Recruitment consultants are forecasting that more businesses will require their support to source freelancing and contracting professionals in the wake of June’s referendum result. This is due to employers starting to seek flexible staffing solutions in response to economically uncertain times.
The prediction was made by Katie Falwell-Davies, financial advisory partner and lead partner for human capital services at multinational professional services giant Deloitte, which has just released the fourth annual UK Recruitment Index in conjunction with the Association of Professional Companies (APSCo).
The study of 117 recruitment firms found that while 79 per cent saw net fee income (NFI) rise year-on-year in the face of endemic staffing challenges, 24 per cent reported that staff had left their companies within 12 months of starting. This represents a substantial increase on last year’s figure of just 15 per cent.
The survey was conducted just prior to the EU referendum but the data suggests that recruiters were anticipating uncertain economic times and attempting to plan their own growth in such conditions. Many of those polled cited the UK economy and the business environment as the two most significant factors affecting growth.
Speaking to research organisation Staffing Industry Analysts, Falwell-Davies said that the recruitment sector is widely considered one of the best barometers for the wider economy. The latest survey, she said, shows an intriguing image of the talent market today.
The UK jobs market remains buoyant, she observed, but this is in itself generating internal challenges for recruitment consultancies in a context where their own staff “churn” has increased.
This has had an impact on the UK recruitment industry, she added, depressing average fee-earner payment as a percentage of NFI – a sign that higher staff churn has hit productivity.
She went on:
“Greater uncertainty is likely to translate into an increased need for recruitment support, particularly around flexible staffing strategies and contract and interim appointments. Recruitment companies that innovate and convert these changing conditions into business successes are the ones that will ‘ride the waves’ and continue to grow in the long term.”
42 per cent of the participating recruiters said they were concerned about retaining existing talent while 61 per cent said that their main challenge for the coming 12 months would be increasing their headcounts.
Even so, the latest data from the Office for National Statistics shows that the number of recruitment firms in the UK has increased year-on-year by 14 per cent.
APSCo Chief Executive Ann Swain said that many businesses besides recruiters were finding access to talent a key barrier to growth, as evidenced in a recent report by the CIPD.
In such conditions, Umbrella Company employees and other contractors could be about to see significantly increased demand.