With an ailing economy, the threat of recession, labour and skill shortages, an inflation driven cost of living crisis and below inflation wage increases the recruitment sector is facing a tumultuous time. In addition, the complexities of an evolving market in response to these challenges and sociocultural changes too, all add up to increased pressure on an already stressed sector. Terry Wolfendale, Managing Director of Pulse Outsource provides his view on how funders need to respond.
Recruitment firms operating in the post Brexit and post Pandemic era face a whole suite of new challenges. The unemployment rate in the UK is just 3.7%, which means a real shortage of available talent. Brexit and the Pandemic pushed many workers to re-evaluate life with some choosing to retire from the workplace altogether whilst others joined the “Great Resignation” bandwagon in 2022 having re-evaluated their careers post Covid and left their jobs in record numbers.
There has been much disruption and chaos caused to supply chains from the exodus of drivers in recent years and to provision of care in health and social care with workers leaving the sector entirely. Re-skilling and re-training are becoming the new trend as workers look to switch trades completely and re-train in more attractive sectors.
The cost-of-living crisis has provoked many workers to switch jobs motivated by their need for higher salary and benefits packages. Recent research* has revealed that almost half of professionals are looking for a new role for this reason alone – a significant increase on the previous year with more flexible working arrangements also high on the list.
The market is increasingly candidate driven. Recruiters are having to deal with a culture of “application abandonment” where candidates are abandoning their application mid-way through the process. They see the process as overly complex, time consuming and are disengaged when they don’t know where the process is headed. This unproductive use of time is costly to agencies and reinforces the need to get candidate recruitment right first time through better candidate engagement, and simpler and quicker automated processes. This will free up recruiter time enabling them to focus on building better relationships with candidates to ensure greater levels of engagement.
Design a response to tackle challenges and seize opportunities
A challenging environment which is set to continue but there are many opportunities and challenges for the recruitment sector and Pulse Outsource are committed to supporting agencies during 2023.
It is vital that Agencies are flexible enough to respond quickly to these challenges and the pressures it will place on their firms and their employees. I would strongly advise they review how their business operates and look at things differently, placing their stretched resources in the most productive areas. As operating costs rise, and wage bills increase it will place inevitable strain on cashflow and ensuring they have access to flexible funding will be key.
To attack some of these challenges firms will need to invest in systems to automate and improve processes whilst looking for ways to remove unproductive and time-consuming tasks if they are to give their agencies the best chance. For temporary recruitment agencies, ensuring they have efficient payroll and invoicing processes is vital to the smooth running of their business. These time consuming and increasingly complex tasks can distract their efforts away from the more rewarding focus of winning new business contracts and successfully placing candidates.
Funding and back-office solutions deliver significant benefits
Funding and back-office support solutions play a vital role in the success of recruitment firms. Choosing to work with a trusted partner means that Agencies can get on and grow their agency, whilst their provider handles the unproductive, time-consuming, and complex tasks.
Following our acquisition by Cubitt Trade Holdings in 2021, Pulse Outsource has benefited from a reinvigorated strategy which has seen investment in a strengthened proposition, increased funding lines, improved systems and soon a new larger office for our expanding team.
Pulse Outsource has over two decades of experience supporting the back-office and funding requirements of recruitment agencies. Supported by Lisa McCulloch, Operations Director, and her talented team, we understand the challenge of delivering a comprehensive and compliant invoicing and payroll solution to both Agencies and their contractors. Our solutions are designed to provide a flexible source of capital to enable them to drive their plans forward to grow their business. In addition, our back-office support services take care of those complex and time-consuming tasks allowing their teams to focus on winning business and placing candidates. Being integral to their operations, we operate as an extension of our clients’ teams and strive to offer a personal service second to none which exceeds our clients’ expectations.
We work with agencies specializing in all sectors from startups to those turning over £20m+. With funding facilities up to £2.5m and flexibility to increase this if the situation is right, Agencies can be confident that they have access to the funds they need. We support agencies at every stage be it a new start, established or a high growth agency who may be looking to acquire other agencies.
We are here for the journey and are proud to be supporting agencies who are growing and expanding. We are looking forward to continuing that support as Agencies respond to the opportunities and challenges in 2023 to ensure the continued success of their firms.