Navigating Brexit: UK recruitment
onrec asked Jeremy Furniss, for his thoughts on how Brexit is impacting the Recruitment sector.
It seems barely a day goes by without the impact of Brexit on the UK economy hitting the news. The impact of Brexit isn't being felt equally. Housebuilders, travel companies and airlines have also fared poorly. In contrast, defensive support services businesses, exporters, commodity players and companies with dollar-denominated revenues have bounced back strongly.
This leaves a complicated picture for recruiters to make sense of and requires an understanding of the key moving pieces in the Brexit jigsaw.
In a report to the Commons in February 2015, it was reported that the finance sector contributes 75% of the UK services trade balance, 11% of tax receipts and 1.1 million jobs (or 3.4% of the UK total). Before the referendum, JPMorgan, HSBC, Morgan Stanley, Goldman Sachs, Citigroup and Deutsche all publicly stated they would relocate employees in the wake of a Brexit vote. JPMorgan alone quoted at least 4,000 would be moved to the continent.
In September a report from the CBI showed that the proportion of asset management firms considering hiring over the next three months has slowed to 11 per cent, down from 68 per cent in March. The August Manpower Employment Outlook Survey reported employers were less optimistic about adding jobs especially in financial services, construction and utilities, and in its half year results, SThree attributed the underperformance of its UK business in Q3 to a slow-down of hiring in the banking and financial markets.
And yet, as stock markets recover, recruiters have cause for optimism. August's Recruitment & Employment Confederation's JobsOutlook survey shows 24% of employers will take on more permanent staff in the next three months and 64% said they would maintain their existing headcount. In August, for the first time in 2016, 7% of small firms have reported an increase in headcount.
Clearly the impact of Brexit is not being felt evenly. Underlying trends in the UK market persevere. There is still a critical shortage of teachers with 73% of LEA's complaining there are too few candidates, though recruiters to the UK manufacturing sector are performing well, bouyed by a weakening pound. Recruitment in this sector, especially in short term placements, continues to grow.
It is likely the successful recruitment agencies will be the ones focusing on the sectors and clients who are able to disentangle the many opportunities and who are brave enough to go after them.