Future of Recruitment 2020-2030 – Ian Knowlson speaks at Recruitment Expo 2018

Future of Recruitment 2020-2030

This month Ian Knowlson will be speaking at Recruitment Expo 2018, the UK’s No 1 Recruitment Industry Event in London on 31st January 2018.

In his lively and stimulating talk Ian will share his knowledge, as an employment futurist and experience as a highly successful Business Growth Coach, to help attendees make sense of the complex landscape of reports sighting everything from a Future Nivarna State to a Human Race/Employment Catastrophe.

Your Future Starts Today

What will the world of employment and recruitment look like in 2020-2030? What changes are likely and unlikely? Will artificial intelligence and Bots replace everyone and everything? Will recruiters still have a job and if so what will that job look like?

Ian Knowlson will consider the plethora of industry reports and commentaries on the future of work and employment from such esteemed and notable personalities and organisations as Simon Sinek, Elon Musk, PWC, McKinseys, the REC and BIOR. He will discuss and help you draw conclusions on the future of employment 2020-2030.

Spaces are limited but if you are interested in attending click here to register.

For more information on the event  click here

 

Top Recruitment Sectors for Growth in 2017

It’s here again, our popular annual blog that looks into the future and predicts the recruitment sectors that are geared for high growth in 2017.

2016 has seen some dramatic changes in the World. The UK voting for Brexit and the US voting for Donald Trump have seen a huge shift towards populist voting and a rejection of the establishment and globalisation. With general election in France, Netherlands and Germany in 2017 its difficult to predict what the future will hold.

So against this background this years predictions have been particularly fraught with challenge and some might even say they are courageous.

UK and Global Economic Dynamics

In making our predictions this year we believe it is important to state how we see the UK and World economies behaving as this will temper any forecasts.

As I write this blog the UK is projecting 2.2-2.4% growth in 2016, which is pretty much what was being projected last year. In fact this weeks Purchasing Managers Index (PMI) for the services sector is very robust and there is every likelihood that the UK will top the economic growth league amongst the G7 countries.

No small feat for an economy that everyone was writing off after Brexit.

After a fourth consecutive month of growth most importantly for the Recruitment Sector Chris Williamson, chief business economist at IHS Markit states:

“Employment is rising at one of the fastest rates seen over the past five years. Employers’ appetite to hire is being whetted by a further accumulation of unfinished work. Backlogs of uncompleted orders showed the largest rise for five-and-a-half years.”

Next year we remain optimistic and expect the UK economy to grow at 1.6-2.0%. Even as we go to press on our blog the economic picture is changing. Only recently the Bank of England upgraded its forecast for the UK to 1.4% and we have still to factor in the “Trump-effect”. Commentators are mixed on this but given his personal heritage with a Scottish mother and significant business interests in the UK we are optimistic that on balance “Trump” will be good for UK economic prospects in the short to medium term if not the world in general.

The final dynamic we believe will impact our world in 2017 is the recent agreement by OPEC and Non-OPEC countries to limit oil production in 2017 and beyond. This has already seen oil prices rise. The UK is an oil producing country and as such this should overall have a positive effect on our economy.

As we look into the next decade the picture is less clear. Artificial Intelligence, Big Data and Robotics (Bots) are set to change the world of employment and by definition the world of recruitment beyond all recognition

It has been described as the “disruptive tidal wave of technology” and you might wish to read our full forecast to help you decide if you are going to be a winner or loser.

 

Top five Sectors for high growth in 2017

 

No. 5 Accounting & Finance

In any economic downturn the demand for accountants and company financial experts rises. That’s my experience and whilst I doubt we will have a recession in 2017, there is no doubt going to be some economic challenges and a shift in corporate dynamics in the next few years to the end of the decade.

Brexit will require large numbers of businesses to make changes to their business and accounting practices. There will be further examination of cost and profit models that businesses operate. This is against the backdrop of rising long term demand for accountants which is caused by the large numbers of baby-boomer accountants retiring from business and more especially in the public sector where there is a small crisis developing.

