Category Archives: recruitment agencies

The UK job market outlook for 2012 is already looking grim with the report from the Chartered Institute of Personnel and Development (CIPD) stating 210,000 more people will be unemployed.

The main problem has been that much hope was put on the Private Sector offsetting the job losses in the Public Sector. The reality is that this has not been the case with much of the Private Sector apprehensive of there respective markets and so cautious with adding new workers. We should also not forget that the drop in the predicted growth in the UK for 2012, which now stands at an expected 0.4%, I believe this figure used to be around the 2% mark at one point.

The bad news does not stop there though, with the CIPD predicting that unemployment will keep rising to 2.9m by 2013 and entry level jobs being the most affected.

John Salt from Total Jobs also stated that there was a “deep structural problem” in the British labour market, as even specialist industries such as Engineering are struggling to recruit due to a skills gap.

The signs ahead are of course a concern and it will be a telling year of how our overall the economy will span out over the next 5 to 10 years, what is clear is that recruitment agencies will have to do a lot of ground work to get the jobs in and I can imagine these agencies will almost be falling over each other to fill these vacancies.

Recruitment agencies based inScotlandwere concerned as the Job market is losing momentum.

The Bank of Scotland said that although they had a rise in permanent staff for the 14^th month running this was at its lowest rate and on temporary staff it showed its first decline in over 2 years. The index used to gauge employment figures slipped to 51.4 from 53.9 (above 50 is a positive trend).

The other news coming out of Scotland is unemployment rate which showed for the first time a higher proportion of unemployed compared to the whole of UK. Scotland jobless rate is now set at 8.5% compared to the UK which is at 8.3%.

Reports such as these have meant First Minister Alex Salmond wants an urgent UK-wide jobs summit, with Salmond seemingly unable to defend his economic policies with as such conviction as previous months, previously able to point to Scotlands declining unemployment figures and having a positive effect of the jobless market figures. This now seems not to be the case and serious discussions need to happen to ensure the UK does all it can to try and come out of this recession.

Recruitment agencies in Edinburgh have recorded higher permanent placements and recruitment agencies in Aberdeen have been showing an increase in temporary staffing but overall the market is struggling and so a closer look at economic policies is needed to try and encourage any growth possible.

Recruitment agencies are preparing for a rough year as financial forecasters believeBritain’s economy will suffer next year, reducing by 1.3%. The news gets no better when referring to the Eurozone which they have predicted will reduce by 1.5%.

Economic problems have arisen in a number of EU countries and the Chancellor George Osborne has admitted if the rest of Europe slips back into recession it will be difficult for the UK to avoid. An even worst scenario would be the dismantlement of the single currency.

There was also talk by the Organisation of Economic Co-operation & Development (OECD) that the Bank of England will have another bout of quantitative easing to the amount of £125 billion, however there are also some reservations that we can not keep coming to this solution.

The job market in general is becoming very tight with many employers seemingly aware of the future uncertainty. Therefore they have either stopped recruiting all together or just hiring sporadically till the market becomes clearer. My view is that the Recruitment agencies will have to depend on strong employer relationships to ensure that they get any jobs out there but how tough the market will be, will very much depend on a number of economic factors.

George Osborne is set to announce The National Infrastructure Plan, a plan that will please many recruitment agencies by creating more jobs around the country.

The money for these projects will come from the British pension fund, as well as Chinese investment and £5bn will be from further public cuts. The total earmarked for this project is £30bn over the course of the next few years.

The aim will be to improve various roads and rail lines, build a Transpenine Express line between Leeds andManchester, a metro system inNewcastleplus many other projects. No doubt this will help the employment rate which is currently at its worst for 17 years.

The main aspect from this initiative is the fact the fund will mainly come from the British pension plan, previously this was considered locked funding and so unusable to the government but see other economies use this funding effectively has allowed our own government to analyse the potential of having access to this fund.

I see this initiative as a positive, it is obvious our economy needs an uplift and although this won’t have a huge impact on the bigger picture it is definitely in my eyes a step in the right direction.

A report from the Chartered Institute of Personnel and Development (CIPD) would have made uncomfortable reading for many recruitment agencies, with the prediction of job market worsening as the global economy seems to be dipping again.

The report which is based on survey completed by 1,000 employers found that many were very unsure about what the future holds and so have adopted a `wait and see` policy. This implies an almost stagnate scenario where there are positives and negatives. The positives are simply less redundancies and less like to move outside the UK, the negatives are of course reduced recruitment and further rises in unemployment.

The government were asked to temporarily halt their public spending cuts as this was only further increasing the job cuts in this sector but there rebuttal to this was that they could not sway from there original plan as it would only cause more problems in the future and that according to the OBR forecast the number of jobs in the private sector would substantially outweigh the public sector cuts by 2015.

In my view I think the reports of this report was inevitable, we are in the midst of massive uncertainty. We have no idea which way the Euro will go, one day we have Greece claiming it will hold a referendum the next day it is not, then Italy’s turn of uncertainty. It is therefore just too difficult for companies to have a clear vision.

