According to the latest APSCo UK Recruitment Index, produced by the Association of Professional Staffing Companies (APSCo) in conjunction with accountancy firm Saffery Champness, UK recruitment firms are positive about their financial recovery in the wake of the COVID-19 pandemic.
Despite the impact of the pandemic, the withdrawing of government financial support schemes and the upcoming requirement to make deferred VAT and PAYE payments, all of the firms polled in the survey said that their cash flows were now sufficient in comparison to 2020.
However, despite this confidence and stability, the report also highlighted how the UK’s recovery from COVID-19 could yet be impacted by the ongoing skills shortage. Close to half of respondents to the survey (47 per cent) said that a shortage of candidates was the biggest challenge that their business was facing.
Another finding was that the skills shortage has also become a point of concern within the staffing industry. According to the survey, 43 per cent of recruitment businesses said that they were concerned about a lack of recruitment consultants.
APSCo CEO Ann Swain commented on the survey’s findings: “The market is over-saturated with vacancies at the moment which would normally be music to the ears of recruiters. But with skills shortages, the continued impact of Brexit and the long-lasting effect of IR35 still hanging over our heads, the recruitment market is struggling to meet demand.”
“Concerns around the number of available candidates aren’t just limited to client placements. Recruitment itself is facing a brain drain of resources, with staffing businesses indicating that retaining high performing consultants is tough at the moment.”
“While it’s certainly a difficult economy, it’s not a doom and gloom scenario. Organisational resilience is looking more promising than last year and firms appear to feel more financially stable at the moment. However, it is important that staffing companies prepare for the market ‘settling down’.”
“The hiring spike we’re experiencing is being significantly influenced by the events of the last 20 months, but this will come to an end at some point. It’s likely that we won’t see the longer-term impact on the economy and inflation until the second half of 2022 and it’s crucial that recruiters plan for a hiring ‘slow-down’ next year.”
Jamie Cassell of Saffery Champness said: “The 2021 Recruitment Index reveals that recruiters are in a stronger financial position in 2021, with firms of all sizes scoring themselves higher than last year for having sufficient cash and borrowing facilities in place to fund growth. However, the Index shows that shortage of candidates and resource are the main areas of concerns for the sector, with both of them likely to have an impact on potential growth.”
“With opportunities continuing to present themselves as the global economy moves out of the pandemic it is essential that recruiters can adapt, whether by altering their incentive schemes and remuneration packages, increasing their use of innovative technology or the continued use of flexible working practices. These factors will be important to the success of firms going forward”.