Finally the other market factor, which is fuelling the rising demand for corporate IPO and finance experts, is caused by the attractiveness of UK businesses to foreign investment. The 15% reduction in the value of the pound post Brexit has suddenly seen a rise in foreign interest in UK companies. The number of mergers and acquisitions are set to rise in 2017 and this will fuel the demand for individuals with corporate finance expertise in this arena.

Ultra Niche Hot Spot predictions

M&A Specialists, Project Managers (Accounting skill-sets), Commercial Accountants, Project/Systems Accountants

 

No. 4 Oil, Gas and Energy

This sector has seen a downturn in the previous years projections but with the UK Government endorsement of the Hinkley Point C and Wylva Nuclear Power Stations projects plus the OPEC agreement with Non-OPEC countries to limit production also seeing an oil price rise there is a renewed confidence in many parts of the industry. The magic number is $70 a barrel above which the major oil exploration companies feel confident to speculate on developing potential fields.

In 2017 we expect the $70 a barrel level to be achieved but even before that we are already seeing some RFIs and tenders coming out by firms speculating on an up turn and looking to take advantage of the excess capacity in the industry and hopefully achieve some good sub-contract rates. With this in mind this we believe there will be a healthy rise in demand for people in this sector during Q3 and Q4 2017.

The significantly ageing workforce in Nuclear is likely to create a major skill-shortage here. Currently whilst demand for staff is high the large MSP contract providers that dominate this market are operating at margins that are almost unsustainable for SME agencies, especially when you factor in the cost of finance. It will be fascinating to see what will give first but as the public sector (education and NHS) have found you can’t buck the market for ever. This market seems ripe for niche recruiters to exploit these large skills gaps but we will have to see if this happens.

Our guess is that towards the end of 2017 we will see the dam burst and rates and margins rise as the fight for critical staff breaks out into all out war in some niche sectors.

 

Ultra Niche Hot Spot predictions

System Design Engineers, (Nuclear and Oil & Gas) Mechanical Design Engineers (Nuclear and Oil & Gas), Electrical Design Engineers (Nuclear and Oil & Gas), Project Managers (Nuclear and Oil & Gas) Systems Control Engineers (Nuclear and Oil & Gas).

 

No. 3 Construction

In 2016 we predicted this sector to rise and many recruitment businesses have seen solid growth this year but sadly not the levels we had all wished for. As we indicated the politics of releasing funds and capital flows to enable the huge growth in house building did not happen.

Sadly we do not see the seismic shift that is required in the financial markets to affect the large growth in private sector house building that is still required without a government policy shift.

Yes the government has committed £5 billion to boost the housing building but there is also the market factor that a huge growth in property completions will see prices stabilise if not fall and turkeys as they say don’t vote for Christmas and property developers and builders don’t vote for price falls either. The signs are encouraging in that there has been a growth in domestic building in Q3 but nowhere near the levels the government needs in order to achieve its target of 200,000 new builds a year..

The sectors skills gaps are well documented. In fact there is a fear that BREXIT will lead to thousands of EU nationals who have been plugging those gaps returning to mainland Europe leaving us under-resourced. It was reported in the Telegraph earlier this year that “Tony Pidgley, the chairman of house builder Berkeley homes has spoken out, warning of Brexit’s impact on construction workers, and pointed out that 50pc of his subcontractors are from Eastern Europe.”

This represents 23pc of workers in London. The article also claims that the construction sector needs to attract 500,000 new recruits in the next five years to plug the skill gap. Failure to achieve this will see house building drop from the 140,000 a year we are currently achieving to 100,000 a year and certainly nowhere the 200,000 a year the government wish to secure.

So agencies if you have the workers and can retain them then you should be able to make good margins in 2017-18

The significant number of infrastructure projects that the government has committed to since BREXIT (including New runway Heathrow, HS2 Phase Two) which were reinforced in the 2016 Autumn Statement, only goes to increase the demand for skills and ensures this will be a healthy sector in 2017.

Inequalities between agencies

What we are seeing however is that agencies that work with traditional generalist operating models (which are not worker centric) are not making the most of these growth opportunities. They are at best achieving 5-10% p.a. growth rates and in some cases less than that, whilst those with modern, ultra-niche models that put the focus on worker relationships are achieving 200-300% growth rates.

