What does a Labour government mean for employment and recruitment agencies?

Time to ring the changes…

Despite the title, we are not talking politics here. Whatever your political persuasion, it is likely that describing the state of the UK as ‘concerning’ cuts across party politics and might be seen as a bit of an understatement.

The reasons for the poor performance of so many functional areas of the nation are complex, and there is far more to it than just blaming the succession of Conservative-led governments that have been running the show for 14 years. However, the majority of voters are simply worn out by that narrative. For many, it seems, it is time to ring the changes.

So, what are the implications of a Labour government for the employment market and recruitment agencies?

Held to account by the manifesto

Employment has touchpoints with some of the most contentious and pressing issues facing the country, including immigration, unemployment, talent shortages, low pay, poor industrial relations, workers’ rights and education.

Ultimately, when the incoming government’s track record is put under the microscope, its performance will be measured against its pledges. Information from Labour’s 2024 manifesto is a good place to start.

A brief summary of manifesto content reveals the implications for key areas that will be of interest to recruiters:

• Immigration and skills policy
  Reforming the points-based immigration system for fairness and proper management. The introduction of stricter enforcement of immigration rules including agency compliance with new regulations to avoid being barred from hiring overseas workers. There is a significant need to train local workers to fill the vacuum left by limiting the number of foreign workers.
• Employment law and enforcement
  Recruitment agencies need to adhere strictly to employment regulations and legal requirements. Employers and recruitment agencies that breach employment laws or abuse the visa system are set to face stronger enforcement and penalties for non-compliance.
• Support for local employment
  Reforming employment support systems and integrating Jobcentre Plus and the National Careers Service. Recruitment agencies may need to collaborate and partner with LAs and public services to place job seekers effectively and develop local workforce and training plans.
• Focus on training and upskilling
  Reducing dependency on overseas workers and increasing recruitment agencies sourcing local talent. Agencies may play a prominent role in facilitating training programs and ensuring candidates are job ready.

Generally, Labour’s aim of economic stability and solid fiscal management should create less uncertainty and more confidence for employers and for recruitment agencies.

Key economic sectors expecting talent spikes

Some of the industries and sectors that are likely to see initiatives designed to stimulate interest to fill existing vacancies as well as fill new jobs include:

• Health and social care
  Considerable effort is required to attract and train new workers to improve care quality standards while improving staffing levels and working conditions.
• Construction
  Housebuilding and infrastructure development and maintenance mean the construction industry will also be a key focus area. Reducing reliance on overseas workers places a huge emphasis on training a homegrown workforce.
• Green energy and clean technology
  Labour’s commitment to making Britain a clean energy superpower using onshore and offshore wind, solar power, and nuclear and marine energy is estimated to create approximately 650,000 new high-quality jobs. This initiative includes investments in carbon capture and storage and hydrogen energy.
• Public services
  Addressing recruitment and retention crises in public services will require a larger workforce in areas like education, healthcare, and social services. Increased costs mean an emphasis on better pay and working conditions for public service workers.
• Creative industries
  This will be a significant area of interest as Labour intends to open up access to arts and culture, which will fuel growth in this sector, creating more opportunities and jobs.
• Financial services
  Stimulate growth in the financial services sector through a pro-innovation regulatory framework and by embracing new fintech technologies like Open Banking and Open Finance. 
• Manufacturing
  Advanced manufacturing is highlighted as a sector where the UK has a competitive advantage. Support for manufacturing industries, particularly those involved in producing green technologies like gigafactories for EVs and green hydrogen manufacturing.
• Education and skills training
  Reforming education and the skills system to better prepare young people and adults for the workforce. This will involve transforming Further Education colleges into Technical Excellence Colleges and ensuring better integration between further and higher education.

In short, these sectors are likely to see increased demand for workers under a Labour government, driven by strategic investments and policy reforms aimed at addressing workforce shortages, improving working conditions, and fostering economic growth.

Manage increased numbers of agency workers efficiently with ETZ

Faced with the alternatives of a). ‘Borrowing’, or b). ‘Taxing’ its way out of the current situation, it seems that by far the best approach is for the UK to c). ‘Earn’ its way out, through increased economic output.

The industrial strategy that underpins Labour’s ambition and is intended to propel the economy forward requires many hundreds of thousands of workers over the course of the next parliament, and beyond. 

Labour’s desire to use economic growth as the tool for digging the UK out of the hole depends on jobs, training and recruitment. Agencies are in a prime position to capitalise on the opportunities it brings.

Overall, for the employment sector in general and recruitment agencies in particular, a Labour government looks set to be a positive step forward. For recruiters that abide by employment law and comply with the regulatory framework, a UK under the stewardship of a Labour government holds much promise.

ETZ’s leading recruitment back office software solution streamlines the back office processing of your recruitment agency. Our complementary solutions to our leading timesheet and invoicing solution, are ETZ Comply for onboarding and document management, and Caspian for business intelligence. These give agencies further capability to streamline and uncover opportunities.

To find out more call us on 0800 311 2266 or book a demo.