As the nation returns to a semblance of so-called normality, the catastrophic impact of COVID-19 is hitting home with a myriad of data predicting an impending economic meltdown. Despite queues forming outside Primark stores and a significant increase in traffic, the stark reality is that the commercial landscape will bear the scars of the pandemic for years to come and no industry will be immune to the consequences of a three-month lockdown.
With cashflow paralysed in sectors dependent on any form of human intervention or contact, the road to recovery promises to be slow and arduous particularly for those operating in hospitality, retail, entertainment, travel and, perhaps surprisingly, even fintech. Various Government initiatives swiftly introduced to prop-up businesses and to protect jobs are still providing an artificial ‘comfort blanket’ to the true ‘state-of-play’, but the final shakedown is surely approaching.
Despite the predictions of fiscal Armageddon for the recruitment industry, periods of economic flux also offer commercial opportunities for those agile and smart enough to deliver products and services into markets still dependant on a labour workforce. Historically, economic recessions have provided the catalyst for a fertile environment where creative ideas, innovative solutions and new ways of working rise to the fore; one need only look at the explosive growth of video conferencing, online delivery services, digital banks and numerous telecoms companies to realise that the new normal has inspired an unprecedented set of circumstances where fortunes will be made.
These macro socio-economic trends will permeate every strata of society including those entities servicing the rapidly changing recruitment space. Dramatic falls in employment rates vary from 6 to 10% depending on who you believe, and the economy is destined to shrink by a similar percentage according to the latest forecasters. On the face of it, these statistics paint a bleak picture for the industry and its accompanying supply chain, but a sense of positivity can be gleaned for businesses and individuals in the ‘right place at the right time’.
The number of full-time workers paid by PAYE has been on the decline for years, but the pandemic has accelerated the marginalisation of this once ubiquitous model. Proven contractors active in health, pharmaceuticals, construction, tech, media and finance are in high demand and able to negotiate favourable contracts which will add pressure to the terms offered by fee-conscious agencies.
Those workers with an entrepreneurial attitude will develop their own relationships with hirers who are increasingly monitoring the costs and effectiveness of using agencies exclusively. Even those on the much-loathed zero-hours contracts will be mindful of losing a percentage of their income to recruiters and payroll intermediaries, so consultants will need to be fully engaged with their workers and clients to maintain these relationships; quite rightly, complacency will no longer be tolerated.
Read the following article on Forbes.com to find out how COVID-19 has impacted on the American freelance market.
Recruiters will have a significant role to play in re-energising the economy and helping people find work as unemployment figures inevitably rise. The heady days of acute employer demand will banish the ‘stack ‘em high’ mentality of some agencies who focussed on volume rather than quality. Every vacancy, placement and assignment will be treated like proverbial gold dust with owners scrutinising the conversion rates of their teams like never before.
The shift to homeworking and the demise of the flashy office will add further strain to managing these relationships and instilling a pro-active agency culture into remotely located staff. Those organisations that have already embraced data-driven candidate matching, artificial intelligence analysis and situational interviews via virtual reality, are positioned to deliver the exceptional candidate experiences demanded by the new non-contact world.
For those interested in reading more on the subject, please refer to ‘9 Recruitment Trends for 2020’ published pre-pandemic by Change Recruitment Group or read our predictions for how recruiters & payroll companies should have grown in 2020.
For many ‘umbrella’ providers, COVID-19 has been akin to a commercial car crash with almost every company subject to a forensic expose of their respective responses to the pandemic. The validity of the time-honoured mantra that “we are your employer” has been tested to the limit by how umbrella companies reacted to the furlough scheme; hundreds of disgruntled contractors took to social media to vent their disgust upon receiving vastly reduced wages or in some cases, none at all.
The once cossetted Linkedin platform quickly became a battleground where furious workers destroyed many a firm’s compliance credentials and marketing rhetoric. The national media couldn’t wait to add fuel to the fire and exposés on the Moneybox (Radio 4) twisted the knife still further. The fallout continues and those who acted with professionalism and diligence will surely flourish; those that ran to the hills will be forever tarnished and one predicts considerable churn in the market going forward.
Anyone who spent any time in the recruitment industry will no doubt have attended an exhibition, networking event or industry seminar in an attempt to drum up new leads or make a sale. This tactic is now dead for the foreseeable future and businesses are going to have to devise far more sophisticated strategies to find and engage with potential clients. Contributing to Zoom discussions, organising webinars, writing industry blogs and focussing on digital content are the new prerequisites as is maintaining a compelling online brand presence.
Ensuring that businesses are equipped with cloud-enabled platforms, fast internet connections, remote data access and shared apps and web-portals are now as fundamental as having an electricity supply. Contractors now demand a fully functioning payroll app to communicate on the fly with their assignment supply chain, synchronised data is now a necessity in the age of digital tax and transparent pay calculations are no longer a luxury among an increasingly wary contingent workforce. No matter what their function or responsibilities, any company active in the recruitment space, has no option but to embrace the technologies which are now running the industry.
Read this article for more information regarding which sectors will benefit post-pandemic including the Cloud.
Ultimately, the recruitment industry, like many others, will survive and adapt to the somewhat unstable world in which we all find ourselves. Even pre-pandemic, it can be argued that the economy needed a good clear out anyway with thousands of companies propped up by unsustainable levels of debt, financed by blinkered, yet every optimistic venture capitalists and hedge funders drifting along aimlessly in the belief that the flow of money would never end. Well, for some it has already and for others, it is only just beginning. The end of furloughing will prove to be the defining factor as to who survives and who joins the long line going to the wall.
It is going to be brutal for sure and the winners will be those who have adapted already, redefined their proposition’s and placed the customer at the very epicentre of their businesses. If truth be told, this is how it should have been all along. Now, there is simply no option.
To find out more about how Solutio can transform your payroll operation, please contact 0203 819 7970 or email email@example.com to arrange an interactive demo. We welcome enquiries from all entities wishing to streamline their payroll provision including umbrella companies, recruiters and end-clients
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