Financial pressurePwC research conducted prior to the referendum forecast Brexit’s hit to UK’s GDP. The report showed that, should the UK vote to leave by 2020, GDP would drop between 3 and 5.5% lower than if the country had voted to remain. If this estimate becomes a reality, business expenditure will slow down and recruitment budgets will lessen. Recruiters may have to adjust strategies and methods to remain relevant and affordable in these new economic circumstances. A fluctuating pound is a clear indicator of changing economic conditions. The pound fell from 1.5 to 1.21 against the dollar on the back of the referendum results. While it has gained some ground, exports aren’t bringing in as much, and imports are generally costing more. If the pound continues to drop, cost-cutting will be necessary for every business. With less money to allocate to recruitment needs, there will be less appetite to hire. Firms need to protect themselves as best as they can in case the outcome of Brexit proves especially damaging.
Skills shortageWhatever its final outcome, Brexit has triggered an impending workforce crisis. British businesses won’t have access to the skills and talent they have grown accustomed to and demand for labour will outstrip supply. For the first time in half a century, the number of workers entering the UK job market is falling behind population growth figures. Last decade, almost 2 million people entered employment – this compared to a projected 820,000 people joining the workforce in 2025. Declining birth rates and emigrating graduates are potential contributing factors. However, up to 47% of highly-skilled EU citizens currently living and working in the UK are looking to leave within the next five years. Top talent is highly mobile and won’t be at a loss for options. Rather than focus recruitment efforts on external hires, firms need to take a creative approach to how they find and place talent. Technology can help recruiters identify candidate referral and redeployment opportunities. As budgets get tighter, now is a perfect time for firms to review their existing candidate databases and review opportunities for upskilling and reskilling.
Looking aheadThe current UK job market is in flux. As economic uncertainty peaks, hiring budgets and available talent are taking a knock and recruiters are under immense pressure to help their clients find and retain the talent they need. To combat this, recruiters need to increasingly encourage candidates and clients to step out of their comfort zones to find the jobs and skills they’re looking for. By stepping into an advisory role that goes above and beyond job placement, recruitment companies can stay competitive and profitable. Looking beyond 2018, the key for recruiters is to get closer to their clients than ever before. Uncertain times present opportunities too, but smart and fast adjustment is crucial to withstand change. Peter Linas is EVP of corporate development and international at Bullhorn.
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