What lies in store for the recruitment industry post-Brexit?

Jonathan Munnery

Partner

3 Minutes to read

Home
Insights
Articles
What lies in store for the recruitment industry post-Brexit?

Updated: 10th March 2020

Sector Insight: Recruitment

Over three years on from the Brexit referendum vote negotiations are still ongoing, and with a general election now on the horizon, more upheaval is likely to be on the cards. The unpredictable twists and turns have made it extremely difficult for businesses to plan for the future and commit to making major financial and operational decisions, including hiring and expansion plans.

As no one quite knows how the land will lie following Britain’s exit from the EU, many businesses are holding off making major commitments until the position is clearer.

Why Recruitment is Particularly Vulnerable

While Brexit uncertainty is affecting a huge number of industries, those working within the recruitment sector are finding themselves being hit particularly hard. The issue is that the very nature of recruitment means that the industry itself touches a wide variety of other sectors by way of the jobs they are looking to place. As a simplified example, if the hospitality sector is struggling, this can have a knock on effect on recruitment agencies looking to place chefs, wait staff, and cleaners.

UK’s Desirability Taking a Hit

The UK is arguably a less attractive place for EU nationals to come and work at the moment, exemplified by a 95% year-on-year decline in the number of EU-born workers coming to the UK according to stats from The Adecco Group. This decline leads to a reduction in the number of individuals actively seeking employment opportunities throughout the country, shrinking the talent pool for those companies looking to recruit. The prospect of available overseas talent drying up could have serious ramifications for an industry which relies on talented individuals seeking a new opportunity.

The UK has become increasingly reliant on an influx of both skilled and unskilled labour from the continent, helping to fill vacancies in a variety of sectors including healthcare, hospitality, and agriculture. With this once reliable stream of talent now drying up, the pressure is on both employers and recruiters to fill vacant positions.

Decline in Candidates

As Brexit negotiations progress, some recruiters have reported a decreasing number of international candidates seeking jobs in the UK. One particular study conducted on LinkedIn, quizzed recruitment agencies on a range of issues and the drop of job hunters from the EU was highlighted: 37% noticed a decrease in demand from Italy, a 35% drop from France and Germany, with demand also declining from the Netherlands (32%), Spain (29%) as well as a 33% decline from other EU countries.

A Silver Lining for Recruiters

However, the news is not all bad for recruitment agencies. With less choice available, companies will be even more keen to ensure they attract the right staff and more willing to offer a more attractive remuneration package; this would in turn make switching jobs a more attractive proposition for workers feeling unsettled or unfulfilled in their current role. With the stakes on each hire higher, enlisting the help of specialist recruiters becomes a must, rather than a desirable, when a company is looking to expand their workforce and access the skills their business needs to progress.

Even for less skilled positions, finding a suitable candidate is going to be more challenging, leading to greater demand for the service of recruitment agencies in response. More businesses are likely to turn towards the services of experienced recruiters to help with these vacancies which may previously have been filled through less formal means such as word of mouth, internal referral schemes, or online or social media channels.

In a challenging recruitment landscape, the need for skilled recruiters will be needed more than ever. The focus will also be on recruiters themselves to devise innovative and more diverse strategies when placing candidates. With a shrinking talent pool, recruiters need to ensure they are utilising the skills of their candidates and ensuring these are maximised to their fullest. This means looking beyond the obvious and encouraging candidates to consider related roles they may not necessarily be in the market for. Recruiters could also consider advising candidates on potential opportunities for upskilling either through training, study, or additional work experience.