Learn what s trending in the world of recruitment. Recruitment Market Intelligence Report
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1 Learn what s trending in the world of recruitment Recruitment Market Intelligence Report FEBRUARY 2015
2 At a Glance 30.8 million people in employment (Sep-Nov); up 512,000 from the same period last year 428,000 people in full-time employment and 78,000 more temporary workers (Sep- Nov) than the same period last year UK unemployment fell below 2 million for the first time in 6 years and currently stands at 1.91 million (5.8% of the labour force). The 1.3% decline from 2013 was the largest annual fall since 1972 Claimant count (number of people claiming benefits principally for the reason of being unemployed) has dropped for the 26th consecutive month (Dec 2014) to 867,700; down 29.9% from UK unemployment remains significantly lower than the rest of the European Union where it measures 10%. 2
3 Economic Backdrop Recruitment industry annual revenues (FY13/14) measured 28.7 billion, exceeding the pre-recession peak by 6.3%. Temporary and contract recruitment made up 91% ( 26 billion) of revenue, with fees for placing people in permanent jobs contributing 9% ( 2.7 billion). The UK economy grew at an unrevised rate of 0.7% in Q3 2014, contributing to annual growth of 2.6%. This was the 7th successive quarter of output growth; the longest run since The British Chambers of Commerce expect that run to continue, upgrading GDP growth predictions from 3.1% to 3.2% for FY13/14, and forecasting a 2.8% rise for UK INFLATION UK inflation fell to a record-equalling low in December 2014 of 0.5% (measured by Consumer Price Index). This is due, in part, to global oil prices dropping 40% since June 2014 (crude oil barrel now $48) as a result of lower demand, and lessened influence of geopolitics on production rates. AVERAGE PAY Average pay (excluding bonuses) rose by 1.8% in the quarter to November 2014, the highest leap in two years, and the first time in six years growth has been above inflation. Mean earnings in the UK stand at 483/week. 3
4 Employment Law Updates for 2015 Shared Parental Leave and Pay Expecting couples, children placed for adoption, or expecting parents of a child under a parental order on, or after, 5 April 2015, will be able to share the mother s maternity leave, and if available, maternity pay. New Statutory Pay Rates Statutory pay for maternity, paternity, adoption, and shared parental leave will increase to / week. Statutory sick pay (SSP) rate will increase to 88.45/week as of 5 April Fit for Work Expected to be available by May 2015, qualifying employees on a period of sickness absence lasting 4 weeks or more, can be referred for a free and confidential occupational health assessment and return to work plan. There will be a tax exemption of up to 500 (per year, per employee) on medical treatments recommended to help employees return to work. Discrimination at Work The European Court of Justice has stated that if obesity could hinder full and effective participation at work, then it could count as a disability. If the preliminary ruling is passed, it will become binding across the entire European Union. 4
5 Job Vacancies by Industry Q on Q Change -11.1% Manufacturing Professional, Scientific & Technical -8.4% Construction -0.9% Financial Admin & Support Services +15.5% & Insurance 0.0% 700,000 vacancies in Oct-Dec ,000 in microbusinesses (1-9 employees); 33.3% yearly increase 93,000 in medium sized (50-249); 20.2% yearly increase 270,000 in large businesses (2500+); 14.9% yearly increase +3.9% Public admin & Defence +4.1% Health & Social Work +9.4% Information & Communication +7.0% Arts, Entertainment & Recreation 5
6 Workforce Trends Permanent Recruitment According to the Recruitment & Employment Confederation, 84% of microbusinesses intend on hiring in Q This is in stark contrast to last year when the figure was just 21%. 21% in % in 2014 Confidence in the employment market is validated throughout the sector with 71% of all employers wanting to hire permanent workers in the medium-term (4-12 months). However, 84% of chief executives were concerned about the availability of key skills for the coming year (previously 64%), with 26% identifying education and training skills as an area for a potential shortfall. Despite concerns, 39% of bosses are very confident about growth prospects in 2015 (up 12% from last year). Contingent Recruitment According to KPMG, More than 1 in 3 recruiters suggest that employees looking for short-term roles are being increasingly spoilt for choice as organisations search for help in an effort to fulfil customer orders. 37% of employers intend to increase temp numbers in the medium-term 18% fear a skills shortage in technical and engineering agency workers A survey conducted by Institute of Chartered Accountants in England and Wales found 39% of firms believed this would negatively impact their business 75% said the government s highly debated EU immigration policy is likely to have little-to-no impact on them in 2015 Of the 1.68 million temporary workers in the UK (6.4% of total) in Sep-Nov 2014, 578,000 claimed they couldn t find a permanent job. This is down 6.3% on last quarter, and down 0.8% on last year. 6
7 Predictions for 2015 Candidates are back in demand and taking control The latter half of 2014 saw a real shift in the balance of power between candidates and employers as the UK economy recovered further and instigated a real desire for business growth. Social media will increasingly facilitate closer relationships between employers and prospective employees, as a glimpse into the reality of an organisation becomes ever more important to potential recruits. Are job ads something of the past? US shoe retailer Zappos pioneered an engagement-based approach to recruitment by removing all job adverts and encouraging interested candidates to join their social network in order to speak with current employees and demonstrate their passion and cultural fit. Hiring managers reported an improvement in the quality of hires in 2014, and it is an approach likely to be adopted by many in 2015; although few will be so brave as to abandon job ads. Birth of Community Managers Current trends in employment indicate the need for people that can recruit, but also possess exemplary digital marketing expertise, and the confidence to manage candidate engagement hubs and information centres. Growth of Big Data Recruitment and HR will increasingly need to embrace Big Data using data analysts to identify patterns which will shape their future recruitment strategies, helping them to identify and engage with potential top performers in
8 Four Facts Worth Knowing Gender Pay Gap Narrowed to its smallest level since records began. More than 1.2 million women (up 17% on last year) are now in the upper tax bracket, instigated by an earning of > 150,000. The number of men in the same tax band rose by 13%. Graduate Market 4/5 UK s leading graduate recruiters are now offering paid work-experience programmes for students and graduates, with an unprecedented 13,049 available this year. Graduate recruitment is expected to expand with 8% more vacancies. Socio-Economic Polarisation It s predicted that next year, a critical value of inequality will be eclipsed as 1% of the world s population will own more wealth than the remaining 99%. The 80 richest people already own the same amount as the poorest 3.5 billion. 50+ Workers In the UK, the total number of non-working people aged is now 3.3 million - a third of the age group. Yet 62% describe themselves as feeling as fit as ever, with 60.5% wanting to work beyond state pension age. Just this month, Barclays announced plans to open its apprenticeship programmes to the over 50s, and we may see other big hitters follow suit. 8
9 References ACAS: Employment Law Update Agile Intelligence: Recruitment Monthly Report BBC News: Business Equality and Human Rights Commission Guidant Group InSight: How Recruitment Changed in Office for National Statistics: Economic Review and UK Labour Market Report REC Industry Research Unit: Jobs Outlook 9
10 We Are Guidant Group Guidant Group, an international managed service provider and recruitment outsourcing specialist, is proud to be part of Impellam Group, the second largest staffing business in the UK. Together we have significant experience of working in partnership with companies within the banking and finance arena, reducing recruitment costs by an average of 23.4% while significantly improving customer satisfaction and the quality of new hires. If you would like to find out more about our services and how we can help you manage any aspect of your recruitment function, please do not hesitate to get in touch: Simon Blockley Client Solutions Director T: E: Interested in finding out the specific benefits your company could enjoy? Please feel free to contact our advisors: E: T: W: 10
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