Recruitment Businesses in the Brexit Age
As all sectors brace themselves for the unkown, recruiters will have particular challenges, both here and across the Irish Sea
Brexit is an opportunity and a threat to recruiters. The findings of recent Bibby Financial Services UK research highlights that over half of recruiters have reported an improvement in business performance over the last year, which suggests they are currently reaping the rewards of a tighter labour market.
But there is anxiety in Ireland around the UK’s future and Brexit threatens to exacerbate the current skills shortage. Brexit will need to be carefully managed by recruiters on both sides of the Irish Sea. They need to think about diversifying their business, or increasing their investment into improving and retaining their own talent so they can continue to grow.
MANAGING LOW UNEMPLOYMENT
According to the Central Bank, Ireland is expected reach full employment in 2019 and record low unemployment is changing the landscape for both recruiters and employers. The demand on a smaller pool of skilled and talented candidates is encouraging employers to offer higher wages or extra workplace benefits as hiring incentives.
Complicating the matter further, candidates also have the luxury of choice in the jobs market. This means they can pick and choose either long-term positions, or pursue short-term contractor or temporary roles.
Recruiters will need to adapt and ensure they are providing the specific types of roles that candidates now expect. Although the macro-economic picture is challenging, many businesses are thinking on their feet when it comes to higher employment; broadening their search to include candidates with different skills sets. For example, in some sectors like construction, skills can be nurtured so long as candidates are attracted to the roles on offer.
To do this effectively recruiters need to have systems in place to support and attract quality candidates. Having an efficient back office with smooth payments and administration systems that provide a better user experience for candidates is one way to achieve this.
While there’s a growing opportunity for recruitment businesses to maximise their expertise and experience on behalf of increasing numbers of employers seeking their help, the challenge is whether they can then deliver the calibre and number of candidates being searched for.
While many recruiters have achieved growth, a lack of cashflow continues to blight their ability to invest for further growth.
According to Bibby Financial Services Ireland’s recent SME Confidence Tracker, Irish SMEs, including recruitment companies have to wait up to 33 days to receive payment from their clients, and while this is standard practice, recruitment agencies are tasked with the challenge of simultaneously paying their contractor and temporary staff on a weekly basis.
Combined with utility bills and overhead costs to pay, the combination can lead to a gap between paying and receiving payment, often limiting both investment and growth.
There continues to be extra administrative burdens on recruitment businesses working with the public sector.
The opportunity for investment is there, as the sector grows. New staff, training for existing employees, and upgrading front-end technology are all priorities for recruitment agencies looking to take advantage of the current employment climate. Management of payment and cashflow is also crucial, if these businesses are to further succeed.
To mitigate the impact of late payment, recruiters can look to invoice finance to manage cashflow more efficiently and free up time for the day-to-day running of their businesses.
Mark O'Rourke, Managing Director speaking with Elaine O'Regan on Employment Matters in the Sunday Business Post (published 13th January 2019)