How much is the recruitment industry worth in the U.K?
A mainstay in the marketplace, recruitment has played – and continues to play – a vital role in bolstering UK business. But with recent changes and upheaval coming from the global pandemic and disruptive technology, it can be difficult to know where the industry currently stands.
So, how much is the recruitment sector currently worth and how has Covid-19 affected the sector over the last couple of months?
How much is the industry worth currently?
Now more valuable than ever before in its history, the UK recruitment sector is worth £38.9bn, enjoying a record turnover despite long standing global upheaval. While this is an on-the-books valuation, recent changes and issues facing the UK stand to significantly knock that value down in the years ahead.
For the time being, companies are finding themselves inundated with requests to find skilled workers who are able to work remotely – making digital innovation a must for businesses looking to thrive, or survive, in what is set to be a challenging marketplace.
How has the industry changed over time?
While the recruitment industry may have been relatively straightforward in the past, technical innovation has caused disruption for every business and sector.
Many companies are required to cultivate information about clients from online sources, engage in social media advertising, and develop scalable in-house software solutions to compete with their opposition. This has given rise to analysis and database cultivation, allowing practitioners to interact, convert, and allocate employees at a rate that was simply unheard of before.
While many may see the future as being dominated by platforms like AI and algorithms – the truth is that things will simply work in simpatico. Humans can carry out interviews and the intuitive work of sourcing and managing clients, with software taking care of spreadsheet management and number crunching – reducing human error and increasing the efficiency of employees across the board.
With these changes coming into play at the end of the 2010’s, the sector has enjoyed strong growth across the 2008-2018 period. This was accompanied by an significant leap in professionals using social media platforms such as Twitter and LinkedIn to advertise their services. This helped provide additional resources for recruitment agencies to earmark, headhunt, and convert professionals – this led to an average turnover of £27bn per annum across the period, starting from a depressed position that reached a nadir in 09/10 before sharply rising the following year and continuing a strong upward trend.
As we’ve seen, the rise of the tech industry has completely revolutionised the need for staff and the manner in which they are interviewed and employed.
How Has Covid-19 affected the industry?
Unfortunately, Covid-19 has had a significant negative impact on the sector. Governmental policies on lockdown and isolation have impacted the industry, resulting in disruption throughout the market and making it difficult for businesses to plan in the short and long-term.
This has resulted in a significant rise in unemployment and companies being reluctant to take on new hires – with many putting a hold on their recruitment actions in the months ahead.
The key issue is the fact that Covid-19 has now instigated a recession – meaning that an inability to recruit due to lack of capital is doubly affected by the risk of infection and quarantine. This has proven to be massively disruptive as even the most-savvy companies are unable to plan for the future.
However, while sectors that require manual labour, front-facing, or in office roles may struggle – those businesses that allow for remote work have prospered. This includes the tech and finance industries, with many companies following suit as they prep for changes.
While many companies may require an in-house presence for their employees, the ability to work from home and to a high degree of efficiency will likely prove to be a genie that will not willingly return to its bottle.
What situation are we facing in 2020?
While financial forecasts are good for the previous years, the following months are set to be challenging in the extreme for many companies and employers.
However, recruitment companies do stand at an advantage if they follow protocol correctly. Many employers and employees are concerned about in-person interviews, embedding, and training – potentially positioning recruitment agencies as powerful vetting tools for clients.
A key challenge for recruitment companies is making do in a tech adjacent field. With money and time tight, many companies are looking at technical solutions for recruiting – either creating their own pipeline or using an established or hybrid solution to their recruiting tasks to get the job done.
In this environment, businesses that can offer a hybrid approach will prove to be attractive. And it’s those companies that deploy innovative tech platforms to give more oversight to the process that will be able to benefit the most from streamlining the interview process and maximise on client acquisition.
This disruption also raises important questions about recruitment methods being fair, when to drop freezes on non-essential hiring, and putting in place staffing reductions. This means that businesses and recruitment agencies have to be opportunistic but cautious, and do everything they can to support individuals, companies, and the economy in innovative ways in the years ahead.
If you want to adapt to changes in the industry or learn more about how digital solutions can help your business, our team at Practical Software is here to help. With many years’ experience, we understand the importance of providing timely, up-to-date care that allows you to respond to change and pivot your teams to take advantage of opportunities in the sector.