With many companies starting to look forward and beginning to put plans in place to adjust to life after Covid-19, Managing Director of Venatu Recruitment Group, Ian Horsman, gives his opinion on leaner workforces, diversifying markets, greater flexibility and the bounce back for the recruitment industry…
What is your opinion on furlough and the impact you think it will have on the recruitment industry?
I think furlough has been a lifeline for numerous individuals and companies where it has allowed them to cover bills and maintain a level of financial stability. However, recruitment is a pipeline and sales driven environment, and we are already seeing fallout as a direct result of the restrictions imposed upon furloughed staff.
From the minute a consultant is furloughed, their desk effectively becomes dormant. When the time comes that everyone receives the go-ahead to return to work, these consultants will be completely unaware of what has been going on with their clients and their pipeline, which in many cases they will have spent years working on.
Furthermore, clients will be looking to keep spending down and focus on critical hires for a period of time. It could take 3, 4, or even 6 months to start generating real cash flow again. It is therefore unrealistic to assume businesses (who will likely already had to make some difficult decisions and necessary adjustments to make it through these challenging times) could bring their entire team back in bulk.
How do you think headcount in recruitment companies will be affected once the furlough period ends?
I believe we will see leaner workforces within many recruitment businesses as owners and Managing Directors have no option but to review their cost base versus projected income and balance the headcount accordingly. Without any kind of grace period or ‘return to work’ support, which is unlikely, furlough may only delay inevitable redundancies and not achieve what the Government set out to do (reducing mass unemployment).
I think those new into recruitment or who have only just joined a business will suffer. It comes as no surprise that we are hearing of employees on probation or PIP’s already being let go. Recruitment companies will rely on a core team of their proven recruiters, along with a reduction in senior management structures.
How long do you think it will take for industries to resume their recruitment plans?
I think the first 3 months after lockdown will see incredibly tough markets across the board.
Markets which are experiencing an unusual boom right now (food, transport, distribution, medical etc.) will plateau. These sectors, which will have been sustaining the flow of revenue to compensate for other business areas that have taken a hit, will potentially experience a delay in redundancies or at a minimum, will require less temporary and contract workers as they resume normal levels of activity.
Businesses may also see uncertainty from the fear of a 2nd wave, which will further impact the permanent market but possibly see growth within temporary and contract sectors.
How do you think recruitment agencies will adapt their services?
I believe we will see recruitment businesses try to diversify into markets that have been less affected or even sustained growth as a result of the pandemic. Businesses will be doing their best to mirror these changes and quickly adapt their offerings. Essentially, many businesses will be trying to get quick wins.
We may see margin erosion if supply outweighs demand and clients have far more choice of available candidates on the market. Clients will be seeking guidance from those they can rely on – it will be more important than ever for consultants to step up as trusted advisors and demonstrate why they are true specialists in their areas.
Do you think the way many recruitment companies do their ‘day to day’ business will change forever, as a result of social distancing and preventative measures?
I think we will see a huge stride forward with recruitment agencies using technology to deliver service. Whilst a lot of forward-thinking agencies have already been utilising video interviewing and virtual client meetings for some time, a vast proportion of the industry still prefer traditional methods: face to face candidate registrations and client meetings, telephone sales calls, office-based staff etc.
Post-pandemic, I believe we will see a large amount of these agencies embrace technology and a more modern working environment for clients, candidates and consultants. Video technology, greater flexibility to work from home and using the latest digital marketing tools to increase their presence on social media platforms will all be key. I believe we must embrace these changes and adapt them to ensure a sustainable working solution for our teams and businesses.
There is no doubt the global economy will suffer for some time as a result of this, how do you think this looks for the recruitment industry?
It is a given we will find ourselves in a deep recession. I think will see the first signs of the UK economy recovering in Quarter 4, so January 2021. This could mean a steep fall followed by a sharp rise (imagine a U shape graph) meaning the bounce-back could be quite fast, relatively speaking. It will be imperative that recruitment businesses get the timing right to ensure their skill and headcount is ready to service client needs when this happens.
The companies who will come out of this eventually stronger than before will be the ones who have remained consistent, active and present during this time, using the opportunity to strengthen existing relationships and start building new ones. Those who listened, researched and advised will be the ones who are remembered when the time comes that clients are ready to spend again.
Posted: 27 April 2020
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