Talent Matters London: What we learnt – Key takeaways from a morning of insights

by in Events

Thursday, 7th September was a big day for Wave as we held our first live, in-person Talent Matters event since the pandemic. It was fantastic to get a host of recruitment leaders in a room at the same time to network and listen to insight-packed talks from our expert speakers from LinkedIn and TotalJobs.

There was a lot to unpack in those talks so we wanted to highlight the key takeaways from a morning full labour market insights, talent trends, and advice on how to tackle some of the biggest challenges for recruiters right now and in the near future. Huge thanks must go to Alex Charraudeau and Glenn Bloxham-Mundy from LinkedIn and Dr Julius Probst and Raj Lal from TotalJobs for presenting us with a wide range of in-depth insights.

The state of the market and recruiter and candidate responses

Businesses are still hiring, despite a cooling of the market

The news is full of data suggesting the market is quickly cooling and yet the economy is still growing and businesses continue to hire. Vacancies are dropping but, at 1 million, they remain above pre-pandemic levels and are levelling off from the surge of jobs in 2021. In fact, if anything, hiring difficulties are easing as more candidates join the market and jobs reduce to a manageable level. This is evidenced by a reduction in the average time to hire from mid-2022 onwards.

Confidence in recruiting increased for Q3 2023

With low unemployment levels and rising economic inactivity combined with high jobs, hiring has been challenging over the past 12-18 months. However, TotalJobs data has shown that 34% of businesses increased recruitment in Q2 2023 and 57% of businesses were confident that they would recruit the people they need in Q3 2023. Some industries had even greater confidence in their ability to recruit the people they need in Q3, with 74% of both IT & Telecoms and Media, Marketing, Advertising, PR & Sales confident that they would find the skills they need for their jobs in Q3.   

Rising cost of living prompts key candidate motivators

Inflation has exceeded expectations for almost two years and currently stands at nearly 8% (though this is down from a peak of over 10%). Wages have risen in an attempt to keep up but real terms, take home wage growth (taking into consideration inflation) had been negative for around 18 months, recently rising to just over the positive mark at around 0.6%. Interest rates are likely to remain high for the next two years but it’s something of a vicious circle – wages are rising to retain staff and attract candidates in the face of high inflation but the Bank of England will keep interest rates high until wage growth slows.

However, unsurprisingly, rising costs of living are at the heart of jobseeker decisions and not just in terms of salary. TotalJobs data has found that a third of workers are looking to change jobs for higher pay to combat the rise in the cost of living but it’s also found that two thirds of workers are open to relocating to another city for a more affordable lifestyle and a better work-life balance.

The skills mis-match needs to be fixed

There are two issues at play here. One is the mass exodus of EU workers since 2020 due to the pandemic and Brexit – a total of 51,000 left the UK and haven’t returned. Non-EU immigrants have steadily replaced EU nationals (with a net migration of 662,000) but the skills have not been replaced. There is still a huge shortage of workers in hospitality and agriculture, for example, as these are industries that have historically relied on EU workers. The non-EU workers that are coming through are entering different industries so the skills gaps continue.

The second issue it that we increasingly have the workers looking for jobs – there is a demand and a supply – but there is a mis-match in terms of skills and part of this is that the skills that are sorely needed are not being taught or accessed at an early level. Connecting businesses with education, marketing the apprenticeship levy, is vital. By 2030, 75% of workforce will be Gen Z – they are the ones that will need the skills as we rocket forwards into a new world of work.

How to grow your recruitment business in any market

When to grow depends on a number of factors

Where and how to grow your business are key decisions for top-line growth and they are made more challenging during periods of uncertainty and turbulence. It’s critical to know how to invest through adversity to emerge stronger on the other side. Alex and Glenn summarised it thusly:

  1. Verticals – where are there opportunities for high growth? Pay attention to secular trends so that you can be ahead of the curve of the next big thing. Where are the most profitable areas? These could be smaller areas but with opportunities for high growth, for example in areas where competition is less rife.
  2. Geographical spread – are you where you want to be geographically, for example in areas like APAC that are due to avoid recession?
  3. Product/service – Are the services and products you’re offering right now where you want to be in the coming decade? If not, think about how you can start to adapt to get to where you want to be.
  4. Talent/training – double down on training your team so as and when the market picks up they are ready to excel.

Knowing when to invest can be harder to pin down but there are two main indicators – lagging indicators and leading indicators. In a nutshell, this is what those might look like:

Lagging indicators: The unemployment rate is a macro indicator but by the time that’s happened you’re already behind the curve so look internally to what you’re seeing in your business on a micro level as that will be more relevant to you. That might be placements made or cash in the bank at the end of the month. Very relevant and absolutely important but still a little delayed.

What many recruitment businesses are now switching focus to are:

Leading indicators: Again, there are macro leading indicators such as unemployment claims or the Purchasing Managers’ Index (PMI|). On a micro level, what are the things in your business that are unique to you that can foresee a turn in the market? For example, that might be increases or decreases in debtor days as that can be a sign that clients are feeling the stress or starting to feel more cash-loose. First CV to first interview times is another good indicator. This is why data so important for internal visibility.

Switching to a return on resources mindset can help to manage the bottom line

We all want to get more from less and much of that comes from improving our efficiency and effectiveness. One way to do this is to switch the way you measure your returns from return on investment (ROI) to return on resources (ROR). In other words, it’s not just the money you spend to generate results that matters but the results from your resources. A business’ resources are their people, their time, their tech investment, and their skills. To increase your returns, you need to ensure you’re getting the most out of your resources.

This is especially so with your tech: “Technology investment should reduce the time or skill to achieve a task.” How do you do this? Highlight the skills or technical ability that goes into your processes and the associated costs, measure the time it takes to yield results, and monitor that your tech and tools are changing around time and skills. The question you always need to ask yourself is, could you have done this task without those tools in the time allocated?

Create unique value to stand out

In order to achieve sustainable growth and potentially sell your recruitment business in the future, you need to create unique value so that you stand out to clients, consultants and investors. This is a hard thing to do in a saturated market but it helps to be innovative and ahead of the curve in how you recruit. Moving from the old model of reactive sourcing, to sourcing and pipelining, to forming strategic partnerships, talent management, auxiliary services and proactive sourcing is crucial to creating unique value. Recruitment agencies need to be truly consultative to stay ahead.

Managing risk is key to success

We’ve gone through a rollercoaster ride in terms of risk perception and time horizons in the past few years. From peak uncertainty and risk-adverse in 2020 when making long-term decisions seemed impossible, to risk appetite opening up in the recruitment boom of 2021, to the huge amount of market guesswork in 2023, we’re now in a space where views on risk differ widely. Ultimately, risk never disappears, it simply moves. To manage that risk, there are three things you can do:

  1. Diversify when investing – that could be client diversification, consultant diversification, or product diversification (to spread into other areas of revenue). It’s the old cliché of not putting your eggs in one basket – old but extremely relevant here.
  2. Utilise data – use relevant data that you can trust, that is unique to your business and your area rather than macro data.
  3. Execution – take the data and think through ROI and scenario planning in terms of investments and decisions across your business. How can you stay agile to pivot when necessary?

It was a great morning, full of insights from our speakers and from the recruitment leaders that attended, sparking a fascinating round table discussion. In fact, Talent Matters London was such a success that we will be planning many more such events in the future so watch this space!

What’s next?

If you want to see, read or hear more insight-driven content, we have you covered:

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