A Look Ahead: Our 2022 Recruitment Predictions

What we’re now seeing are subtle long-term shifts into a new culture of recruitment practice.

The die has been cast and legacy systems of HR and human capital have been discarded. In its place - modernity, tech, embedded recruitment and more. In this piece, our MD Roland Seddon has put pen to paper and offered his view on recruitment in 2022 - what are the trends that will drive the industry forward in the wake of COVID-19 and the ongoing effects of Brexit?

Contents:

• 2022 Recruitment Trends
• Permanent Staffing
• Temporary and Contract Staffing
• London vs Regions - Is the Exodus Permanent?
• Brexit
• Agencies Becoming Embedded with Clients
• 4 Day Work Weeks

2022 Recruitment Trends

My macro-trend prediction is that hiring will be difficult, but not impossible.

• Positive job flow, but difficult job environment.
  My feeling is that in general they’ll be positive job flow in 2022 but the future will be tough - for example, the skills shortage is making itself felt, 20% less people are applying for jobs at the moment through job boards and adverts, yet then there are 40% more jobs.
• Specialist agencies
  Specialist agencies will start to add an awful lot more value. This all comes down to time - specialist agencies can dedicate time to hunt proactively for talent, rather than just rely on it to come to them. They can work more on establishing networks and candidate databases, where candidates aren’t necessarily actively looking, but could be interested in future roles.
• The future of hybrid work
  There will be issues around seniority and hybridisation. When considering working from home, I think often it is more senior level staff that tend to have the infrastructure - such as a home office - to support long-term remote work. When thinking of early management level staff - those with young families for example - they desire a mix of office and remote work. Both as a touchpoint with teams, and to retain a sense of professionality away from working around young children (which can be incredibly hard).
• Retention strategies
  Retention will be an incredible burden on companies over the coming 12 months. Glassdoor did a survey of young workers between 18 and 24, at the end of 2021. These are people with no office at home, mostly living with parents, in this hybrid work/living space they don’t particularly enjoy. 40% of that age group felt disconnected to company culture, and 45% felt disconnected to their boss. This is a worrying trend, of people who feel disconnected to their work, which is important when considering how integral a relationship with a boss is to retention. Companies will have to really think hard about their learning and development strategies. I know a lot of companies are recruiting HR people now to help with “business strengthening”. HR teams will be driving culture, learning and development structures, plans, and processes so that they can make sure staff are adequately trained. To engage entry-level and hungry youngsters that want to develop a career, HR teams need to do that through training, community initiatives, and proximity to management.

Permanent Staffing

• Diversity, Inclusion, Sustainability and Company Culture
  In terms of permanent recruitment, what’s going to be important is diversity, inclusion and sustainability ESG. It’s imperative that employees and job seekers see what employers are doing in terms of commitment to sustainable practice. Employers need to make sure that ESG and ethical brand building is part of their recruitment process, and that they’re showing it’s embedded in the business. I think other principles, such as how companies treat their staff, their benefits, culture, and community are becoming increasingly important. Employers need to show stakeholders across the company and their network they’ve got a plan.

Temporary and Contract Staffing

• IR35 means more FTCs, so finding temp workers is going to become difficult.
  On the temp side, the challenges are there to see since IR35 kicked in, and since the markets returned post-COVID. Finding available talent just sitting around waiting for work is impossible. Everyone is working, in some facet, whether it’s perm, temp or interim. That culture of “availability” is almost impossible to guarantee.
  The IR35 changes that came in in March 2021 have caused many companies to simply not complete status determination tests - rather than risk issues rising from IR35, they’re simply saying their work falls under it. To streamline their staffing, I’ve noticed companies are bringing people into the fold on FTCs, without doing the diligence or full recruitment process. In this case, your candidate loses out. They don’t get the benefits of yearly bonuses or development, and don’t feel like a full-time perm staff.
  This also makes recruitment incredibly hard, as work is often offered on less than a competitive day rate, with none of the long-term perm benefits. As a result, IR35 is unpopular with staff who have found themselves in that part of the industry. However, great temp management means recycling temps as quickly as possible and working closer with employers. This ensures time scales and projects are managed so great temp staff are kept moving between roles. This is critical workflow prediction and management in action.

London vs Regions – Is the Exodus Permanent?

A question over the next 12 months will be what happens to wages, especially between metro-areas like London, and “nearshore” areas like Hertfordshire, the Home Counties and the South. When you look at counties like Hertfordshire, South Buckinghamshire, Surrey, Kent, and Essex, the remote/hybrid contingent workers are on London wages, but spending more time in areas that would take home traditionally lighter wages.

The question lies then on whether local companies can compete? Is it sustainable? Will they be asked back in the office? From talking to job seekers, the trend is that they will take a salary drop if they reside outside of London, because even the two days going into the city is an inconvenience for a lot of people. Recently I consulted with a finance director who’s working 100% remotely. He’s dreading going back into London, even just for two days a week. He is seriously contemplating trying to find something local, and he will take less money for it.

As a result of that, the big question then is how many people are going to leave London jobs? Does it mean there’s going to be an influx of talent into the commuter areas?  I am firmly of the belief this will happen, the trend for people to move out of the city will continue, and I think the commuter areas of the country are going to benefit from that hugely.

Brexit

The skilled talent that came from overseas was heavily concentrated in London. There has been a net loss of talent due to Brexit, which has also been exacerbated by COVID isolating foreign workers from their families. Many have simply left and not come back. On reflection, it’s obvious why - they didn’t want to be locked down away from their families, and have found after taking skills out of the UK they can be utilised in their home countries.

With fewer people wanting to live in London, it would be interesting to see what actually happens to the property market in London as a result of that. It’s possible that London loses some of its appeal. Interestingly, if London-based employers commit to paying higher wages to attract talent, that will further the trend stated above regarding positive impacts on commuter communities.

Agencies Becoming Embedded with Clients

I think recruitment agencies becoming more embedded with clients is going to be critical in 2022. For example, my firm is working with a £200 million turnover business at the moment. They’re privately owned, but they are splitting from the group they’re in.

Their MD has asked us to help provide consultancy services in regards to business structure, how they segment their departments, and salary guidance for new hires. We set up our consultancy product during COVID ‘Technical Consulting’ – so, one of the things we offered the MD was for a consultant who they can meet in person and discuss their needs. Companies are going to have to significantly alter their recruitment processes and change the way they historically have done things in the past.

We now offer a range of new products like rapidly produced video clips of candidates to support their CV and application, creating a more hybrid first/second interview. We have found that embedding these practices effectively streamlines the entire recruitment and wider HR process. There is a lot of value in that. The speed of service is vital to not lose talent, and differs from historical processes quite drastically.

4 Day Work Weeks

This is a much more popular concept than in previous years, and I believe it may be easier to roll out in some industries than others. There are certain circumstances where I’ve seen a 4 day week actually be a condensed 5 day week, or they’re expecting staff to continue picking up calls on an on-call system on the 5th day, but they can do it “from anywhere”.

Now, expectations here are so important, and each company is free to do as they see fit, but my view is that if you’re operating a 5 days in 4 system you’re not committing to the theory. Also, in certain industries like sales, the way the business is run - target hitting, rewards tied to performance - being made to work 4 days takes money out of their pocket, as they have less chance to hit those targets and grow those relationships with clients. I may be proven wrong, but at this stage it seems like those situations could occur more often than not.