Alex Grant, MD at Recruitment Funding Solutions answers some of the key questions we\’re being asked during this difficult period.
These are the COVID-19 questions every (startup) recruiter needs answering
How has the lockdown period been for RFS and its teams?
It\’s obviously been very different from how we all normally work but, with the technology and processes we have in place, the business was always set up with the capacity for everyone to work remotely, if required. I’m very proud of the way in which our teams have adapted to the situation and some of the challenges that it has presented.
The way that everyone has embraced those challenges and dealt with them has been very pleasing and reassuring. You certainly learn a lot about your people when faced with situations that are outside of the norm.
How has Covid-19 impacted on your agency client base?
We work with a wide spread of agencies working in a variety of sectors and naturally certain sectors have been impacted more than others. As an example, the medical/ healthcare, logistics and merchandising sector agencies have seen increases in volume across the board but then the construction, education and manufacturing sector agencies have seen an inevitable decline in business levels. We have continued to invoice with many of our agencies, but the volumes have obviously changed as per sector. As with our teams, I have been really impressed with the responses of the agencies we deal with in relation to their dealing of this difficult situation. Many have furloughed staff, but the directors have generally continued to work themselves and have really shown great resolve to ensure that their businesses stay in good shape during this time.
What challenges does the temporary Recruitment Industry face as we gradually move out of lockdown?
I think there will inevitably be challenges for most sectors because of the virus but I do believe that the temporary recruitment space will come back fighting quite quickly. I really feel for certain sectors such as aviation, retail and hospitality as this situation will undoubtably continue to impact them years down the line. In terms of challenges to our sector, Insurance is something that is already a hot topic and the trade credit insurance market has already reacted across the board and moved to mitigate its exposure. Inevitably, and rightly so, insurers will seek further reassurance before providing credit insurance on companies that may be deemed to be risky to cover so this will perhaps present some challenges for agencies wanting to trade with clients that might fall into that category.
On the same note, the potentially increased risk of end clients falling into financial difficulty, as a result of Covid-19, is also something that agencies will want to be aware of and may make them tread a little more carefully with who they trade with. Away from risk, dependant on the sector, the need for an external, flexible workforce could reduce for a period as businesses look to reign in their spending while they ‘lick their wounds’ as a result of the pandemic.
How might Covid-19 have a lasting effect on recruitment businesses?
I think recruitment agencies, particularly the temporary workforce, will play a significant role in helping our economy to recover and, the uncertainty that Covid-19 has caused with businesses everywhere, could well result in an eventual increase in the need for temporary workers. As I said before, this will be industry dependant but in construction, for example, the government have made no secret of their desire to pump funds into infrastructure to get the economy going again. Projects still need to be finished. Unfortunately, like in many sectors, there may also be redundancies, therefore there could well be a crop of talented recruitment professionals in the market to hire or even start their own agencies. It will be interesting to see how this side of things unfolds.
What, if any, opportunities might there be as a result of Covid-19?
As I said earlier, there will be a requirement for temporary workers as we move out of lockdown and the flexible workforce in this country will play a big part in the recovery of our economy so I do think the opportunity to provide a flexible workforce will be there. I also think the things we are learning right now, in terms of how we are able to work, away from a formal office setting, will be giving people confidence in how they may be able to work moving forwards. I already have several clients that have opted not to renew the contract on their office space, choosing to enable staff to work from home instead. There are obvious cost benefits to doing this but, also, this is, perhaps an opportunity to address the issue of work life balance with your staff.
Can work from home scenarios be embraced moving forward as we come out of lockdown? I think in some scenarios, the answer will be yes. I don’t think businesses will all necessarily abandon an office environment, and personally, I think this is where a real team culture can be built so perhaps a mixture of working remotely and keeping an office base might be the answer for some. I have conversations, everyday with potential new start-ups asking the question “Will I need an office?” I think what we’re all going through right now, is demonstrating that it can be done remotely if you have the right people who are motivated to do a good job.
What advice would you give to anyone who may be considering starting a recruitment agency right now?
I think if it is something you have been considering, now might be the perfect time to take the leap. In some cases, where people may sadly be facing redundancy, it may actually be their best option. I think 10 years ago starting any business was perceived to be much more difficult in terms of the administration and knowledge that you might have needed. There just was not the same support available as there is now. Services like RFS can make, what might ordinarily feel like quite a daunting and time sapping process, become very straight forward and things can be set up extremely quickly.
Whereas in the past, you had so much to consider as an agency like ‘Who will run my back office? Who will chase my debt? How will I manage my payroll?’, nowadays services like ours literally take that pain away and you can instantly have a professional back office and funding service in place so that, even as a one person outfit, your clients will see a professional service from day one. It certainly helps to bridge the gap between smaller agencies and those organisations with hundreds of staff. Nowadays smaller agencies can offer as professional a service as their larger competition and compete with them on a level playing field. Ultimately starting any business comes down to the question ‘Do you back yourself?’ If the answer is yes, starting up in this industry is easier than you might think.
What, if any, assurances can you offer to any agencies worried about the future?
Right now, we’re in uncharted waters so, exactly how this will unfold in the longer term, we don’t yet know. Having said that, there are industries that this will impact harder than others and whilst I can see, certainly in the shorter to midterm, permanent recruitment placements being a little harder to make, I am confident, from all that I see and read, that the UK’s flexible workforce will be playing a big role in the recovery. I am therefore quietly confident in the temporary recruitment market and its recovery.
Right now, my advice would be to trade sensibly and carefully, be aware of those freak job orders for 100 workers starting tomorrow but for only 2 weeks work. There will be companies looking to finish jobs but not have the cash to pay right now so tread carefully on who you deal with. Whenever there are challenges to be faced, there\’s also inevitable opportunities so look for those areas that you might be able to capitalise on in your niche. It’s also worth remembering, we’re all in the same boat with this. Every challenge that you’re facing, your competitors are also facing those challenges. Those that continue to do all the groundwork and not allow themselves to get lazy will come out in better shape.