With much of the employment law changes recently, its no wonder many recruitment agencies are backing the Tory backbenches that have defied the Government by voting for a referendum on Europe. There intention is simple to give the UK government back its power.

The problem exists because EU social law is now costing the UK around £9 billion. This is due to all the cumbersome regulation that now exists these include things like working time directive, the agency workers directive and the fixed-term employees’ regulations. The Tory backbenches otherwise known as Open Europe believe that repatriate powers back to Westminster will in fact create a £15 billion boost to GDP and potentially create 140,000 jobs.

These estimates are quite astounding and it is when you hear that there argument is not that they do not agree with a single market, Open Europe in fact encourages this for British businesses but it is this one-size-fits-all approach in EU social law that they feel does not allow the government enough control in giving the British public the best opportunity in getting jobs and growing the economy.

My view is that I whole heartedly agree with Open Europe. I know many recruitment agencies have not appreciated the extra red tape and legislation that exist through AWD. It seems that whilst one social law might be right for one country it does not necessary make it right for the other, so for everyone to be shackled by these laws seems too restricting when trying to grow an economy. It seems to me as with many things the EU tries to do, that it is all very well when we are in a booming economy, we can do these changes and try to work more closely together but in the times we are in, it just seems ludicrous to insist on these employment law changes.

Morrisons are having discussions with recruitment agencies about using a loophole to get-out of the new Agency Workers Regulations (AWR).

The AWR was created so that temps get the same rights as permanent members after the temp has been at the same employer for 12 weeks or more. This has forced some employers to look at legitimate routes to waive these rights.

One such option is called the “Swedish derogation”, which basically means the temps are hired directly by the employer and therefore no longer classed as agency worker and so therefore not covered by this new ruling. This of course brings other discrepancies but shows how high usage employers of temps are trying to think outside the box to cope with the new AWR. The end result though will be that these employers will ultimately try to find ways to reduce temp requirements, which is a negative point to recruitment agencies who have built sound business models to supply a service to these employers.

I do think that this is a case of everyone trying to find their feet. It was obvious that these new regulations were going to cause massive disruption but the end result is that this rule exists and recruitment agencies have to work towards it. I also don’t think it is a surprise now that many employers are coming up with starter salary packages to make their comparable as much in their favour as possible.

Recruitment agencies are preparing themselves for a tough year ahead with `The centre for Economics and research` stating that the economy will be at a virtual standstill next year.

With the Euro zone crisis now worsening and the global economy weakening. The worry is that there will be little investment into the UK economy and with other European countries possibly looking for bails outs such as Spain and Portugal, UK taxpayers will have to help out with these bailout packages.

The Bank of England has recently helped with quantity easing by providing a £75 billion injection, however many see this as delaying the inevitable a double dip recession. There have been calls to reduce interest rates further from 0.5% to 0.25% but even if this does not happen, it is probably safe to say interest rates will not increase before mid 2013.

Finance ministers from across the G20 will be in Paris this weekend discussing the euro zone crisis. There have been noises of a continent-wide rescue package worth up to two trillion Euros.

I have to say that I am quite worried about the coming few years, almost a make or break scenario for many countries and the Euro as a whole. With news China’s economy is also on the decrease, it seems that this will have a negative effect on the Global economy and it is very difficult to see where this is all heading towards….

The monthly report by the REC and KPMG would have concerned recruitment agencies as their results showed that the number of vacancies grew by its slowest rate since August 2009.

Bernard Brown from KPMG said that it is only a matter of time before the job market starts to contract. With many employers now cautious over the uk and global economic outlook it is unsurprising that they have taken this approach. It is also quite apparent that there are not enough private jobs being created to combat the amount of job loses in the public sector, one of the hopeful predictions the government made.

The signs point to a higher unemployment figure and without government intervention it seems that the situation could get worst. Medical staffing showed a decline in placements, Accounting staffing was steady and the strongest demand was in Engineering staffing.

The only positive we can look at is at least it was still an increase in vacancies but how much longer this will be the case, only time will tell.

Recruitment agencies are looking at ways of legitimately getting round the new Agency Workers Regulations that stipulates that any temp supplied will have the same benefits as a permanent member of Staff after 12 weeks.

Randstad recently took the view that in some cases they will follow the “Swedish derogation” model. This is a proven model that basically means the recruitment agency takes on the agency worker as a permanent member of staff and would therefore have to carry on paying them in times of now work, which can be as little as 1 hour per week. Randstad did say they will not be aggressive with this model as having agency workers as permanent staff does have it drawbacks as well.

Other recruitment agencies have informed their temporary staff that they cannot be considered of permanent benefits until they have had the same training as the permanent staff.

Then there are employers that are using recruitment agencies to build up a bank of staff for the employer and it is the agency that runs this operation on the employers’ behalf.

It is of course quite apparent that many recruitment agencies and employers are looking at ways round this AWR, methods that will prove successful, well only time will tell. However one thing is clear is that the new regulations are not being embraced by anyone involved and view this new legislation as a hindrance rather than a stimulus to economic growth.