There is no doubt that, following the EU referendum a fortnight ago, the UK recruitment market is going to undergo a period of change and uncertainty. I spoke with one of our Managing Directors, Sean Burns, to get his thoughts on how the change will impact our business, the UK recruitment industry as a whole, and the SME market.
How do you think Brexit will affect the UK Recruitment industry in the short term?
The impact is definitely best split into two separate parts. The short term view has created a lot of uncertainty, and with that comes hesitation to invest - and part of investing in a company is bringing people on board. Until the UK finds its direction, it’s more unlikely that overseas investments are going to occur. People are less inclined to invest in things like staff and systems until the dust has settled. Already, some of our customers are putting things on hold in order to see what lasting effects Brexit will have on them. This also means that companies are much more rigorous with their hiring process.
And how about the longer term implications?
In the long term, in the markets in which we work - particularly the technical world - the demand significantly outweighs the supply. One scenario is that the UK closes its borders down, and suddenly we’ll have cut off a large part of our supply chain, we will no longer be able to access people from Europe or people currently in the UK who aren’t permanent residents. That would have an incredibly significant effect. The barriers to entry will become considerably more difficult to cross, whatever happens with Brexit and thus the technology market will be significantly reduced.
What changes do you foresee as a result of Brexit?
There’s no escaping the fact that Brexit is happening. A change has occurred, and that means opportunities will be created. Our customers in the SME tech-led world will continue to grow and invest. Cross-border European businesses will have their own challenges, but essentially where we are at the moment, there is so much opportunity and so many businesses starting up, so much investment that’s taken place of the last couple of years – these things aren’t going to stop happening. There is a huge amount of opportunity for a business like ours, due to our network, experience and level of service, to continue to grow in the same way we have been.
What does Brexit mean for Burns Sheehan?
Brexit is going to have a positive effect – although the available talent pool is going to be reduced, the processes we have in place to engage with the best candidates and our communities will mean that we can continue to succeed. If anything, the quality of service we can offer is going to get even better, as we can really show the value of our business as a trusted recruitment partner. Businesses are going to find it harder to bring on high calibre candidates, so our role within that will be more important than ever.
We are sensing the uncertainty across our client base, it’s having a noticeable impact on our larger customers – they are scaling back or putting things on hold, until the final outcome is confirmed. Candidates are slightly more hesitant to change roles, the passive market is waiting to see how things settle and people are understandably more risk averse that perhaps a year ago. We expect to see a slight decrease in the number of transactions.
How will Brexit impact different businesses of different sizes?
Organisations with multiple operations in Europe are obviously going to feel the ramifications of Brexit the most. They are the ones who will have the greatest degree of uncertainty, whereas solely UK based businesses are not going to feel the effects in the same way. Businesses that require very niche, in-demand skills will struggle to bring talent in from Europe, even if it just means that the process of doing so will become much more rigorous. The smaller, more agile and nimble businesses are able to make decisions more quickly and adapt as things change, so they will be less affected.
Thank you Sean.
Written by Becki Todd
Whilst we aren’t able to accurately forecast what Brexit will actually mean for the Recruitment Market, one thing is certain and that is the cloud of uncertainty hovering over the entire industry. We’ll be back with more insights further down the line.