Globally, there are likely differing experiences of the economic downturn. The UK is braced for a recession forecast to last for up to two years. It seems likely that many other countries are already experiencing some level of economic downturn. This may not seem to bode well for the world economy in general, the growth of businesses or the prosperity of individuals.
While public sector organisations and privately operated businesses struggle to contain demands for increased pay and prevent organised labour strikes, the situation in the private sector is markedly different.
Employers are still recruiting and competing for talent, however the way ahead in this regard is uncertain. One indicator that suggests caution is that redundancy intentions are on the rise. In the UK this is up from 13% to 16% in the three months to December 2022.
The talent gap that is often talked about may be a little distorted by figures that are skewing the facts. According to The Chartered Institute of Personnel and Development (CIPD) quarterly Labour Market Outlook, one of the most authoritative employment indicators in the UK, talent shortages are highest in Transport and Storage (60%), Voluntary (56%) and Healthcare (55%).
For many businesses that sit outside of these sectors and their recruitment partners, the shortage of skills is in some cases, less acute and the situation somewhat less challenging. There are, however, undoubted problems in finding talent in some areas, with roles in technology being a prime example.
The global economy has been hit by a successive series of disruptive events:
As always, disruptive events produce winners and losers. For example, the NHS spent a colossal £9.2 billion on additional staffing for 2020-21.
Worldwide, recruitment businesses that focus on markets in high-demand sectors such as life sciences, technology and digital transformation are doing well. And this isn’t just from the perspective of burgeoning books of recruitment briefs. Investors have been quick to identify investment opportunities.
Here are three strategic plays you could use to help your agency survive the recession, no matter the severity of the economic situation in the territory in which you operate. They also put it in a position to thrive as soon as market conditions become more favourable.
Technology, or more correctly, mastering technology and maximising the competitive advantage it delivers, is critical to surviving the recession and thriving beyond.
One example is an ATS system that can search through applications to identify the right skills and qualifications. It’s not unusual to receive hundreds of CVs from candidates, the vast majority of which will be from ‘hopefuls’ rather than those with appropriate skills. You need an effective way of filtering them out. Manual searches are tedious and waste an awful lot of time that could be spent on doing better things.
Back office technology is also critical. ETZ is a timesheet and invoicing solution that saves vast amounts of time and effort. ETZ automates timesheet and invoicing processes, shrinking back office overheads and manual labour timesheet and invoice processing.
However, making better use of tech reaches into every part of your agency. From your website to job boards and CRM driven email marketing to candidates, exploiting technology and automation as fully as possible is key.
As some agencies may start to lag behind, opportunities for mergers and acquisitions (M&A) may appear. Some agency owners may wish to exit and sell up to invest elsewhere, or may simply have had enough and want to retire. Either way, acquiring a competitor may be a very shrewd move.
Mergers may be a slightly different proposition as bringing two different businesses together can be much harder than absorbing one, as it is with an acquisition.
From business culture to management styles, and from systems and integration to branding and messaging, it can be tricky, but it is readily achievable with considered thought and planning.
Cash-rich PE firms are always on the prowl! Such businesses are engaged in a continual process of reviewing markets to identify sectors and industries, niches and specific companies that may provide opportunities for delivering returns that outperform the market.
To make your agency attractive to an investor, they’ll expect you to be on top of the numbers (think Dragon’s Den). However, another key element they’ll look for is how well you are exploiting technology. Strategic tech tools like advanced analytics may well impress investors keen to identify the most dynamic agencies. If you’re dressing your agency to court a PE suitor, make sure your tech is in ship shape!
ETZ’s leading timesheet and invoicing solution streamlines the back office processing of your recruitment agency. Our complementary solutions, ETZ Comply for onboarding and document management, and Caspian for business intelligence, give agencies further capability to streamline and uncover opportunities. To find out more, call us on 0800 311 2266 or book a demo.
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