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Have you planned for Prime Minister Corbyn?

Have you planned for Prime Minister Corbyn?

05 Jun 09:00 by Natasha South

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It is an undeniable fact that as an industry, recruiters were caught with their proverbial trousers around their ankles the morning after the Brexit vote. You were hard pressed to find a recruitment director or owner who was pro-brexit and equally as hard pressed to find one that thought the UK would eventually vote to leave the EU.

In America our counterparts in the recruitment industry were, by and large, in a similar position with the presidential election. Yet the Clinton victory they thought was coming never did. They got Trump.

And what happened after both of those occasions? The recruitment industry was ill-prepared and had not thought through the consequences.

Fast forward to the general election and every recruitment owner I have met thinks Theresa May and the Conservatives will win. Some think she will win big, others that she will scrape in, but nowhere is anyone discussing a Corbyn win with any level of seriousness.

But the polls are narrowing.

So what happens on June the 9th if we wake up to Prime Minister Corbyn, or even a so called “progressive alliance” of Labour, SNP and other minority parties?

The predictions from many commentators are that sterling will take a hit and the pound will fall. Markets would go into turmoil. For how long is uncertain. That means many things for many people. But it seldom signals an increase in immediate hiring activity. And as we have seen in the past – if the city is hit then this percolates down into recruitment across the board, whether directly or indirectly.

And let’s be honest, Corbyn’s speech in January of this year drew widespread criticism from across the spectrum, with APSCo’s Operations Director Samantha Hurley commenting “The recruitment profession’s ability to attract and supply professional talent continues to contribute to the success of UK plc, and such sweeping comments are misrepresentative of the important role of the profession.” Whilst the REC’s CEO Kevin Green went even further asserting that “Jeremy Corbyn’s attempt to re-imagine himself as the UK’s Donald Trump appears to include the original’s loose relationship with the truth.” Corbyn is not seen as a friend to the recruitment industry.

And then recruiters will suddenly start to look deeper into the Labour manifesto and the things Corbyn has said in the past. There will be concern at the radical departure from the status quo:

  • All workers will be given equal rights from their first day of employment.
  • The abolition of what Labour see as a loophole to the Agency Workers Regulations 2010, i.e. the Swedish derogation model.
  • There would be a ban on zero hours contracts, guaranteeing every worker a minimum number of paid hours.
  • The law would be changed so that at those who work short hours for more than 12 weeks on a regular basis will have the right to a regular contract which reflects those hours.
  • There would be extra bank holidays.
  • The minimum wage will rise to the level of the Living Wage for everyone over the age of 18. This is expected to be at least £10 per hour by 2020.
  • The use of Agency staff within the NHS will be drastically cut.
  • Transferring the burden of proof, so that the law assumes a worker is an employee unless the employer can prove otherwise.
  • The abolition of payroll companies/umbrellas.
  • Enshrining into law that employment agencies and end-users have joint responsibility in ensuring that the rights of agency workers are enforced.
  • Increasing corporation tax to 26% from the current level of 19%.

This will cause concern, not because it is a good thing or a bad thing – I will leave the politics out of it. But the concern will be how does this affect the recruitment industry. And more importantly how does it affect recruitment levels in the short term.

Companies will grapple with this for months to come and there is a danger the industry could become paralysed by inertia. With some recognising that there was (and in some cases remains) a post-Brexit slump to their individual businesses, is it prudent to predict the same would follow a Labour victory?

So surely the most sensible thing for businesses to do is to stop and reflect now. With a week to go you need to think about what your plan will be for a Corbyn government on day one, month one and year one. How will the recruitment industry react and how will the markets you serve react? How will you manage your internal message and how will the external message you put out be used to mitigate any collapse in demand? Will it be business as usual or will immediate action need to be taken to mitigate any of this? Of course it may well be that you predict a positive bounce; you may feel confident that your business can benefit. If that is the case, what plan do you have in place to ensure you capitalise on it?

We want to avoid any mass hysteria. A Corbyn government isn’t going to signal a new apocalypse. I confidently predict that we won’t be stood in ¼ mile queues outside of Greggs waiting to pay £375 for a loaf of bread. There are of course some things in the manifesto that recruitment companies will like (ensuring the flow of skilled migrants for example). At over £35billion this is not a small industry and with representation from REC, APSCo, ARC and IoR, it is not guaranteed that any laws would be enacted in as harsh a way as they may appear on paper. And there are other policies around social justice that many recruiters may feel is a trade off worth paying.

I make no comment and take no view about Jeremy Corbyn in this article. People vote for who they want based on numerous factors. 

But as someone who is passionate about improving the recruitment sector, I find it astonishing that many recruiters have simply not thought through the possibility of Labour winning the general election. Your reaction as a business to both the external and internal stakeholders could impact on your future success. Surely that is worth planning for?