1st July 2020

Agencies should prepare for permanent COVID-19 driven growth of the contractor and temp market


The job market numbers make for compelling viewing, even if it is from behind the sofa. Anticipating key trends of the recovery could help your agency adapt faster.

We have to play the field in front of us

In March 2020 there were 752,000 company vacancies, but just 318,000 were available in May. This represents a drop in opportunities for candidates of around 60%.
There are 9.1 million furloughed workers. And as many as 20% of those are expected to be casualties as firms conduct consultations, signalling mass redundancies may be around the corner.
Going into lockdown there were some 2.75 million temporary employees across all types of temporary work, as defined by the ONS Labour Force Survey. The next data on this is set for release on 11 August.
In the meantime, it is a reasonable to say that agency supplied staff fortunate enough to qualify for furlough may soon find that fixed term contracts are not renewed, swelling the numbers of those already awaiting their next role.
This is where we are now and we can’t change that. We can only play the field in front of us.
However, as companies seek to rebuild, the recruitment industry can draw some broad conclusions at how this reshaped job market is likely to play out and figure out the best way to adapt.
It would be foolhardy to pretend you have a crystal ball and get into making predictions with certainty. That said, we can take some educated guesses.

1. Expect a baseline shift to more contract and temp hiring

With the ranks of the unemployed swelled, it certainly looks like being a buyers’ market in terms of the depth of talent on offer. Agencies and hirers are likely to be able to have the luxury of selecting from some exceptional candidates. The deep economic pain of COVID-19 has the potential to forever make companies less inclined to permanent hiring, equating to a baseline shift in the form of lasting growth for the contractor and temp market.

2. Anticipate irregular growth in hiring as recovery gathers pace

Generally speaking, the pace of hiring is unlikely to increase smoothly and there are probably going to be some bumps. One of the uncertainties here is how much the economic issues faced by many jobseekers hold things back. It is a bit of a Catch-22. Customers can’t spend freely if they don’t have a job; but companies can’t grow and create jobs unless customers are spending and profit and turnover increases.

3. Prepare for shorter working weeks or more part time roles

The bumpy recovery means that shorter working weeks, greater use of part time workers or zero hours contracts might be necessary. Companies are almost bound to exercise caution, feeling their way back to more prosperous times. 3 or 4 day working weeks are certainly on the cards for some. And restructuring the workforce through part time also provides the capability to provide a reduced service capability until demand recovers sufficiently to warrant full time staffing.

4. Consider stimulating career development

As the lockdown unwinds and the economy gets started on the road to recovery, it looks like there is going to be an abundance of talent on the market. One way to enable this enlarged talent pool to maximise its chances of success is to ensure candidates are as multi-skilled as possible. Although there will always be demand for specific skills and specialisations, such as those related to proprietary systems or specific industries, a good all round skill set supports flexibility. One reaction here is to consider facilitating pathways to Continuing Professional Development, qualifications and certification by engaging with a training provider.

5. Acquiring flexibility is essential

For recruiters, one takeaway here is to be prepared for growth without committing capital or resource. This means agencies need to ensure flexibility is interwoven into their plans. The use of temps within agency operations is an obvious tactic that provides flexibility. Another, that also makes sense, is to pursue strategies that do not require significant capital investment.
It is a good idea to review your systems. ETZ is a great way to move from manual timesheets to a digital  platform that harnesses the benefits of the cloud. This includes providing the capability to execute agency back office operations by working from home.

Adapting to COVID-19 driven growth with ETZ

ETZ is scalable, growing with you as your agency business increases. To find out more about how ETZ ensures you have the flexibility to adapt to changes in the recruitment market resulting from the COVID-19 pandemic, simply contact us today. Call us on 0800 311 2266 or book a demo.

Download your free guide

7 smart ideas to grow your recruitment agency.

Download Now
Download your free guide

Latest Posts


Market forces: Tech redundancies are a jobs market ‘correction’Market forces: Tech redundancies are a jobs market ‘correction’

5th December 2022

The bubble has popped for tech… well for now anyway The principle of ‘market forces’ is a pillar of capitalism....

Read more

How will your agency survive the recession and thrive beyondHow will your agency survive the recession and thrive beyond

5th December 2022

Bracing for an economic downturn Globally, there are likely differing experiences of the economic downturn. The UK is braced for...

Read more

10 Biggest Challenges of Recruitment for 2023 with Solutions10 Biggest Challenges of Recruitment for 2023 with Solutions

21st November 2022

What are the challenges in recruitment? In general, the eternal objective for recruiters is attracting talent to fill the funnel...

Read more

See what ETZ could do for your agency with an online demo

Save hassle, time and money with our powerful software.

Book a Demo