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Challenges and opportunities for the UK recruitment industry

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Ongoing skills shortages, combined with the fallout from Brexit and the introduction of GDPR, has made the start of 2019 challenging for the recruitment industry. And these issues aren’t going away – in fact, they’re only going to evolve over time.

So, how can UK recruiters overcome them? In other words, what is the plan for the future?

Bullhorn’s Global Recruitment Insights and Data (GRID) is based on a survey of more than 2,000 recruitment professionals globally – we asked them to weigh in on these trends and find out what lies ahead for the industry.

Hiring challenges and skills shortages 

Tight talent pools are a big concern for UK recruiters, with more than three quarters (78%) choosing it as one of their top three recruitment challenges for 2019. This, coupled with the fact that research from CIPD has shown that basic pay expectations have risen in the private sector by 0.5% to 2.5%, makes it logical that a similar number (77%) believe employers need to accelerate salary increases in order to attract the best talent. However, this isn’t going to be a viable long term solution for a lot of companies.

With that in mind, the same amount (77%) said that a more productive approach would be to focus on reskilling the workforce. Advising clients on reskilling gives recruitment companies an important way of adding further value for their clients, as part of a more holistic workforce solution.

Continuing the topic of talent, nearly two thirds of our respondents (60%) believe businesses with a more diverse pool of employees are more productive. But the majority (59%) also agree there is an ‘opportunity divide’ between affluent and less privileged talent. The logical conclusion here is that if companies adopted hiring practices that address diversity, they might see an uptick in the amount of talent available to them – and they can help to close the opportunity divide. Those struggling to take a more diverse approach to hiring should consider investing in intelligent CRM and ATS technology that highlights candidates based on relevant qualities and skills, without any prior bias.

Key functionalities in this technology include CV parsing, which allows recruiters to sort through a larger number of applications automatically to quickly identify key qualifications and skills. The ability to streamline the analysis of a large number of applications, as opposed to sifting through them manually, lessens the chances that a decision of who to shortlist will be based on human bias. It also eliminates the problem of simply not having the time to go through all of them, and as a result resorting to only picking from a limited number of candidates.

Operational challenges for recruiters 

Despite the challenges outlined above, the recruiters we spoke to were largely positive about the future of the industry. Only 3% expect a revenue decrease and more than a quarter expect a revenue increase of 25% or more. In addition, nearly two thirds (61%) predict growth with temporary placement contracts, which is evidence of a healthy gig economy.

But most are aware that they need to invest in more technology in order to do so. Nearly all (86%) said that recruitment firms need to embrace digital transformation in all areas of their businesses in order to remain competitive.

As conversations around artificial intelligence (AI) and machine learning accelerate, so too does the recruitment industry’s awareness of its importance. More than two thirds (67%) say that they have at least some understanding of the potential applications of machine learning and AI in recruitment, which is a promising start. It has the potential to transform the industry – as mentioned above, it can help with diversity issues, streamline key operations, and support business development by offering up data-driven insights.

Wider challenges to address 

Much like the rest of the UK, the recruiters we spoke to are uncertain about the impact that Brexit will have. A significant minority towards the negative – just over a third (34%) think Brexit will make it harder to achieve their business goals. Still though, nearly a fifth (19%) said that they don’t think Brexit will impact their ability to grow their business and get new clients. Perhaps unsurprisingly, most are simply unsure either way.

Brexit aside, there are other concerns to take into consideration. The GDPR is a worry for just under a third (32%) of recruiters, as is the tightening of restrictions around the employment of overseas workers, as cited by just under a third of respondents (30%). Having concerns about these issues is sensible – the GDPR has changed the way that all types of business work, while tighter immigration laws are bound to have an impact on recruiters that hire a lot from overseas.

The recruiters we spoke to are naturally concerned about a number of key issues, but are staying positive. If they can find a way to address labour shortages, despite the uncertainty around Brexit, by reskilling people who are looking for a new opportunity or by encouraging more diversity, then they have an opportunity to carve out a new role for themselves as true workforce consultants.




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