So we have voted to leave Europe. We have new leadership in place already and are about to start serious negotiations with the EU before we enact Article 50. Recruitment Managers are monitoring proceedings closely to work out their strategy moving forward.
The temporary market across many recruitment sectors is booming. In fact, some sectors are seeing record numbers of enquiries post-Brexit, as some businesses don’t want to commit to hiring permanent staff in these uncertain times. Meanwhile, the permanent recruitment market has been affected depending on sector. The effects range from no change to redundancies being made. I’m hearing some recruitment businesses specialising in the real estate sector have let consultants go, as well as some within financial services.
The secretarial market has seen less new requirements from small to medium sized businesses, but no change amongst the blue chips and larger financial institutions. Rhetoric from organisations of all sizes is very much “let’s wait and see”. What next?
The UK and EU come to a loose “agreement in principle” about what the UK/EU relationship looks like post enactment of Article 50. Decisiveness, speed and communication of these preliminary discussions are three vital components in ensuring that any lack of confidence amongst UK businesses does not become the prelude to panic stations and likely recession.
On the assumption that these discussions are held quickly and there is real progress on the Free Trade versus Free Movement of People discussion, and it is seen that the UK Government and key players within the EU are confident of a satisfactory outcome, then there will be renewed confidence amongst UK businesses. Particularly in the financial services sector and the recruitment companies that recruit into it.
This could lead to increased permanent requirements across the board.
There is no real progress between UK and EU pre enactment of Article 50. A lack of clarity and concern continue surrounding what a post-Brexit landscape looks like will lead to a reduction (or further reduction) of permanent hiring across the board. Businesses will likely continue to “replace” a high percentage of leavers but the “creation of new jobs” will take a hit.
At the same time, businesses that are not already doing so, will look at whether they need to move some of their UK-based personnel abroad should there be a concern about the state of future free trade agreements and movement of talent within the EU.
Pre-enactment of Article 50 discussions are positive. Article 50 is enacted and the UK and Europe work closely to ensure there is a seamless transition with regards to Free Trade and Free Movement of People.
This is the “best outcome” and in this case, I would expect the UK recruitment industry to bounce back to 2015 levels of recruitment across permanent and temporary markets.
Pre-enactment of Article 50 discussions are negative. Article 50 is enacted but discussions versus Free Trade and Free Movement of People are destructive.
Following on from Scenario 2, businesses will start to follow through with plans to move personnel that need access to Europe into Europe. It is difficult to put a figure on the level of relocation but there will be movement and this will further affect the recruitment industry, not just amongst those companies specialising in the financial services sector.
There is no free trade agreement with Europe post Brexit.Businesses which need access to Europe move some of their personnel from the UK, whilst a lower £ and possible attractive tax rates bring an increased amount of investment into the UK from other countries outside the EU. London is still seen as a financial centre whilst the rest of the UK benefits because a wider range of UK industry is being invested in.
The recruitment market will benefit after a recession caused by an absence of Free Trade with Europe. Assuming that Article 50 is enacted at the end of 2016/start of 2017, I would expect the wider recruitment industry to see 2015 levels of growth in 2019/2020.
Brexit has shown us all that you cannot predict the future with any level of certainty, but you can look at a range of outcomes that may happen as a result of it and plan accordingly.
About the author: David Morel is the CEO/Founder of Tiger Recruitment, a secretarial/administrative recruitment agency based in London. David founded Tiger in 2001 and is passionate about best recruitment practice.