How has COVID-19 affected the recruitment sector?
Coronavirus has dominated the news for the last month, with a seeming ever-increasing negative impact on the business community.
With the NHS struggling, airlines grounded, and the retail sector being decimated – many sectors are struggling with the impact of COVID-19.
Following the introduction of Furlough Leave, loan schemes becoming available and daily updates from the Prime Minister – there could be light at the end of the tunnel.
However, one of the main sectors that has been impacted by the pandemic is the recruitment industry. Business Leader spoke to some of the country’s leading businesses within the recruitment space to find out what has happened, and what the future holds.
Caroline Gleeson, CEO and co-founder of Occupop (CG)
Steve Preston, Managing Director of Heat Recruitment (SP)
Spencer Berry, business development director at Berry Recruitment Group (SB)
David Morel, CEO of Tiger Recruitment (DM)
What impact has the Covid-19 crisis had on the recruitment sector?
CG: The COVID-19 pandemic has had a significant impact on recruitment. The lockdown and isolation policies mean that many businesses have been forced to shut or downsize.
There has been mass layoffs and a significant reduction in working hours across industries like retail and hospitality. As a result, many organisations have put their recruitment on hold until the crisis ends.
For those industries still recruiting, social distancing makes the task more difficult; much of it has to be done online rather than face to face. There are fewer candidates due to the virus, either through sickness or fear of getting sick and, for industries like healthcare, there are added challenges due to urgency as companies try to ramp up staff numbers in preparation for high levels of outbreak.
In recruitment terms, the most affected by the crisis in the sector are probably the recruitment agencies themselves, particularly those that target the most affected industries. Because agencies tend to be very costly compared to the available technical solutions, it may be a significant amount of time before companies start to outsource the process again.
SP: The impact has quite simply been huge, as companies have either put a recruitment freeze in place or shifted start dates.
The strange thing is that unlike the recession of 2008 where people couldn’t recruit due to the lack of funds, this is different as companies and clients want to recruit, they just simply cannot due to the nationwide lockdown.
The unknown entity is the big problem, as to how long will this go on for?
Recruitment is high energy, high stress and high social at the best of times, my concerns surround people’s well-being, so at Heat recruitment, we are making sure that team chats happen and that everyone is being spoken with on a regular basis, so that nobody feels isolated in these days of self-isolation.
SB: COVID-19 has infected the whole economy including the recruitment sector. Between February and March, employer confidence in the economy plunged by 22 percentage points, according to the specially-commissioned COVID-19 REC Jobs outlook survey.
The sector, however, is huge and within it some areas have been hit hard and others have in fact prospered.
The same REC survey showed that short-term demand for temporary workers shot up by 15 percentage points.
And this reflects what we have been seeing throughout the group, which works from nearly 40 locations across England and Wales.
Jobs for some temporary staff including roles in retail, hospitality and leisure simply stopped overnight.
However, other jobs including those in supermarkets, food production, delivery and cleaning became plentiful.
DM: In the short-term, the coronavirus crisis has had a significant impact on the recruitment industry. As a business, we’re seeing far fewer new roles coming through. Between March 2nd and March 20th, we saw a 70% reduction in new permanent jobs briefed to us, and most live roles we’ve been recruiting for have been put on hold. That gives some indication of the extent to which businesses have retrenched.
Of course, there are some sectors still hiring. Businesses whose services are experiencing a surge in demand in the current crisis all have roles to fill. This includes companies in tech and finTech, business restructuring, delivery and logistics, or businesses enabling and supporting remote working and homeschooling.
How do you feel this crisis will affect the recruitment sector in the long-term?
CG: Post-COVID-19, I believe we will see the emergence of a new norm, including significant changes and innovations, plus the introduction of new processes in a historically traditional industry.
Personally, I welcome these changes, as I think it is important for companies to embrace technology when it comes to recruiting. Not only can technology eliminate the need for expensive outsourced services, it helps teams to work quickly and efficiently in a collaborative approach, whether in the office or remote.
Some changes we can definitely expect to see are: much of the interview process moving online; greater utilisation of recruitment technology; a review in employment contracts and employee benefits; availability of flexibility and remote working options; a workforce openly and actively seeking to reskill; more conscientious spending and frugality with regards to recruiting; and a more long-term focus on recruitment strategy and budget.
SP: The recruitment sector is a strong and resilient industry and I believe it will bounce back and bounce back stronger.
Initially, the sector will be leaner with the headcount and numbers working in the sector, especially as a lot of agencies have used this time to reduce their headcount.
I believe the governments Furlough Leave system will protect far more people, than had we not had this in place. The governments release of £330bn to fight COVID-19 will eventually find its way into the day to day economics and movement of monies.
SP: The pressure for us was, and remains, to reassign our legion of brilliant temporary workers from those areas that have closed down to those areas that are creating jobs.
We also recruit key workers in a variety of roles, from the NHS and probation services to prisons, rail and waste.
Clearly the need to fill those roles became uppermost in our list of priorities.
Another area that is creating jobs with more to follow is agriculture. With international workers unable to travel there is a fear that crops will rot in fields and greenhouses.
With regard to recruiting permanent employees, things have become harder with a clear, short-term slow-down across most sectors.
Obviously, it is harder to recruit when employer and candidate are unable to meet first. These practical considerations affect permanent placements just as much as the drop in confidence and uncertainty about the future.
In the long term we will see the industry bounce back because it is enormous – it turns over nearly £50bn a year – and is therefore extremely important to the economy. Of course, nobody knows quite when this will happen.
DM: As for the longer term, it is impossible to say what the impacts will be, but I am working on the basis of a V curve or a flat-bottomed U curve, and expect business to bounce back relatively quickly once the outbreak has ended. This is on the proviso that the lockdown finishes between mid- to late-May.
The Government’s measures, specifically the furlough scheme, will have a significant impact on businesses’ ability to retain their staff. This will make it quicker and easier for companies to return to previous levels of productivity, which can only be a good thing for the recruitment sector.
I think we may also see some long-term impacts in terms of ways of working. Recruitment businesses are currently having to adapt and devise new systems and virtual ways of doing things. As a result, I think as a sector we’ll be much more comfortable with interviewing candidates remotely and onboarding new staff virtually.
In what sectors are you seeing demand for jobs?
CG: Most sectors have been affected negatively by the global pandemic. We have seen huge declines in roles in the hospitality sector for example. But some industries are under severe pressure to grow or in some cases are thriving.
Healthcare and Facilities Services are two industries where we are seeing huge growth in job numbers and demand for candidates.
Food production and supply chain, to a lesser extent, are also growth industries currently seeking out talent.
Interestingly, with all the remote work taking place, the telecoms and utilities industries are thriving with a surge in demand for workers. The demand for these roles is increasing due to the rise in the demand for their services so companies do seem to be hiring quickly in order to fill these spots.
SP: The medical industry is an obvious area, but equally IT roles, especially those working to assist people to set up and work from home.
Government based roles are still there and roles that would have been a remote/home working role irrespective of the impact of COVID-19. I’m pretty sure that at the end of this lockdown hairdressers are going to be in demand, as will the increase on conveyancing as people are allowed to move home and purchase properties