The recruitment industry has taken a kicking. In 2007 it was worth £27 billion. By 2009 it had dropped by a third. Not surprising that recruiters get nervous, even though since that period it has now levelled out at £28 billion.
That increase is expected to continue but we can’t be complacent. We will be struggling with the major trends in recruitment in 2015:
1. Mobile phone technology moving jobs from one sector to another. Just as online retail decimated the high street we can expect mobile phone technology (apps) in 2015 to result in job losses. We know how the banking industry has been affected. Closing banks in small towns has caused an outcry but the fact is so many people do their banking online.
Even my mum (who is in her seventies) is now a convert. As the ‘technology reluctants’ become converts we can expect to be able to do more jobs on our mobiles and this will affect jobs in many sectors – destroying and creating roles at an ever faster rate.
2. A crisis in skilled staff in manufacturing, particularly those with skills in the energy sector. I know we’ve been complaining about this for years but I think it will come to a head in 2015. We have to build new power stations or we will run out of energy, but we simply don’t have enough skills in the UK any more so we will have to import them. We’ll be struggling to do this at the same time as the major political parties are looking to cut down on immigration.
To help our clients we will need to persuade them to move away from often very fixed ideas about what a candidate should be, and how they should work. Recruiting for these hard to fill posts will not just be about offering the right salaries. Companies will also need to offer the best terms, which is likely to include flexible working.
3. A refocussing of the recruitment industry. Recruiters will need to examine their businesses and decide which direction to pitch their tent. By the end of 2015 we should all be on one of three business models.
Low Cost Providers: This is where the margins for recruiters have been reduced and that is unlikely to change. If a business is looking to hire staff on minimum wage – think catering jobs and cleaners – the roles are often for temporary contracts and they are going to be unwilling to pay a mark up of more than eight percent. In fact I have even heard of some recruiters having only a 3% uplift.
Of course this is doable when you are finding large numbers of people and these sort of unskilled jobs do tend to be heavy in terms of volume. The turnover can often be high so that needs to be factored into contracts. What systems are you going to use to make delivery possible and targets achievable?
Niche Providers: When I talk about niche I mean niche…one centimetre wide and a kilometre deep. For example, a client may only want to recruit someone who advises on Cyber Security at ‘C’ Level into the finance industry, and they have to have a background from a known security practice. The recruitment agencies that can provide this skill tend to be well known, well networked and thought leaders in their field. As a recruiter you could expect a better margin – in excess of 20%.
However, you will need to know your market and of course the competition is going to be fierce. Companies will pay good money for the right person, and this has to be the right person. With skills shortages these people will not be easy to find so you will need to operate in the truest sense as a Recruitment Consultant.
Traditional Recruiters: The FTSE 100 companies are now using in-house recruitment teams or Recruitment Outsourcing Providers or a combination of both. These teams deliver on the bulk of the mainstream resourcing requirements. They will often use low cost providers and niche agencies to supplement their delivery. As a result, the traditional recruiters are turning to the SME market and working with them in their local or specialist area to fill vacant posts.
The SME market as defined by companies with an annual turnover of up to £50 million and a maximum staff of 250 people is sizable and will remain very buoyant. The old adage of 80% of your business coming from 20% of your clients will still hold true. This middle ground can and will continue to provide a steady source of income although over time a large section of this market will go the same way as the FTSE 100s.
I’m sure the year will throw up a few more surprises but thinking ahead is a must for recruiters.
