Recruitment bosses speak out over Brexit stalemate

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Crystal Umbrella Review

Recruitment bosses speak out over Brexit stalemate

 

Until now, the recruitment sector has weathered Brexit fairly well – but the current political stalemate in Westminster over leaving the European Union now represents a real risk that placements may start to suffer, recruitment company chiefs have warned in Recruiter magazine.

David Taylor, the managing director of international recruiter First Point Group, said that following the Government’s decision to delay the vote in Parliament on the EU withdrawal agreement, the current situation was “probably the worst it could be, with an impasse and no clear way forward”.

“Any decision is better than no decision,” said Taylor.  “At the moment, we are dillydallying in the middle”, with no one having any idea what the outcome will be.  “Uncertainty is never good for any market,” he added.

Although the impasse over Brexit hadn’t yet “truly affected clients’ hiring, which is good news”, for the first time he was seeing clients “getting jittery”, he said.  Their main concern was the impact on the supply of consultants provided by First Point Group in the event of no deal.  However, the company was lucky in having a pan-European network of offices, he added, so even a no-deal outcome wouldn’t affect its ability to do business too much.

Tony Goodwin, group chief executive and chairman at Antal International, agreed that uncertainty was “the key and biggest worry”.  “The whole Brexit issue creates it, and business doesn’t like uncertainty,” he said.

Mr Goodwin warned that lack of clarity about the future was starting to have negative repercussions for Antal’s business.  “We have a few projects on hold, and a noticeable reduction in recruitment activity because of this uncertainty.  Parliament needs to stop playing politics with the referendum and go with the deal that the Prime Minister has achieved, which means we will be closer to trading ties with Europe than any other non-EU state.  This opinion is qualified by the assumption that we can still do separate deals with the WTO and the rest of the world – most noticeably China, India and US.”

Peter Searle, chief executive at global workforce solutions provider Airswift, told Recruiter that to avoid medium and long-term damage to the employment market, it was essential that a decision on the UK’s future relationship with EU be made sooner rather than later.  While in the short term, the current deadlock “will result in a reduction in permanent recruitment as people put their plans on hold” and could result in “a positive impact on temp demand to staff running projects”, a continuing stalemate would be damaging both to the temp and the permanent markets, he said.

“Any no-decision scenario will have this effect over time, and it is essential that UK Plc can get a decision any of three ways to stimulate, to a greater or lesser degree, the employment market. Exit with no deal, exit with May’s deal (or one close to it), or stay in the EU.  Without a decision, the medium- and long-term result will inevitably start to negatively affect the employment market,” said Searle.

Paul Flynn, an investor in the recruitment sector, among others, who sold his stake in Staffgroup to Cordant Group in 2015, told Recruiter that while “people were looking for certainty and some level of assurance that there would be a trade deal, the reality is that politicians can’t always provide this. It is business as usual, and you just have to get on with it.”

Flynn said that while companies “that hadn’t operated here before and for which the country was uncharted territory might be hesitant to invest here”, he wasn’t aware of any investors actually being put off the UK by the current situation.  He said that as an investor himself, who took a long-term view, he certainly wasn’t deterred.