I recently had the opportunity to talk with Chris Hague, MD of TempWorks Software EMEA. Working as a provider to the temp recruitment market means Chris is talking to contract recruiting businesses daily, hearing about the challenges they’re facing and the market trends they’re observing. As such, he has his pulse on the industry and his insights are well worth conveying to you here.
Chris shared a wealth of insights about the current state of the temp recruiting market and we went on to co-host a webinar on these topics (the recording of which is provided below).
Chris spoke passionately about the many trends that are impacting the industry – most encouraging of which was the seemingly booming state of the market in the aftermath of the Brexit vote. He also has a deep conviction that temp businesses can position themselves for success, irrespective of market conditions, by being ruthless in weeding out unnecessary expense and streamlining their processes.
The Overall Market Climate
Speaking to Chris, he clearly hears from businesses that they still find red tape a considerable hindrance to growth. The tax regime (and changes to it), over-regulation, minimum wage compliance, diversity and inclusion practices, a lack of guidance and uncertainty around overseas job seekers – all are a drag on temp recruitment businesses. That’s before we talk about Brexit!
Chris spoke knowledgeably about the state of the UK labour market too (lots of stats shared in the webinar recording below). His biggest observation is around the impact that the Lehmans Crash and subsequent recession had on young people. A large swathe of this generation (16 to 24 year olds) risks being left behind, which will have a catastrophic effect on productivity in years to come. This group are three times more likely to be unemployed than the rest of the population - the largest gap in 20 years (and rising).
What really struck me was Chris’s observation that we have German levels of adult employment combined with the atrocious youth unemployment rates suffered by the rest of Europe. Coupled with this is the fact that our workforce age demographics are likely to swing considerably. UK employers need to fill an anticipated 13.5 million vacancies over the next ten years, whilst only 7 million young people will leave education over the same period. Businesses are going to have to embrace older workers if they don’t want to be left with a massive skills shortage on their hands.
I was also interested to hear Chris’s take on the impact of Brexit. His views mirrored mine, in saying that Brexit uncertainty is obviously a key concern… but that it’s the fear of the unknown that can be as much, if not more, of a threat to growth than the actual reality of the post-Brexit economy. This is something the industry is going to have to learn to live with though, as we’re unlikely to know the concrete repercussions of Brexit – and the deal that’s ultimately struck – for years to come.
At a recent Recruitment Directors’ event, though, I heard that the market has experienced a drop in permanent vacancy demand but a corresponding increase in temporary requirements. Chris’s anecdotal evidence supports this – and indeed commented that this is the pattern we’d expect in the industry whenever we’re in uncertain economic times.
Making Temp Recruitment Businesses More Profitable
It’s interesting to hear Chris report that many of his clients are saying they cannot fill all of their current requirements; that the shrinking talent pool is making competition between agencies ever fiercer and that every sliver of extra margin that can be created can make a big difference. Keeping your candidate pool loyal is one way of achieving this – and is an ongoing challenge for businesses it seems.
Chris is also a strong advocate of investing in technologies that make a business more resilient to any change in market conditions or squeeze of profit margins. Chris’s webinar was focused on “Process to Profit in A Digital World”, by which he broadly means identifying non-profit making business processes that can be streamlined, digitised and automated. How much have you done this in your business?
By taking this step, business owners are effectively able to do more with less, meaning more resources can be re-allocated to revenue generating activities. Chris highlights the business benefits of managing both compliance and back office services online, freeing up resources in exactly this manner.
In the latter stages of the webinar recording above you’ll see how a solution like TempWorks affords a temp recruitment business a customisable and flexible set of online workflows that considerably reduce the hours needed to deliver on any given assignment. If you’re toying with how to streamline things in your own business, I can highly recommend reaching out to Chris on LinkedIn and finding a time to talk.