An update from our CEO - April 2017
What’s the Market Like?
I think that it’s fair to say that, from our own observations, 2017 was beginning to look a lot like 2016. Both years started well with a feeling of new beginnings and with evidence of plenty of recruitment activity in Q1. However, as with 2016, the moment that media attention (quite understandably) began to focus on Brexit again, things started to slow down and there is no doubt that post the triggering of Article 50, there has been a marked softening in the demand for both permanent and interim staff.
A report on regional staffing trends published by APSCo in January suggested that, for the first time in a generation, political uncertainty had the potential to disrupt the economy in the South East; more specifically in London. Although on the surface, recruitment activity appeared to be holding up, growth in vacancies in large multi-national enterprises (MNEs) was pretty static with sketchy investment in headcount as there is now an inevitable question mark over the UK’s position as a “launch pad” into the EU. Unsurprisingly, Financial Services has been the first sector to be affected and we have already begun to witness an increase in applications from candidates with a keen desire to move out of the sector and into industry.
This is not all bad news and a flow of new talent coming onto the local market may go some way to alleviate the acute skills shortage in Surrey and the South East, but the challenge will be to encourage local employers to buy into the transferable skills that such specialist applicants bring to the stage. In addition, there is still evidence of growth in vacancies occurring at the SME level and London and the South East has cleverly positioned itself as a technology hub with vacancies in this sector up by between 30% and 40%. Generally Accountancy & Finance remains in the top five sectors (just!), but still with very little, if any, movement in vacancy volume year on year and the market is still weighted toward more junior positions creating some fierce competition for senior management and executive roles.
Walker Dendle’s own statistics show that, although the number of placements in March was down equally month on month and year on year, the actual number of vacancies registered – both permanent and interim – was up; a clear indication that the skills shortage in the region prevails leaving many vacancies unfilled for more than 60 days. In our view the primary reason for this is a lack of confidence amongst potential job seekers with fewer coming to market voluntarily as uncertainty about the UK economy brought about by the triggering of Article 50 and its ramifications bubbles under the surface and a career move at such a time poses a perceived risk.
That said, if the regional recruitment market in 2017 does, indeed, mirror 2016, and once the immediate attention awarded to Article 50 dies down a little, we would fully expect a welcome surge in activity until the Summer and then again in the Autumn with more vacancies being registered and an increase in talent seeking to move on.
What is yet to be seen is the immediate impact of the news of an early General Election and whether this will temporarily halt the recruitment market in its tracks – or is demand for high calibre and well qualified finance professionals in the region robust enough to navigate the bumpy road ahead with nothing more than a minor detour? The fact is that, in spite of a turbulent year for UK politics, the labour market has held up well with continuing record high employment and low unemployment resulting in a buoyant job market, especially in London and the South East. Whilst the response to last Tuesday’s surprise announcement by Theresa May could create short term uncertainty with businesses delaying some non-critical permanent hiring, experience tells us that, in all probability, the very same businesses will need to ramp up contractor headcount to meet the demands of their own order books.
Our firm belief is that, whilst exponential growth is unlikely, the local market is strong enough to weather the storm and that hiring will continue in 2017 pretty much as it did in 2016.