Perhaps now is the time to review your models and make that switch to being a Niche Recruiter. This blog might help Niche Vs. Generalist

Ultra Niche Hot Spot predictions

Scaffolders, Ground-Workers, 360 Drivers, Site Managers, Quantity Surveyors also traditional trades.

 

No 2 Engineering

The top two performing sectors are so consistently above the rest that it is hard to choose which represents the greatest growth opportunity. On balance we believe Engineering is in second place slightly behind IT and Technology.

The skills gaps in the engineering sector are massive and well documented. An ageing workforce of baby-boomers leaving between now and 2025 is creating a huge pressure on skills, which with the lack of STEM graduates over the past 10-15 years means the talent pool to replace them is woefully small and undersized.

To help you understand the scale of the problem research suggests that 182,000 additional workers are needed to plug engineering-focused graduate and apprentice positions every year until 2022. This is according to Engineering UK.

That’s over 1m more engineers.

According to Engineering UKCurrently the UK produces only 46,000 engineering graduates each year. There will also be demand for around 69,000 people qualified at advanced apprenticeship or equivalent level each year. Yet only around 27,000 UK apprentices a year currently qualify at the appropriate level.

Yes the numbers studying are growing and salaries are rising but the solution is that in the short term to plug this gap we will continue to import engineers from the rest of the world.

So are we surprised that one of the UK’s most famous engineers, Sir James Dyson, is looking to secure his own future talent pipeline by investing £15m over the next five years to secure his need to double his workforce to 6,000 by 2020 in his new Dyson Institute of Technology.

Ultra Niche Hot Spot predictions

Controls Engineers, ICS/DCS Engineers, HRSG Engineers, Turbine Engineers, Power Commissioning Engineer, HVAC Systems Engineers, Plant Layout Engineers, Civil Project Engineers (Nuclear, Rail), Automotive design Engineers, Signalling Engineers, PLC and Automation Engineers, PowerTrain Engineers.

 

No 1. IT and Technology

This sector has consistently been our number one for three out of the last four years. Our reason for this is simple.

IT and Technology faces all the demographic issues and supply and demand factors that the other sectors are grappling with.

Yes IT and Technology has an ageing workforce, Yes, the insatiable thirst for experts is never ceasing but the greatest impact is the rate of technological change and advance plus the globalisation of demand.

This is not a UK problem or a Western World or US problem it is a global wide problem.

In most markets many executives and business owners have not comprehended the scale or rate of advancement of technology change and how it could make their multi-million pound businesses obsolete overnight!

You have only to look at how disruptive business models that use technology or businesses that fail to keep up can fall from a market leading position to relative obscurity in 3-5 years to understand what is at stake.

Look at Novell Networks, in 1996 they were the provider of the worlds largest networking software by 2000 Windows NT had taken over their market position and Nokia have failed to recapture that since.

Between 1995-2000 Nokia were the worlds largest supplier of mobile phones today where are they ranked? According to WhatTechSays they don’t even make the top 10.

What about Blackberry? 2000-2005 everyone wanted one where are they today?

What about Amazon? Uber? Google? AirBnB? Spotify? Netflix? All of which are the disruptive models of today and considered by many to be “Rising Stars” or even “Cash Cows” if you apply the Boston Matrix.

But where will they be tomorrow?

Who is next to fall from grace?

So we can see how important technology is.

Take Artificial Intelligence, Big Data and robotics. The total effect of these three advances alone is predicted to transform the world of work in the next 5-10 years. Many jobs that rely on the processing of data and simple decision-making are set to become redundant. At the same time the growth in demand for the technologists that will enable this change is set to explode over the next 2-3 years.

In the US the prediction is 6% of all jobs will go. “By 2021 a disruptive tidal wave will begin. Solutions powered by AI/cognitive technology will displace jobs, with the biggest impact felt in transportation, logistics and consumer services,” said Forrester’s Brian Hopkins in a recent US Government report on the issue.

