REC4 Recruitment

Recruitment industry outlook improves

Tuesday 1st June 2010

An improving outlook for the global recruitment industry is one of the key messages from the World Employment Conference in Sao Paulo, Brazil.

The event is the annual showcase for CIETT – the representative body for the industry across the world. 

Speaking after talks at the National Federations Committee during the Conference’s opening day, Recruitment and Employment Confederation Director of External Relations Tom Hadley said: "These have been difficult times for the recruitment industry in all countries.

"However, the feedback from national Federations was upbeat and confirms that we can expect a strong recovery in most countries over the coming year. Exchanging views on effective lobbying campaigns and on demonstrating added value will help to drive the industry forward on a national, regional and global level."

Examples of global trends flagged up at the conference are as follows: 

* In the US, temporary work was disproportionally impacted during the downturn. Unemployment is at 9.9%. However over the last seven months, 300,000 new temporary jobs have been created. Industry turnover was down 25% in 2009 but is up 10% in 2010;
* In Brazil the economy remains relatively buoyant. The industry suffered by 8% last year but has since recovered to previous levels. Unemployment is 7.4%. Government action is reducing the black economy which is a good thing for the industry. There are huge levels of protection for permanent staff which acts as a barrier to permanent recruitment and increases reliance on agencies;
* In Japan, the overall demand for temporary staff is still being impacted but the rate of decline is slowing and there are positive signs in terms of increasing demand. The markets in China and Korea show continued growth;
* In South Africa, the huge infrastructure projects ahead of the football World Cup has mitigated impact of the downturn on jobs, although the South African economy remains very dependant on what happens in the US and the EU; 
* There are tangible upturns in European counties such as Belgium, Holland,  Czech Republic and France, with predicted growth of up to 15% this year. In Holland demand is returning in the industrial, blue collar sector. Flexible staffing arrangements are seen as one of the reasons that unemployment in Holland has remained low at just over 5%;
* In Portugal, the industry declined by 25% with construction, manufacturing and the motor industry particularly impacted. The last three months have seen growth, April turnover is back to pre-downturn levels. In Spain a huge proportion of workers are on fixed-terms contacts, but the penetration rate of agency work remains low. The Government is looking at liberalisation and could lift restrictions on agency staff in construction and the public sector. The outsourcing of services is a major trend;
* In France, turnover suffered a 28% hit in 2009. Unemployment has reached 10% with young jobseekers particularly impacted. New laws have opened up the public sector but taxation on the supply of agency staff is prohibitive.

Is Lib-Con Coalition good for recruitment industry?

Thursday 13th May 2010

Major changes to policy and also the way the UK is to be governed are set to be introduced by the new Liberal Democrat-Conservative Coalition Government.

But will the economic policies of the new administration help the recruitment sector and get the country back on its feet after recession?

Business leaders have broadly welcomed the new Government.

Richard Lambert, CBI Director-General, said: "The agreement between the Conservative and Liberal Democrats to form the next Government is welcome news. Business wants to see a stable Government with the authority to take the tough decisions that will be required to keep the economic recovery on track and to get a grip on the fiscal deficit. This coalition should have the votes and the mandate to get on with the job.

"In the past few days, leaders of all three of the main political parties have emphasised their commitment to restoring fiscal stability in the national interest. That must be their overriding priority in the months to come."

David Frost, Director General of the British Chambers of Commerce, said: "We look forward to working with the new Coalition Government during a critical time for the economy.

"We will judge the new administration on the basis of what it does to promote business recovery across the UK. The BCC wants to see the delivery of a clear and achievable plan for business over the first 90 days of a new administration – a plan that puts business growth at the centre stage.

"Fixing the public finances must be at the top of the agenda. The Conservative-led coalition must be absolutely clear about where spending cuts will fall, and about the need to curb relentless growth in the size and cost of the public sector. They must also follow through on their promise to roll back the planned employer National Insurance rise in any emergency Budget.

"The next 90 days are crucial for recovery. We need concrete proposals to reduce red tape and tax burdens on business; action to move the economy away from consumption and the public sector and towards exports; and commitments to improve Britain’s key business infrastructure."

Meanwhile, Miles Templeman, Director-General of the Institute of Directors, said: "We welcome the emergence of a new Government to fill the power vacuum created by the indecisive election result. However, the key test facing the coalition is whether it can maintain a stable government over a significant period of time that delivers large cuts to public spending, and whether it can generate policies across all areas that genuinely supports business and economic growth.

"Each party has favoured or protected areas of public spending that are uniquely their own. Unless both show a willingness to make some sacrifices, there is a danger that tax hikes become the main tool to fix the public finances.

"No one should be in doubt that tackling the deficit primarily through tax increases would jeopardise the private sector and the country’s ability to pay for first-class public services in the future. Government needs to be much smaller so there is more space for businesses to grow. Unless we shrink the state through much lower public spending, the state will shrink the economy. A significant overall tax hike that hits employees and businesses would be a major error.

"Both parties have policies, particularly in relation to airport expansion and employment law, that concern us. There are also points of tension, such as on nuclear power. We will be watching closely how the Coalition operates in these areas to ensure that both parties understand what is at stake in terms of business growth."

Bernard Brown, Partner and Head of Business Services at KPMG comments: