hospitality saw a 24 per cent fall in the number of new positions being listed.

Brexit is commonly cited as a main cause for the fall in overseas applications into the hospitality sector. And, while Mr Reed emphasised the part that Brexit has played in the slowdown, he singled out other factors, too. “A fiscal stimulus is required to kick-start the British economy. By providing targeted corporate tax cuts and giving British workers the pay rise they deserve, the economy can be supercharged back from the brink.”

Proposed answers could have negative impact

It is not the first word of caution that the industry has received. eBoss has recently highlighted growing concerns about the future of UK recruitment from several sources. Last week, consultants at BDO recorded a fall in hiring confidence among UK employers.

But while Mr Reed’s words will undoubtedly attract attention due to their high profile nature, his answers may not reap results across the board.

Our recruitment news pages have previously scrutinised the long-term health of the UK jobs market. The idea that a fundamental restructuring of the recruitment sector is underway was brought to the attention of our readers some time ago. In this scenario, we suggested that smaller firms may be better positioned to weather the storm of economic recession that over-extended industry giants.

Were the government to artificially support recruitment giants’ operations with tax incentives, it could stifle SMEs’ opportunities for growth. With SMEs representing the greater overall portion of the UK economy, it may be unwise to favour large firms who have over-reached instead of smaller enterprises that have kept manageable growth aspirations.

Equally, government data appears to show wages are already rising organically, without the need for artificial stimulus, (see this week’s final story).

Mr Reed summarised that – whoever becomes the next prime minister – “Brexit won’t be their only headache. Stimulating the economy to avoid a recession should also be a priority.”

Revealed: what you really want from your recruitment technology

A study of workplace technology usage and requirements provides some unexpected results.

Technology exists for one reason: it is supposed to make life easier. Yet it has a reputation for making matters needlessly complicated. From how to programme a video recorder in the 1980s, to home computing in the 90s and smartphones in 21st century, the familiar joke about consumer tech is that it only makes life more complicated.

It’s a familiar trope, but how true is the myth that we, the general public, are technologically illiterate? A new study of employees tech needs suggests we are all a lot more tech-savvy than perhaps we realise.

Hire Intelligence recently launched a survey to assess the tech needs of the British workplace. This week, it published its findings.

The study looked at several key aspects of the modern, digital workplace. What technology is present in your working environment? How does technology impact productivity? How does tech improve (or otherwise hinder) workplace motivation?

The results were quite revealing about the way we work.

Technology to change the way we work – and live

Is your office hardware fit for purpose? Because 43% of those surveyed said that the computers they used were no longer suitable for a modern working environment. With cloud computing services so prevalent in the modern workplace, an increasing amount of our work is completed online. And, because the web is an ever-evolving environment, our older systems can slow us down. A simple interface update to a commonly-used web page might add seconds onto ever task, if our hardware is not up to the task. And that may explain why 35% say that their own office computers have insufficient processing power and RAM.

But before you rush out to buy a complete set of new equipment for the office, you should consider the 65% of respondents who said that up to a quarter (25%) of all office tech is never actually used.

So perhaps targeted acquisitions of office tech are the answer. But where should business leaders focus their resources? 38 per cent said that a work laptop would significantly improve their work-life balance. Why? 31 per cent also said that they would choose flexibility (variable hours and remote working) over a 3% pay rise. And almost half (48 per cent) believed that investment in office tech would boost productivity and motivation. Perhaps they see a company laptop as a way to achieve flexible working arrangements.

Investment decisions

So, should companies really be spending surplus cash on tech for the office? In some cases, perhaps. For some business leaders, the flat, up-front costs of new technology could be a smart investment. For instance, it could result in better staff retention, and offer a means of controlling wage inflation. This could allow companies to actually save money in the long-term.

However, it should be noted that the majority of workers (66%) would still prefer to spend additional company funds on a pay rise for themselves over new office tech. And almost half said that surplus resources would be best spent on training opportunities for staff.

And it is clear that not all office tech is created equal. Some devices are seen as an unwelcome addition to the workplace.

The tech that most said they could do without was a music device. In fact, there was clear evidence that music in the workplace is seen as a hindrance to productivity and peace of mind. 63% of those surveyed said that they lacked a distraction-free quiet space at work. This interesting little data point shows how even well-meaning intentions can have a detrimental affect to the workplace well-being of staff when their personal requirements are overlooked.

So what does the study tell us about us? It seems that Britain’s workforce is pretty tech-savvy. We understand the benefits of workplace digitisation – and accept that it is an inevitable part of the future of work. It also seems that we want technology that will make a real difference to our effectiveness at work – and our peace of mind away from the office.

If business leaders are able to grasp the importance of efficiency-focused software, and the work-life balance, then they are onto a winning formula.

ONS Jobs market data

Official figures show slight decrease in UK employment.

The Office for National Statistics (ONS) has published its most recent set of jobs market data this week. The figures, which examine employment growth and economic activity between March and May 2019, point to a slight decline for the first time in several years.

Overall UK employment for the quarter stands at 76.0 per cent. The figure represents a 0.4 per cent increase on the same period in 2018. However, it also reflects a net 0.1 per cent decline in overall employment from the previous quarter. It is the first time that consecutive quarters have recorded an overall fall in employment in almost a decade. The last time quarterly employment numbers fell was in August of 2010.

Total economic inactivity fell within the period, too. At present, just 20.9 per cent of the UK population is defined as economically inactive (a classification which includes students not in employment).

It was good news for the government on tackling unemployment, too. The portion of working age adults in the UK currently classed as unemployed is just 3.8 per cent. The figure has not been this low since October 1974.

Data tells story of changing society

However, the data is difficult to compare directly. In 1974, approximately 42.4 per cent of the female working age population was classed as “economically inactive”. For categorisation purposes, home-makers and mothers were classed as inactive in the economy. Therefore, they were not counted towards unemployment figures.

Today, just 25.29 per cent of women are economically inactive. And, with a rise in flexible working arrangements, many new mothers retain their employment status, too. It means that current figures calculate unemployment rates across a much higher proportion of the overall population.
In real terms, then, net unemployment is probably substantially below that of the historic 1974 levels.

Annual wage growth stands at 3.6 per cent in nominal terms for basic pay. Adjusted for inflation, this equates to a regular pay increase for the year of 1.7 per cent.

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