North America – a Niche Recruitment Growth Opportunity

North America – a Niche Recruitment Growth Opportunity

As the domestic recruitment market becomes challenging for many UK businesses and our relationship with mainland Europe remains uncertain, we’ve seen more recruitment companies looking to expand internationally.

Asia and the Gulf States have become popular markets to explore, with Dubai a common first step for many in the Energy, Finance, Aviation, Aerospace and Technology sectors. Increasingly though, UK recruitment businesses are looking westwards towards North America.

North American Economy

The US economy has typically had annualised growth rates of 3.2% over the past 40 years and suffered from critical skill shortages for some time. Despite the recent upheavals on Wall Street, the U.S. economy is predicted to grow in 2019 at 3.7% according to the IMF. The UK niche recruiter models are ideally set up to exploit these opportunities, so why has there been reluctance?

Traditionally, this has been a tough market to crack for UK Recruiters due to expensive start up costs to establish U.S. operations and the complex legal and compliance systems. Unlike the UK, in the U.S. there is a three-tiered legal structure of Federal, State and Municipal Laws. The risk associated with this can be difficult to navigate, and many a UK recruiter has fallen foul of this intricate maelstrom of legislation.

Companies who successfully overcome these challenges and have plunged straight in and opened a U.S. office have had mixed fortunes. Several have experienced the combination of high operating costs and slow market penetration becoming too much of a burden on their UK business and have been forced to withdraw.

The costs of getting it wrong have been huge for some businesses. In addition to the federal, state and municipal tax challenges, there are also repercussions should you “misclassify” your workers as happened with FedEx in 2016 costing them $240m in 20 states.

How can you make it work?

In 1989, I was charged with opening a North of England office from an attic office in Bristol. Economically, the UK was diving into a recession. Working with a team of two recruiters we were successful in securing 50+ technology contractors from our southern base and on 28th January 1992 we opened our office in Knutsford, Cheshire. We were profitable from day one and expanded to bigger and greater things. Both of my start-up recruiters went on to become industry top billers and COOs.

Today the same model is being employed by several of our UK recruiter clients by establishing a North American team that targets the US & Canadian market from a UK base. Most operate U.S. Eastern Time hours from their UK offices starting work at 12-noon (GMT) and finishing around 8pm (GMT).

Those that do succeed all tend to make the expansion on the back of established relationships, which they have serviced, initially from the UK, before crossing the Atlantic. This is the path I exploited in the early noughties when I successfully led Hays IT’s expansion into mainland Europe, working with clients such as EDS, Hewlett Packard, Lloyds Banking Group, BT, Compaq, BAE Systems and many more.

Precision Global Consulting

One thing several of our successful clients all have in common is they use the services of Precision Global Consulting. (PGC).

PGC is a workforce management platform. They employ a workforce on their client’s behalf and take on the legal responsibility for those workers and making sure back office processes run like clockwork by offer a number of expert solutions;

  • Payroll and Tax Management (Federal, State & municipal, Overtime payments)
  • Contractor/Worker On-boarding in all 50 US states
  • Workplace Insurance
  • Healthcare Plan (ObamaCare Compliant, Paid Sick Leave)
  • Termination Management (all compensation and unemployment claims)
  • Compliance Management (Visas, I-9s, Business Insurances)

All of which allows your typical UK recruiter to focus on finding the contractor and totally servicing their clients talent needs.

The availability of ‘WeWork’ style co-working offices both stateside and globally has seen the cost of the traditional office set-up also reduce. Often, many of the start-up tenants become clients as well.

US Opportunity

The U.S. economy is expanding and is struggling to find the skills it needs to grow. The Bureau of Labor Statistics estimates the U.S. economy will need 100,000 new IT workers a year over the next decade and currently only 60,000 are entering the workforce each year.

In addition “boomers” leaving the workforce each day mean there are 3.5m new manufacturing jobs to be filled by 2025 and currently there is likely to be a 2m shortfall of jobs filled.

At present Pfizer, Boeing and Amazon are all struggling to find qualified workers and experts say they will increasingly be forced to look overseas for high-skilled workers.

Canadian Opportunity

In Canada the situation is no different. The Association of College Communities of Canada (ACCC) reports that Canada requires 260,000 construction workers over the next eight years and the Canadian Federation of Independent businesses report that there are over 300,000 job vacancies that have been vacant for four months or more. The list of high demand jobs in Canada includes all of those in the US but also Registered Nurses, Truck Drivers, Welders, Aerospace engineers, Software and Design Engineers, Pilots and Pharmacists to name just a few.

For most UK Recruiters, global expansion is now more than a dream, it is a real opportunity that might be worth considering, especially given the challenges Brexit may bring.

To find out more call either ourselves on (0370) 8790 105 or PGC if you’d like to find out more about managing workers across the U.S. and Canada at [email protected].

Future of Recruitment 2020-30 – Your Future Starts Today – RecExpo 2018 Download

This week Ian Knowlson spoke at the Recruitment Expo at the NEC in Birmingham on the Future of the Recruitment Industry 2020-2030.

During the talk Ian discussed many topics including the future of recruitment for Managed Service Providers and Niche Agencies as well as the threats to their businesses future and the opportunities for them.

Ian’s talk received overwhelmingly positive reviews from those in attendance with numerous requests for copies of the slides.

Please complete the form below if you would like to receive the files.


Ian Knowlson Speaks at NPA Worldwide Conference in Cyprus

Ian Knowlson Speaks at NPA Worldwide Conference in Cyprus

 

This week Ian Knowlson is speaking at the NPA Worldwide Conference in Larnaca Cyprus.

NPAworldwide has been connecting independent global recruiting firms to facilitate split placements. NPAworldwide is the oldest recruiting network of its kind, with an international membership of recruiting firms located throughout Europe, Asia, Australia, Africa and the Americas.

Ian will be presenting on speaking about – 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.

 

With Ian you will start to make sense of the timeline ahead and how the landscape of employment/recruitment will change. You will start to understand which sectors are predicted to grow and which are forecast to decline. How this will impact both niche recruiters and large-scale global recruiters and the consequences that this will have for those of us planning to be working in the sector during this period.

So the delegates will be invited to join Ian and take a time machine into your future to see if it is one that fills you with dread and fear or wonder, awe and excitement.

Ian Knowlson to speak again at RecExpo on Future of Recruitment 2020-30

Ian Knowlson to speak again at RecExpo on Future of Recruitment 2020-30

Ian Knowlson will be speaking again this autumn at Recruitment Expo in Birmingham at the NEC 3rd and 4th October 2018 on his hugely popular talk on the Future of Recruitment 2020-30.

The session in January at Olympia was over subscribed so if you are keen to see the talk we would encourage you to book early.

To secure tickets follow the link below

Click Here