Top 10 Predictions for the UK Recruitment Industry during 2017

When you consider what 2016 brought, it is difficult to accurately predict what 2017 will bring. But our MD, Sachin Ruparelia, is going to put his neck on the line and take us through his predictions as to what the biggest trends to affect the recruitment industry during 2017 will be.

Nobody knows what the effects of Brexit will be; positive or negative.  Other than knowing that Brexit means Brexit we have very little information.  Add into the mix the election of Donald Trump as the next US President, and it is clear to see that the geopolitical and economic outlooks are less clear than they have been for a while.  Uncertainty always feeds itself into recruitment and the industry is aware of the lack of visibility over how 2017 will look.

Perhaps the biggest role for recruiters during 2017 is the need for them to work hard to dispel the falsehoods and anxieties about these, in order to limit the impact and continue to drive business.

Talent acquisition at board level

The trend of having a talent acquisition specialist at Board level has been a consistent feature of lists like this since the recession hit.   One of the consequences of some of the changes that feature below is that many more organisations will be putting workforce planning on the agenda and therefore promoting talent acquisition specialists to the highest table possible.

The opportunities for the recruitment industry from this are obvious.

Employer Branding as a strategy

Linked to talent acquisition at board level, many more companies are beginning to start seriously thinking more strategically about their employer brand.  It is no longer something the marketing and HR departments consider in isolation but is finally an area that occupies time at board level.

This has a twofold impact on the industry.  Firstly, as an industry itself, recruitment will be looking to hire new people.  We have already seen a significant increase in “training academies” and growing your own talent, and this is likely to continue.  However, what we also see is a fight for good recruitment consultants as recruitment businesses redouble their efforts to hire experienced recruiters.

On the flip side, stronger employer branding could challenge the recruitment industry, as clients become better at marketing themselves and therefore may feel they need recruiters less.  Of course, the counter-argument to this is simply that whilst requirements may not change, it may become easier for recruiters to sell opportunities with good employer brands to their candidates.

The living wage

The national living wage for employees aged 25 and over will increase to £7.50 from April 2017, together with other increases to the National Minimum Wage rates.

Those agencies who recruit at the lower end of the salary scale need to embark on an information exercise. This could mean a reduction in the use of temporary hiring, although it is more likely to mean that clients will have more specific demands around temporary worker management and workforce rostering efficiency which recruiters need to react to and support.

Salary rises

Wages and salaries are predicted to rise at a higher rate this year, especially with the rise in the living and minimum wage. The impact on fees where recruiters have fixed percentage rates is obvious and encouraging for the industry.

The Apprenticeship Levy

From April 2017, the government will change the way apprenticeships are funded by introducing an ‘Apprenticeship Levy.’ Employers with a wage bill of £3 million or more will be required to spend 0.5 per cent of the total on the new levy.

This levy will directly affect some of the medium and most of the large recruiters within the industry.

The effects on the recruitment industry from clients is uncertain. If clients look to offset their expenditure or replace permanent jobs with apprentices, then there could be an impact on both temporary and permanent hiring.  It is however hoped that the way the scheme has been introduced, following consultations with the recruitment industry, will mean the industry sees minimal impact.

There is also the potential for the development of new businesses or divisions to service the apprenticeship market. Companies such as Staffline are very optimistic about the potential to grab a share of the Apprenticeship Levy spend.

Gender Pay Gap reporting regulations

From April 2017, any business with more than 250 employees will have 12 months to calculate and publish the pay gap between male and female employees.

This will not just affect clients, but a significant number of recruitment agencies will be required to report on this too.

The effect of this legislation on hiring, or perhaps, more importantly, salary levels to offset any discrepancies, is less certain. It is, however, an area that needs to be considered and monitored as it may begin to impact the industry.

Generation Z enters the workplace

Beyond making us all feel a little bit older, 2017 will be the time when a generation who have grown up with technology embedded into their lives becomes a permanent fixture within the workplace.

This presents the recruitment industry, who have yet to fully grasp technological advancement, with several challenges, but also tremendous opportunity.

The industry will also need to work hard to ensure that any age discrimination (both conscious but more likely unconscious) at either end of the age scale is not allowed to permeate into the working practices or hiring intentions of ourselves or our clients.

Social Media

The perennial entry onto this list is always social media.  Yet it continues to be an area that is incredibly important.  2017 is set to be the year that social media moves away from being the responsibility of the marketing department or the enthusiastic (and often young) recruitment consultant in the corner to becoming embedded in day to day recruiting practices for everybody.

Data protection

Even though we are leaving the EU, some people have failed to realise that the UK will be bound by the new EU Data Protection legislation.  Whilst the final version of the General Data Protection Regulation (GDPR) legislation is set to be implemented in 2018, recruitment organisations will be looking to define their data strategies and begin to train their people over 2017.

Currency Uncertainties

With wildly fluctuating exchange rates on the back of changing economic and political realities, any recruiter operating internationally will need to keep a close eye on exchange rates to ensure that they are not wrong-footed by sudden, unexpected movements. Effective hedging and risk management will be key tasks for the finance function.

2017 is shaping up to be an interesting and potentially uncertain year.  However, what the trends and our predictions all point to is that 2017 is also a year when processes and procedures within the recruitment industry need to be embedded.  The support services or back offices of recruitment businesses are now more critical than at any other time over the past few years.  If recruiters want to position themselves to not just survive, but benefit from the challenges and opportunities 2017 presents, a strong, commercially focussed back-office infrastructure is essential.  Alongside strong leadership, this will give the frontline recruiters opportunities to drive business and grow the industry further.