The recruitment industry is always a good indicator of our economy. It’s the first to struggle during tough times (as people stop hiring), and the first to pick up in a recovery (as hiring picks up again). But there’s a lot more to be learnt from looking at recruitment stats.
In the past, there has been a decrease in permanent placements. With unemployment at low levels, uncertainty over Brexit, and firms more likely to only offer contract roles, this is fairly expected. However, one area bucking this trend is technology.
At Lorien, we specialise in tech recruitment and last October, we had our best ever month for permanent placements. I was a bit surprised, as the back-end of the year is traditionally a tough time. But when we broke that same record in November, it told me there was a trend at play here. That’s continued in 2019 – we are seeing a huge surge in demand for permanent staff.
If you think the tech industry is almost operating under different rules to others, you’d be right. The recent Tech Nation Report showed that the industry is expanding 260% faster than the rest of the UK economy. And while we’ve always seen Financial Services as a key pillar of the UK economy – digital tech vacancies have grown at three times the pace in the last four years.
So, technology is definitely a hot market – but why the sudden preference for permanent staff?
Investing in gold
I believe the smart businesses recognise that anybody who can drive or deliver their tech strategy is like gold dust. And right now, with all the economic uncertainty, the best investment they can make is in those very people.
This isn't just activity limited to pure tech firms, either. Even firms in other industries, who have tech as a major part of their strategy, are reacting in the same way.
There is also a big push on investing in tomorrow’s talent. More and more of our clients are asking us to use their Apprenticeship Levy to attract, train, and retain apprentices. Government figures show that the number of apprenticeship starts between August 2018 and January 2019 were 225,800 – down by over 40,000 in the same period two years earlier. I passionately believe that this is an area all businesses should look into more, as there is a great deal of untapped future talent out there.
You also have to be mindful of the upcoming changes to IR35 legislation. This could mean more contractors decide to switch to permanent roles – again, this means companies looking for top talent will have a real opportunity to lock them down. But before altering your recruitment strategy and looking for permanent staff, what do you need to consider?
It’s become more important than ever to have a strong employer brand, especially in the candidate-led technology market. If you’re asking people to commit to you on a permanent basis, rather than a six-month contract, they’ll scrutinise everything you offer.
Culture is so important, and if it’s a key part of your employer brand then you need to ensure it’s visible. Many companies are surprised that candidates don’t see how good their culture is – but quite often, it’s because they haven’t marketed it well enough externally.
Social media is obviously a great tool here, but there are also other avenues. For example, we create bespoke candidate packs that show potential candidates what a company is like, as well as hosting networking events.
In addition, what are you offering besides a salary? Employee benefits are becoming more important to candidates, particularly those related to physical, mental, and financial well-being.
Many candidates also expect a strong commitment to Corporate Social Responsibility (CSR) – a study by Glassdoor showed that 75% of workers expect their employers to donate money to people in need, or allow workers to volunteer their time.
Systems and processes
Many businesses who take on a lot of contractors use a recruitment partner to be their Managed Service Provider (MSP). As well as being more cost-effective, it allows them to outsource the “process” aspects – CV screening, compliance, invoices, and payments. If you’re bringing on large volumes of contractors each month, this is a massive efficiency.
When deciding to hire permanent staff, a lot of businesses want to bring the whole process in-house. I can see why – a permanent employee is a long-term investment. But bringing everything in-house is only a good idea if you’re taking on a small number.
The moment you start dealing with large volumes of employees, it becomes better to outsource. Many businesses find that their systems and processes can’t effectively manage this at scale. On the other hand, a good recruitment partner will already have these in place, ready to work on your behalf. You can then focus on embedding the new starters within their roles and the company culture. The onboarding process is absolutely key and should have your full attention.
What’s your market strategy?
Employees don’t just want a job – they want a genuine career. How clear are you on your market vision and strategy for the next three to five years? Where do you see the company, and how are you planning to get there? Sell this at every interview you conduct.
Remember an interview is a two-way process, and you have to convince the candidate as much as the other way around – especially, when they are likely to have multiple opportunities available to them. Explain to them the role they’ll play in achieving your aims – if you can get buy-in at that early stage, you’re likely to be onto a winner.
It’ll be very interesting to see how the tech job market develops over the rest of this year. Will the balance shift even more in favour of permanent placements? If so, this could have a big impact on recruitment strategies for businesses across the board, and it’s the smartest ones who’ll prosper.