In the first instalment of a three part series in collaboration with corporate finance experts Shaw & Co, Heat’s CEO Steve Preston is interviewed by Oliver Roper about the state of the current recruitment sector, and what businesses need to know. Read the first part of the series below…
The UK Recruitment Sector: Part I
In the first of three features, we’re taking an exclusive look at the key issues affecting the UK recruitment industry with two of the sector’s key players.
How has the recruitment market changed in last 12 months? How do you see it changing over the next few years?
Steve Preston, CEO, Heat Recruitment: “If 2021 and much of 2022 was the boom, we are now starting to see a normalisation in the market. The end of 2022, following the September budget, and start of 2023, were a tough period for many recruitment agencies but things are certainly improving.
“Candidates will always have a high degree of power driven by the lack of readily available talent that exists across all our markets. We are, however, starting to see the balance of power move back towards clients. Business development is also now back on the agenda for recruiters and building solid relationships based on trust is key to succeeding in 2023 and beyond.
“Over the next few years, against the backdrop of high inflation, high interest rates and rising costs, it is hard to see today’s challenges disappearing any time soon. Recruiters need to be adaptable and agile, while clients must be open minded with their requirements and expectations, allowing recruiters to consult them on the complexities of hiring in a competitive market defined by high demand, high salaries, skill shortages and counter-offers.
“Clients are going even further with counter-offers to retain staff, and significant pay rises have been attained in certain cases. Companies, generally, have a much better, slicker and faster recruitment process; they know that if they delay it can be costly and they could miss out on that key person. Consequently, candidates have a lot of choice and are being more picky with the options they have.
“Thankfully, however, the counter-offer culture is slowing down, and it appears we are getting back to some sort of normality, and, as long as we don’t get any more external surprises in the economy, I predict we are in for great period of growth.”
Tom White, CEO, 5 Values: “The recruitment industry is ever evolving, it’s part of the magic of the industry and something that’s kept me enthralled for over 15 years now.
“Specifically in the past 12 months we have seen a tightening of the belt by our clients across the UK, Europe, and USA in respect to the number of vacancies on offer. The market had, until early 2023, been incredibly buoyant, so we are not too perturbed long term as this might just be a levelling, which is never a bad thing. Above all else it’s just a matter of perspective; in our own areas within technology, it will never cease to grow, but the pace may just change over the years.
“In coming years, we expect significant change in output and thus expectations within the recruitment industry as AI firms its grip. We do not believe jobs are under threat. We believe they, like the industry, will evolve and that output will be expected to increase as more data heavy and data inputting e tasks will be automised fully in a few years.
“One thing for certain, it’s going to be a hell of a ride with the coalition of AI, quantum, and machine learning in the recruitment sector.”
Which sectors are you seeing the most activity in? Are any particularly fast-growing?
Steve Preston, CEO, Heat Recruitment: “Our sectors have performed strongly over the last 18 months with all divisions performing consistently (aside from either side of Christmas 2022).
“The legal industry has continued to perform incredibly well although we have had to adjust to market conditions to focus on areas of law away from conveyancing. Insurance and financial services are robust industries and remain consistent performers for us with many long-term clients continuing to take new hires in 2023 and, with our new business acquisition strategy continually adding exciting and forward-thinking companies to our portfolio, we can see these being lucrative areas for years to come.
“Digital and technology, meanwhile, is a growth area for us in 2023 and beyond, with demand for contractors growing all the time as companies look for flexibility with their staffing. Finally, wealth management recruitment continues to be as demanding as ever – there is significant demand in the South East and Midlands for top talent whilst areas like the South West are constantly calling out for new people in the area looking for a change in lifestyle.”
Tom White, CEO, 5 Values: “AI is the fastest growing sector by far, there are huge sums of investment ploughing into AI in all forms at the moment from the Silicon vendors all the way up the chain to the digital agencies looking to inject AI into their business streams. We expect the hype to continue well into 2024 with requirements for machine learning and AI specialists expected to soar.”
If you’d like to discuss how Shaw & Co can help you sell, buy or fund the growth of a business, please email Oliver Roper – oliver.roper@shawcorporatefinance.com