Business Intelligence is already a high growth niche and Data Science is rapidly catching up. The growth in demand for cloud architects and engineers, who will design the infrastructure as a service (IAS) and platform as a service (PAS), are tipped to accelerate rapidly, as is the demand for the developers who will develop the applications. Algorithm experts that support rule based AI is a key skill that is being included in many job specs and you can expect this to grow exponentially over the next 3-5 years.

If you are in IT and Technology recruitment there is a massive opportunity for rapid growth over the next 3-10 years. A terrific MUST READ article is Gartner’s Top 10 Strategic Technology Trends for 2017. It not only discusses 2017 trends but the likely longer-term developments.

If you are considering IT and Technology as sector to move into or making further planned growth then this is invaluable source of data and foresight.

As our world is set to be transformed, the jury is still out as to whether there will be a net increase in jobs or a reduction. The scaremongers seem keen to spread fear but are they right? Perhaps if it helps people wake up to the change in reality but history tells us otherwise.

We have been here before in the 19th century before the industrial revolution.

In the Pre-Victorian era, millions of people worked in agriculture. Automation arrived and allowed people to move off the land and into cities heralding in a whole new generation of jobs being created in offices,factories, businesses and retail as the factories made a new range of goods, jobs were created constructing buildings and infrastructure as well as roles in merchandising and the selling the goods that were manufactured.

In the 1960s and 70s we were told that the ‘microprocessor’ and computers was going to make thousands of jobs redundant. In 1982 as a young undergraduate working for ICI Plc. in Runcorn I built a prototype freight forwarding pricing system. The concept was proven and implemented by ICI in 1984 and 100-150 booking clerk jobs were made redundant. In the 1980s this happened in thousands of companies across Britain. Yes those roles were lost forever but thousands of others were created employment in the UK today is nearly 8m higher than in 1985 and the percentage of people of working age in employment at its highest at 75% of the working population.

We are about to enter another period of dynamic change and there are going to be huge winners and losers.

For recruiters there is one key question you should all be looking to answer.

Is this change going to see the jobs in my niche or sector become obsolete by this “disruptive tidal wave of technology” or am I serving an area of growth.

If you are servicing logistics, manufacturing, call centre staff, clerical assistants and distribution workers (drivers) then the answer is likely to be YES.

If your niche is in Product design, Engineering or IT and Technology then you are likely to answer NO but then again within all these sectors there will be some jobs that will disappear and other jobs that are created.

It is hard to identify all the winners and losers in this sector but you might find this article from Robert Half on the Top Ten Technology Jobs for 2017 helpful. Equally this article from earlier this year in the CIO Magazine on 10 Hot IT Job Skills for 2016 may give you a few more pointers.

One thing is sure 2017 is the year to review your market and make changes if necessary.

Ultra Niche Hot Spot predictions

UI/UX Developers & Designers, Business Intelligence Experts, Security/CyberSecurity Experts, Cloud Architects and Integration Experts, Data Scientists, Mobile App Developers, Full Stack Web and Product developers.

 

So these are our predictions for 2017. They are are based upon our hands on experience of working with 30-35 recruitment agencies across all sectors in the past 12 months. With all of them growing at annual rates of over 30%+ per year-on-year and some 200-300%, we believe we are well placed to know he best sectors to work in.

In the short term we still see healthy times ahead for the UK Recruitment Market but as we implied beyond 2022 with Brexit and the advance of technology the future becoming less clear.

You may have a difference of opinion and have experiences, which are not so positive so please contact me, [email protected] and let us know or share your thoughts.

We’d love to hear them.

Top Recruitment Sectors for growth in 2015

So here we are nearly two years after I wrote Top 5 Recruitment Sectors to be in for next 5-10 years and unemployment was still rising across most of Europe and the UK economy flat-lining how things have changed for us.

Today the Eurozone is stagnating but the UK has enjoyed a solid eighteen months of growth.

Top 5 Sectors for the Next 5-10 Years Update

My views on the Top 5 Recruitment Sectors for the next 5-10 years remain unchanged and there is increasing evidence to reaffirm that these sectors remain the ones that will see the fastest grow:

  • Information Technology
  • Engineering
  • Energy, Oil and Gas
  • Healthcare
  • Emerging Technology application

Information Technology continues unabated and this year our blog: The Top 5 IT skills right now! highlighted the key growth areas. Engineering is now also recognised as a key grow area for the UK economy.

