13th August 2021

Exodus of key recruiters expected in wake of Covid


Historical data suggests flurry of breakaways and startups

The nature of recruitment is highly entrepreneurial. Senior recruiters and their less experienced but confident and savvy co-workers are often tempted to breakaway from the organisations by which they are employed and set up on their own.

They might just desire to operate as consultants, specialising in head hunting. Others might have bigger ambitions, taking other members of your team and some clients away as well as themselves, unless you’ve got appropriate legal instruments in place, such as NDAs and restrictive covenants to prevent it.

Recovery from recessions are normally characterised by a flurry of breakaways and startups setting up recruitment shops. According to the ONS, prior to the 2008 financial crash, the UK economy had undergone 63 quarters of growth. April 2008 marked the start of five quarters of contraction as the effects of the crisis took hold.

However, from July 2010 the upward GDP trend returned. The number of recruitment agencies operating in the UK was growing on average 27% per year, with a total of 32,886 agencies entering the market up to 2018… then enter Covid!

According to the UK recruitment industry status report 2019/20 containing a survey of REC member businesses from late October and November 2020, on average, one out of every 14 (7%) ceased trading for part or all of the duration of lockdown.

With the UK on the leading edge of the road out of Covid, there is significant optimism as anticipated rises in infections have failed to materialise; however, as with many aspects of the pandemic, it would be foolhardy to believe that the crisis is over.

That said, the UK economy seems to be bouncing back, but it is being retarded. Underlying skills shortages have been amplified by Brexit and the ‘pingdemic’, with more than 1 million jobs having gone unfilled for 11 straight weeks.

For recruiters, it’s a created a highly competitive market. Some recruiters may be seeking to switch employers. And further increasing the competitive pressure, as the historical data suggests, there is likely to be an exodus of experienced and middleweight recruiters with ambitions to make a go of starting new recruitment ventures.

Strategies for recruiter retention and protecting agency business

Dependence on key employees and the loss of talent is an ever attendant risk for businesses and organisations. Many have sought to manage this by preventing empire building by individuals and eliminating over exposure to the skillset, experience and knowledge of specific workers by fostering plurality in critical areas.

However, in keeping with sales environments in general, many individual recruiters own the relationship with clients and this can be an ace card.

One of the simplest ways of managing the potential for losing recruiters is to build strong relationships with your team members to develop loyalty.

This includes:

Even so, there will likely be no stopping those that are determined to pursue their own ambitions. According to a leading employment legal practice, some of the key measures that could be put in place to protect your business from poaching colleagues and soliciting clients or candidates include:

RecTech for more efficient recruitment with ETZ

With a more competitive recruitment market on the horizon, staffing agencies need to ensure their operations are as efficient as possible. ETZ’s timesheet, invoicing and payment system integrates the three key elements that underpin successful and efficient back office processing.

Working with ETZ offers agencies solid, innovative and reliable technology that enables your agency to maximise the value from your RecTech investments. To find out more about how we simplify the complexity of RecTech for agencies like yours, call us on 0800 311 2266 or book a demo.

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