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The impact of COVID-19 on employment and the recruitment sector

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By Natasha South, Operations Director for Camino Partners.


The last five years has seen the UK recruitment sector steadily growing each year, with the 2019 market valued at £38.9bn; an impressive increase despite much uncertainty over the impact of Brexit. The COVID-19 crisis has impacted the world economy and whilst there are many admirable government initiatives put into place, such as the Coronavirus Job Retention Scheme, forecasted at a cost of £42bn, the latest figures have already shown the steepest decline in the recruitment industry since the 2009 global economic crash.


Good work swiftly undone

The hugely positive impact of the growth in the recruitment sector has been reflected with the UK reaching the lowest levels of unemployment since the 1970’s. This impact has been swiftly undone as March saw a record breaking number of unemployment claims, with a 910% increase in claims for universal credit and as no surprise, an overall projected increase in unemployment from 3.8% in Q1 2020 to 10% in Q2, back to levels last seen in 1993.


The obvious reality is that the Leisure and Hospitality sectors have been hit the hardest, with lockdown measures closing many businesses and reducing the opportunity to continue services. Research suggests that 46% of employees in leisure and hospitality will be furloughed, with up to 11 million people across all sectors expected to be furloughed or laid off over the next few months. Whilst the Leisure industry leads the way on jobs at risk, transportation, mining, consumer focused sectors such as retail and possibly including recruitment, fall high on the list too. 


A short-term blip, rather than economic depression

Whilst these are concerning figures, the public sentiment suggests that this will be a short term economic slowdown rather than a full blown depression. Projections suggest a 35% decline in GDP for Q2 2020, followed by a rapid recovery for Q3/Q4, before stabilising at the start of 2021. And what does this mean for the recruitment sector? A few months ago, we saw projections of a modest 3-6% year-on-year growth for the recruitment sector for 2019-2021 whilst trying to navigate the challenges associated with our impending exit from the EU. It’s true, we are now in a very different position, but the businesses that adapt and survive this turmoil will be in a position to take competitive advantage in what is likely to be a changing world of employment.


Check out our follow-up blog: Three months on: the impact of COVID-19 on the recruitment sector to see how these predictions turned out.


Recruiters will be more important than ever


Recruiters have a serious part to play in the post COVID-19 world. With unemployment rates forecast to drop to the 6.6% mark by the end of the year, the recruitment industry will be pivotal in not only mobilising the UK workforce again, but also in offering a serious hand in helping clients to adjust to the new nature of recruiting, from the adoption of new technologies such as video interviewing and virtual onboarding, to embracing flexible and remote workforces.


Championing evolution and embracing the new world of work


Recruiters working in sectors that are seeing increased demand such as healthcare, pharma and life sciences are likely to have already had to make serious and rapid changes to the way they work to help support the fight against the virus. Long term, we hope to see these markets expand as the crisis highlights the underwhelming level of current investment, and the focus shifts to advancements in healthcare technology and increasing staffing levels for the future. Those recruitment businesses that have been quick to embrace working from home, have invested in technology and built a solid but adaptable operational foundation will be in the best position to support and benefit from that future growth.


For other sectors, whilst pipelines may have slowed to agonising stops, the adaptability of these businesses will see them through these challenging times. Whether diversifying specialities and digging in where necessary, to embracing virtual interviewing and onboarding or getting creative commercially to support their clients where necessary, these businesses will be best prepared to pick up and increase their market share once lockdown measures ease.


Check out our tips for onboarding remotely


The final extinction


The sad reality is that this represents the end of the line for businesses too slow or resistant to embrace change, and brands that have failed to look after employees during the time of crisis. As we come out of this on the other side with a new found sense of community, clients, candidates and employees will be looking back on the relationships, both business and personal that helped support them through this period of time.


Long story short, brace yourself, the nature of employment and the recruitment sector has changed forever and when the recovery happens it will be in a very different world to the one we left behind.



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