Energy demand has abated somewhat since 2013 mainly, due to a slow down in global growth, but this sector remains a volatile sector highly dependent on the oil price. Currently there is a lull but is anyone willing to bet on it staying this low across the medium to long term. So watch this space. What we are witnessing in this sector is a switch to renewables and this is a key growth sector for agencies here.

Finally emerging technology application is starting to impact all sectors and with the talk of 5G Mobile networks allowing people to download 10 HD movies in 10 seconds being launched in the next five years the grow in Hi-Tec applications is set to explode. Only this week the UK Government have given the go ahead for driver-less –cars in five cities across Britain. So watch this space.

Top 5 Sectors for 2015

So what about 2015, will they be all the same?

No 5 – Information Technology

Certainly I see no reduction in demand for Information Technology. In the past month as part of a Managing Client Meetings coaching day we visited an IT Software Development company in South Wales. The business is part of global network of development centres from the US, Switzerland, India and the UK. It was interesting and heartening to hear that the UK remains extremely competitive and what may surprise many is that the differential in development costs between the UK and India is non-existent. In fact when all things are considered the UK is the most cost-effective place for software development certainly for this client. This is not untypical and with IT still attracting large numbers of graduates, the future for the industry looks healthy but not without issues.

The continued drive towards mobilisation of business via smartphones and tablets, the push for businesses to harness the benefits of ‘big-data’ the continue trend to placing everything in the cloud and the drive for virtualization are making skills in all these skill-sets hard, if not impossible, to source in most regions.

Demand for 2015 looks strong.

No 4 – Marketing and Sales

With businesses looking to expand market share, drive into new sectors or leverage the explosion of niche digital markets, 2015 looks to be the year high calibre sales and marketing professionals totally disappear. In the IT services, digital marketing and recruitment spaces my clients inform me that this is already the situation. Rec-2-Rec companies have struggled for a while to find real hard hitters who can deliver good consistent billings. Only Recruitment businesses, which operate with autocratic management regimes seem unable to hold on to their top billers. The abundance of recruitment sectors, which are now experiencing good growth means even average billers are now earning healthy incomes and not to wish to move.

So MD’s if you are losing staff take a look at yourselves first! Your issues may be closer to home than you think.

In sectors as diverse as construction, digital marketing, IT services and capital equipment top billers are not looking to move and businesses are increasingly turning to the ‘grow-your-own’ strategy. At Recruitment Training Group and Selling Success we are experiencing a 300% increase in the clients engaging us to design, build and deliver Graduate/New Sales Training Academies. Even if you don’t use ourselves this is a must for businesses seeking to deliver sustained sales growth over the next 2-3 years. Call us if you want to chat (07552 555858).

No 3 Construction

The phenomenal growth this sector has seen over the last eighteen months means its hardly surprising that we are seeing a slight decline in its progression. Like Information Technology I see this as a healthy sector to be in during 2015 as the demand for new houses continues unabated.

This year has seen huge shortages develop as reported by David Noble of Chartered Institute of Purchasing and Supply, “An encouraging 15 months of sustained employment growth – the longest since 2006-2008 – is revealing a major skills shortage in the sector.”

Irrespective of who wins next years general election there is a massive shortfall in the level of houses we are building currently compared to the demand. The shortfall is currently projected to be 40-50,000 completed dwellings in 2015 with an overall construction sector projected growth rate of 5.3%. With several key capital projects announced recently by the government and the investment being made in roads the sector looks set for a period of sustained growth.

No 2 Financial Services

Whatever your views on bankers and financiers and lets face it we all have pretty strong ones; a vibrant financial services sector is key to sustained growth for the UK economy.

Last month a study released by the CBI and PwC indicated that the finance sector had returned to pre-recession levels. As reported in the Financial Times in October 2014, Kevin Burrowes, UK financial services leader at PwC, highlighted an rising focus on new products and services and ‘technology-enabled growth’.

