At present it would take a brave individual to predict anything beyond the end of October, let alone into 2020. Whatever the outcome, Brexit will have a major impact on the evolution of the UK and European economies in 2020 and, with little or no clarity on a deal or no deal scenario, businesses are at a loss when committing to next steps. If we also consider the considerable impact that the trade war between China and the US is already having on the global economy, making predictions appears a risky game. We only need to look to the Financial Times’ forecast for the past two years to see that the world is getting harder to predict.
Having said that, there are several unshakeable factors that stand the UK economy in good stead. Employment levels are the highest on record; if you’re looking for a job heading into the new year, they’ll be ripe for the picking. From a recruiter’s point of view, it’s a candidate driven market. The war for talent is nothing new, but the war for retention is only just heating up. Brexit (come what may) will no doubt have an effect: less European candidates are joining the UK employment market than ever before, adding another layer of difficulty in some sectors (such as hospitality, manufacturing and construction). Recruiters are likely to be flooded with roles but potentially face difficulty in attracting passive candidates.
Further innovation in tech
On the other hand, the UK’s tech sector is booming: leading digital growth across the continent and is third only to China and the US on the global stage. In spite of all political uncertainty, tech continues to attract huge scale investment, creating exciting opportunities on a vast scale. Despite the challenges posed by Brexit, recruiters are in a very good position to exploit this boom in demand.
Digital innovation in the recruitment sector promises huge potential as we move into 2020. We have seen a large number of new apps and platforms go to market in the past 12 months, all of which provide an element of disruption to the recruitment process as we know it. AI is here to stay but, in my mind, it’s not ready to take the sector by storm. Where volume is concerned or entry qualifications are experience based or certified, AI will take the market share sooner rather than later. Where the complexity of the role requires a judgement based on human experience, AI has a long way to go. When it comes to cultural fit, especially in high impact, senior roles, a recruitment consultant’s value remains unrivalled.
So, should we embrace this technology? Absolutely. When the first job boards emerged in the mid-nineties, there were doomsayers all over the recruitment industry; when LinkedIn ventured into the market, many a pundit predicted that recruitment would soon be a spent force. It’s how you harness innovation that matters. Recruiters are the biggest users of LinkedIn and job boards, having embraced both innovations to their market.
Inch wide, mile deep
In-house recruitment is by far the biggest challenge to recruitment businesses at present. As retention becomes a greater focus, learning and development, company culture, and honing the employee experience have become a priority. Understandably, employers want their recruitment process to accurately reflect their business and attract the right individuals; in-house recruiters are often considered the solution. They are informed and entrenched within the company to an extent that external recruiters have to work very hard to achieve, giving them the edge. They are the biggest and most impactful development within recruitment in the last decade. However, the recruitment industry knows a thing or two about adapting: generalist agencies have become a thing of the past, whilst industry specialist recruiters and executive search consultants operate on an inch wide, mile deep basis. They are knowledge driven, well-connected, and bring a drive and commitment to client service often absent in in-house recruiters. Specialist sector focused recruitment businesses will continue to define the industry’s future.
Where does that leave us?
40,000 recruitment companies in the UK are contributing over £35 billion to the economy, and that growth only looks set to continue. Last year saw a 46% increase in new recruitment businesses, as entrepreneurs capitalise on a candidate driven market and employers’ reliance on industry focused, specialist recruitment. Recruiters are hardy by nature, nimble in mind and able take on a challenge better than most. Embracing the opportunity that change (whether political or technological) presents is paramount. Whatever 2020 is set to bring, the recruitment industry looks ready for the challenge.
Written by Abid Hamid, CEO of Recruitment Entrepreneur.
What does 2020 have in store for you? View career opportunities across our partner businesses here. Ready to go it alone? We’re a global investor in recruitment start-ups, apply now to launch or scale a business with funding, investment and strategy from our team.