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The true cost of the recovery
ECONOMIC RECOVERY
SOLID GROWTH
The UK’s economic recovery has been
faster and stronger than expected.
According to the Office for National
Statistics, the UK economy grew by
0.8% in Q1 of 2014.
This marks the fifth consecutive period
of GDP growth, the longest positive run
since the financial crisis.
700
600
500
400
300
200
100
02009 2010 2011 2012 2013
RECRUITMENT TRENDS
WHAT DOES THIS MEAN FOR
RECRUITMENT?
UK businesses want to grow!
Companies can’t grow without hiring the
right people.
Competition for talent is fierce.
Companies need to address their
recruitment and workforce engagement
strategies to attract and retain the best
people when and where they need them.
FORECAST UK
ECONOMIC
GROWTH IN 20142.9%
% OF EMPLOYERS
WHO PLAN TO
INCREASE THE
NUMBER OF PERM
EMPLOYEES
75%In next 3 months
% EMPLOYERS
WHO PLAN TO
INCREASE THE
USE OF AGENCY
LABOUR
48%In next 4-12 months
PERMANENT SALARY
GROWTH IS AT ITS HIGHEST
SINCE 2007
CONTINGENT PAY GROWTH
IS AT ITS HIGHEST SINCE
JULY 2013
2012 SAW THE FIRST
INCREASE IN THE DIVORCE
RATE SINCE 2007
REALISTIC
GROWTH IN SIZE
OF UK RECRUITMENT
MARKET
8%annually
Seasonally adjusted vacancies
Source: ONS
600k
550k
500k
450k
400k
0
2009 2010 2012 Q1-142011 2013
11
10
9
8
7
6
2009 2010 2012 Q1-142011 2013
UN-EMPLOYMENT RATE (%)
The perfect storm of increased demand for
talent and decreased supply is worrying
business leaders.
Against this backdrop, your like for like
costs will increase!
25% OF CEOs SAY THEY WERE
UNABLE TO PURSUE A MARKET
OPPORTUNITY OR HAVE HAD TO
CANCEL OR DELAY A STRATEGIC
INITIATIVE BECAUSE OF TALENT
CHALLENGES
“
“
33% OF CEOs ARE CONCERNED
THAT SKILLS SHORTAGES WILL IMPACT
THEIR COMPANY’S ABILITY TO
INNOVATE EFFECTIVELY
“ “
56% OF FS CEOs SEE THE LIMITED
AVAILABILITY OF SKILLS AS A THREAT
TO GROWTH, MORE THAN ANY OTHER
BUSINESS ISSUE
“ “
47% OF HR RESPONDENTS SAID
FINDING TALENT IS THEIR #1
BUSINESS CONCERN
“ “
WORKFORCE AGILITY
PAY-RATE MANAGEMENT
EXTENSION MANAGEMENT
SUPPLIER ENGAGEMENT
DIRECT SOURCING
HOW TO
MINIMISE
THE IMPACT
Recruitment is a board level
priority. Your recruitment strategy
must be aligned directly to
business strategy. We suggest you
start with the following five
suggestions:
BLENDED WORKFORCE – A ‘TALENT’
FAD….
….. OR THE GREATEST OPPORTUNITY
WE HAVE HAD TO HELP SHAPE AND
DELIVER COMPANY STRATEGY?
“
“WORKFORCE
AGILITY
A blended workforce — one that consists of employees,
consultants, independent contractors and contingent
workers — is quickly becoming the norm among global
companies.
As a first step towards workforce agility: at the point of approval
of a new role, build in a mechanism which enforces
consideration of the various options available.
WORKFORCE AGILITY
COSTSUBJECTIVE
VALUE
PAY RATE
MANAGEMENT
When we buy any product we buy with
either or heads (objective value) or our
hearts (subjective value).
When it comes to people and pay rates,
subjective value is typically high.
In this candidate-led market, it is more
important than ever to make sure you
have accurate benchmarking.
We suggest you start by reviewing the
benchmarking capabilities of your
operating model to understand its
potential limitations.
PAY RATE
MANAGEMENT
GETTING THE PAY RIGHT
1,000 contingent workers
650 hires / new transactions
1,300 extensions
TWICE THE
OPPORTUNITY
EXTENSION
MANAGEMENT
EXTENSION
MANAGEMENT
For an MSP with an average headcount of 1,000 contractors, they
will ‘process’ approx 650 hires pa (churn rate of 65%).
In the same period, the MSP will ‘process’ approximately 1,300
extensions, twice the number of new hires.
So a larger opportunity for your rate alignment exists through
extensions than new hires.
Why not set the objective of ensuring your extension process is
at least as robust as your new hire process in terms of
requirement assessment and pay rate benchmarking?
SUPPLIER RELATIONSHIP MANAGEMENT AS
THE SYSTEMATIC MANAGEMENT OF SUPPLIER
RELATIONSHIPS TO OPTIMIZE VALUE
THROUGH COST REDUCTION
INNOVATION, RISK MITIGATION AND GROWTH
THROUGHOUT THE RELATIONSHIP LIFE CYCLE
“
“SUPPLIER
ENGAGEMENT
SUPPLIER
ENGAGEMENT
Building relationships with motivated and engaged suppliers will
drive your company’s competitive advantage, ensuring:
1. Quality of service
2. Access to deep talent pools
3. Multiple, relevant, real-time and independent data sources for
benchmarking currency and price
A sensible first step: identify which, if any, of your current sub-
suppliers are key and ask them what they think about your
current operating model.
DIRECT SOURCING
TRAFFIC TO A FTSE
CORPORATE SITE IS
CAREER RELATED40%
PERMANENT HIRES
COME FROM THE
CAREER SITE23.4%
YET ONLY
PERMANENT HIRES
COME FROM
CONTINGENT TO
PERM CONVERSIONS
1.5%
COST QUALITY TENURE
More employers are engaging directly with candidates via their
websites and social media.
Companies are investing in their employer brands and physical
workspaces to attract the best.
There is an opportunity to become more engaged with your contingent
workforce, moving them towards perm opportunities.
A first step: if you don’t do it already, consider advertising your
contingent requirements using your corporate brand and corporate
website.
DIRECT SOURCING
IN SUMMARY
EVERY
JOURNEY
STARTS WITH A
SINGLE STEP
IN SUMMARY
Demand currently outstrips supply of
good candidates in key areas.
This can have a direct impact on growth.
The way we find and manage our
workforce is changing.
To get ahead you need to align your
recruitment directly to business strategy.
There are many challenges to consider
but it can be done!
