The past five years have seen the recruitment sector in the UK grow steadily each year. The 2019 market was valued at £38.9 billion. Despite all of the uncertainty surrounding the impact of Brexit, this is an impressive increase. The world economy has been greatly impacted by COVID-19 and although there are numerous admirable government initiatives that have been instituted, like the Coronavirus Job Retention Scheme, has forecasted at £42 billion, with the most recent figures already showing the steepest decline for the marketing recruitment industry since the global economic crash of 2009.
The significantly positive impact of growth within the recruitment sector is reflected in the fact that the UK has reached its lowest unemployment levels since the 1970s. However, the impact has been undone rapidly with March seeing unemployment claims in record-breaking numbers. Universal credit claims saw a 910% increase, and a projected overall increase in unemployment from Q1 2020 at 3.8% up to 10% in Q2, returning to levels that have not been seen since 1993.
Impact on Businesses
The most obvious reality of all of this is that the Hospitality and Leisure sectors have been hardest hit, with lockdown initiatives closing numerous businesses and lowering the chances to continue services. According to research, 46% of employees within the hospitality and leisure sectors are expected to be furloughed, with as many as 11 million individuals across all sectors predicted to be laid off or furloughed over the next couple of months. Although the Leisure industry is leading when it comes to jobs at risk, mining, transport, consumer-focused sectors like retail and potentially recruitment as well, are faced with high risk also.
Although these figures are concerning, it is suggested by public sentiment that it is going to be a short term economic slowdown instead of a full-blown depression. It is suggested by projections that Q2 2020 will see a 35% decline in GDP, with a rapid recovery following in Q3 & Q4, prior to things stabilising at the beginning of 2021. How will the recruitment sector fare in all of this?
A couple of months ago, there were projections for the recruitment sector to have a modest 3-6% year-on-year growth for 2019-2021 while attempting to navigate the challenges that relate to our upcoming exit from the EU. Although it is true we in quite a different position now. However, the businesses that are able to survive and adapt during all of this turmoil will be in a good position to have a competitive advantage in what will likely be a changing employment world.
In the upcoming post-COVID-19 world, recruiters will have a very important role to play. With unemployment rates forecasted to drop to 6.6% by the end of this year, it will mean that the recruitment industry is going to be critical in mobilising the workforce in the UK and also providing much-needed assistance to help clients adjust to the new form of recruiting, from adopting new technologies like virtual on-boarding and video interviewing to embracing remote and flexible workforces.
Recruiters that work in sectors that are experiencing increased demand like life sciences, pharma, and healthcare are most likely to already have needed to make rapid and serious changes to how they work in order to fight against the coronavirus. Over the long term, we are hoping to see those markets continue to grow as the crisis highlights current investment at an underwhelming level, with the focus shifting to healthcare technology advancement and increased staffing levels in the future. The recruitment businesses that have invested in technology, embraced working from home and built an adaptable and solid operational foundation are going to be best positioned to support as well as benefit from this future growth.
The nature of the recruitment and employment sector has changed forever and once the recovery occurs the world will be very different from the one that we have left behind.