2015 has seen the return to healthier profit of many of our financial institutions. Our banks have performed well in recent years and they were noticeably absent from the European Banking Authority s list of failing banks recently.

Recruitment companies in the financial services sector are all talking big numbers for 2015 and I believe there is renewed optimism in this sector.

Sectors Worth Mentioning

Of all the sectors not mentioned here the one that could make a real surge in 2015 and upset this prediction is Healthcare. The shortages in this sector are well headlined. Doctors, Nurses and ancillary staff are all in short supply. Overall spending in this sector is either the same or growing not just within the NHS but private sector too. The demand for health workers with frontline skills remains high and once again we have insufficient numbers of people training to be doctors, nurses and clinicians entering the workplace.

In fact all the talk is for more support needed for the Care Sector alone. There is one factor which could change all this and that is government spending. The current provision of care by the NHS and local authorities is failing and the costs are spiralling. This is an issue that the next government will need to address over the next 2-3 years for the sector to remain viable. My contacts within the Dept. of Health and NHS England all tell me a big change is coming irrespective of which party comes into government after next May. My reason for omitting it from the 2015 Top 5 is that I see the changes will come too late to have an impact in recruitment sector for 2015 but expect to be discussing this again next year when we look forward to 2016.

No 1 Engineering

The sector I see most likely to grow the fastest in 2015 is engineering. The estimated annual shortfall of engineering skills in the UK is currently running at over 81,000 people. In addition according to recent studies those of us over the age of 50, who will be looking to retire in the next 10-20 years represent 20% of the UK workforce so this problem is only going to get worse.

A recent study by the Institution of Engineering and technology discovered organisations employing engineering skills reported:

  • Six out of 10 engineering employers fear that a growing shortage of engineers will threaten their business in the UK, research has found.
  • 76 per cent of employers reported problems with recruiting senior engineers with five to 10 years’ experience
  • 43 per cent of employers were not taking any specific action to improve workplace diversity
  • It’s estimated that the UK requires 87,000 engineers every year for the next 10 years to meet projected demand.

Only last month the entrepreneur and industrialist Sir James Dyson also highlighted the skills gap in this sector and all the data around future demand.

The CBI has also reported that STEM – science, technology, engineering and mathematics – skills shortages are widespread, with 43 per cent of employers currently having difficulty recruiting staff. That rises to 52 per cent of employers expecting difficulty in the next three years.

The Royal Academy of Engineering has also published a study saying Britain’s industry will need 100,000 new graduates in STEM subjects and a further 60,000 technicians and apprentices every year until 2020, merely to maintain current employment numbers. At present Britain produces only 12,000 engineering graduates a year. The UK also has the lowest number of female engineers in the whole of Europe at 6% of the workforce.

The evidence is overwhelming and when you get into the detail the demand is increasing too. By way of an example the Institution for Engineering and Technology indicated that 41% of the firms they surveyed planned to recruit in 2015 up 5% on the previous year.

With recent figures showing that the UK manufacturing sector is growing at its fastest rate for many years the demand shows now signs of abating just yet.

Governments Failing

Whilst I am pleased to see the opportunities for our clients to grow their businesses and delighted by the many thousands of views my annual blog receives on this topic every year, I can’t help fearing that our government is failing both our young people and us.

I am not in favour of a ‘centrally-controlled’ UK economy where the places are controlled but surely the existing system is neither working for students, parents or employers. There appears no correlation between the number of university places to study a subject and the projected number of individuals we as an economy require.

Surely we need to run more ‘STEM’ type degrees and fewer ‘Media Studies’, ‘Film Studies’, ‘Sports Science’ degree places. I am not saying that these degrees are worthless because they are not. It is just that UK Plc requires fewer of them than we are producing graduates in.

I have two children studying degrees and this has been a key discussion for us as a family. What I have told them is it is ultimately their decision, but it is a £50,000 decision so think carefully.

So parents if you are interested to know here is 2014’s Top 20 Degrees most likely to leave you on jobseekers!.

If this topic resonates with you then please leave a comment and share it with your connections and friends via Linkedin, Twitter or Facebook.

We would like to take this opportunity of wishing you a happy, successful and prosperous 2015.