The Recruiter’s Brexit Survival Kit
I think we can all be forgiven for being more worried about inflation, access to medication and potential increases in food prices than how Brexit will affect the recruitment industry.
But as recruitment professionals, we need to make time to think about the potential ramifications of Brexit.
Because there’s an unpleasant truth about the current Brexit situation that few are talking about.
Deal or No Deal – Does it even matter?
Most of the discussion in the media is about whether or not Brexit is going to happen at the end of October 31st or whether it’s going to be delayed again. The political intrigue is fascinating, no question about it, but in terms of what happens over the next few years and how it’ll affect the recruitment industry, this is mostly irrelevant.
The reality is that, whatever happens next, disruption to UK business is inevitable.
Consider the potential outcomes…
1) Leave on 31st October WITH a deal
It takes a special kind of optimism to think that this outcome is likely. But if it happens, implementing the terms of the deal is unlikely to run smoothly. The transitional period will likely be lengthy, impacting the pound, inflation, and business growth.
2) Leave on 31st October WITHOUT a deal
If the prime minister manages to find a loophole and this scenario comes to pass, at least SOME level of disruption to UK business is a given. And it won’t change the fact that the UK will need to negotiate a deal with the EU regarding the Irish border, tariffs, trade, residency status, the ‘divorce’ bill and so on.
All the problems regarding Brexit that have yet to be sorted will still need figuring out, it’ll just be against the backdrop of some degree of chaos. That means an impact on the pound, inflation and business growth.
3) Brexit is delayed (again)
The fear of chaos will subside for a bit which could boost the pound. But eventually, the lack of clarity over the eventual outcome will have an impact on the pound, inflation, and business growth.
4) The Conservatives win a general election
Everything stays the same. A majority might make it easier to get a deal through but leaving with or without a deal will still bring the same problems (see #1 and #2 above).
5) Labour wins a general election
This will probably result in a second referendum.
If “leave” wins again, the new government will have to try and pass whatever deal they’ve negotiated. If they succeed, there will be plenty of teething problems to figure out (see #1 above).
If “remain” wins this time, expect a period of civil unrest from “leavers” who will feel cheated, and damaged relations with the EU who probably won’t be too happy about the years of wasted time and resources only for everything to stay the same.
This could result in… you guessed it… an impact on the pound, inflation and business growth.
6) Liberal Democrats win a general election
Their pledge is to cancel Brexit on day one if they win an election. This sounds like a promise made by someone who doesn’t really believe they’re going to win. But if this happens, expect an even greater period of civil unrest from “leavers”, and a frustrated EU partner.
Say it with me… impact on the pound, inflation, and business growth.
It’s not all bad (really)
I’m not trying to tell a negative, the world is ending, story. I’m simply trying to make the point that if your long-term plans for your recruitment career aren’t considering at least a few more years of Brexit-related chaos, your optimism is impressive but probably ill-founded.
Employment may have risen over the last few years, but it’s not unreasonable to believe that this could swing the other way.
Businesses with deep pockets will be able to take advantage of the downturn and continue their expansion plans, but many small and even medium-sized businesses will either fold or, at the very least, scale back plans for growth.
This means fewer recruitment assignment opportunities in what is already a crowded marketplace.
Yes, that sounds bad on the surface. But it also opens up opportunities.
If the recruitment industry suffers a downturn, you can expect to see smaller recruitment firms merging with larger firms, or breaking up completely with the individual recruitment consultants either moving into a different field or re-joining a larger recruitment firm.
This means that, if your recruitment firm survives, once employment starts to increase again, there is a chance to win a lot of new business and cement your place in the industry.
All you have to do is survive the disruption over the next few years, remain competitive, and be ready to ride the new growth when it happens.
Simple, right?
Well… no. This isn’t an easy proposition. It’s going to take some hard work. It might mean making some changes to your current business model.
But it IS doable.
Here’s how…
Locking Down Your Clients
If you’ve read even a handful of my previous articles you’ll already have a pretty good idea of what it takes to survive in a competitive marketplace in which clients are demanding value-added services and increased sophistication in role and candidate assessment.
Some points to consider…
· Winning new business with any consistency requires a USP that goes beyond the speed of delivery, deep networks, and competitive pricing.
· Turning clients into loyal, repeat clients means working with them on a consultative basis with guaranteed, staged payments.
· Locking down clients in a way that ensures consistent work and cash flow calls for managed service provider contracts.
If a substantial part (or all) of your recruitment business is on a transactional basis, you are most at risk from the repercussions of Brexit. If you think competition is tough now, wait until the general pool of vacancies starts to dry up.
But change doesn’t have to take years or even cost the earth.
Even winning just 1-2 retained or MSP contracts now can start you on the path to moving away from transactional recruitment and to the more lucrative and consistent consultative model.
There’s never been a better or a more critical time to start.