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 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.

Top 4 Recruitment Sectors to AVOID for the next 5-10 years

 

 

Since March 2013 when I wrote my immensely popular blog

Top 5 Recruitment Sectors to be in for the next 5-10 years,

I have been consistently asked what are the recruitment sectors agencies should be avoiding. The first thing to say is that in my opinion, and those of most employment sector commentators, over the next 5-10 years we are entering a period of massive skill-shortages. Only last month the CIPD’s chief economist Mark Beatson indicated that the War-on-Talent was set to intensify.

 

In addition in recent months several reports by the IMF, the EU and Accenture support this view, which I have commented on in numerous blogs on the topic:

The demographics in many developed and developing, countries mean they will be facing declining skilled workforces and populations over the next 10-20 years. As a consequence severe skill shortages are inevitable in these economies. Recently the Telegraph highlighted this issue further in an article:

Britain’s baby boom will affect our economy more than anything Mark Carney does by Allister Heath, telegraph.co.uk June 7th 2013.

In the case of China the issue is so large that the IMF claim it will have a 140m-worker shortfall of skilled workers by 2030 which could have strategic implications for the security of the Pacific rim.

Therefore against this backdrop where demand for skilled labour will exceed supply there will always be an opportunity for enterprising recruitment agencies to plough their furrow. That said there are going to be some sectors where the opportunity for reward will be greater than others.

 

 

So having outlined my caveat here are my five sectors you should be avoiding if you wish to your agency to make the Sunday Times Fast-track 100.

 

1.         Admin and Clerical

11797609_sSince 2007 the US economy has lost 2m clerical workers and the UK 160,000 or 4.8% of the workforce. In the US clerical work accounts for 16% and in the UK 12% of all employment. (Sources: US department of labour projectionsUK Commission for Employment and Skills (UKCES) Working Futures Report 2010-20 (revised August 2012))

In the UK this figure is projected to decline to 10% of the UK workforce by 2020 with the loss of 400,000 jobs.

The reasons are that as businesses grow they increasingly seek to automate processes particularly those involving data collection and data processing and also use call centre to handle customer eqnuires. So the consensus is that this number, as a percentage of overall workforces will decline in most developed or developing regions of the world.

In our blog Can you win the Talent War we considered the McKinsey Report  which discussed the New Employment Structures. We pointed out that McKinsey;

Highlight the trend over the past 30 years of where transaction-based jobs that could be standardized or scripted have been automated or shifted to low paid workers. Now they highlight the knowledge worker jobs such as managers, sales reps, engineers, lawyers, managers, teachers and doctors which they label interaction jobs as being the major growth area and vital for companies and countries a like.

Clearly some recruitment of admin and clerical staff is going to continue and there will be thousands of jobs to be filled. The question for me is however with all the tools of job-boards, social media and direct/in-house recruitment teams how much will be conducted via recruitment agencies? My guess is nowhere near as much as there has been in the past.

During my research I have spoken to several admin and clerical agencies and reluctantly agree. They do pioint out however that those ones with strong long-established client relationships will survive and in some areas prosper especially where their focus is the SME market who do not have effective internal recruitment solutions. For those wishing to remain in this sector perhaps this should be your key focus.

Gone however are the days when thousands of admin workers will be supplied via agencies to FTSE 250 companies. Clearly if you are operating in this sector you might need to undertake a SWOT analysis to review your future position.

You however may violently disagree. If so please let me know. I believe debate on this issue is healthy.

 

2.         Unskilled Industrial/Manufacturing

18124171_sAgain the data that exists on this comes from the US & UK employment figures. The US department of labour projections point to unskilled manufacturing jobs declining between 5-10% during the period 2010-20. In Britain the (UKCES) Working Futures Report 2010-20 (revised August 2012) provides good employment sector data and projections. For those in recruitment it represents a must read even if you don’t necessarily agree with its findings. This report itself points to a decline from 8% to 7% in the number of people employed in manufacturing.

These declines will be heaviest in old traditional industries where offshoring, productivity gains and industry decline will account for most of the reductions. In hi-tech sectors such as IT, Aerospace, Oil & Gas and electronics, much in line with our previous blog on the topic, the declines will be smaller. The overall decline in this sector is projected to be a fall of 400,000 jobs with particularly sharp declines expected for unskilled and semi skilled manual workers.

The reasons are obvious the cost of labour in the UK compared with China, Asia and the emerging African economies means that production of low value items will move abroad. Hence why UK Plc. needs to focus on hi-tech products or those where we can add-value.

In addition where these people are recruited I see an increasing role for In-house/Direct Sourcing teams who can leverage their clients brands to attract the numbers and volumes they seek.

The opportunities in this sector for recruitment agencies operating a traditional model are therefore limited. Again the SME market who do not have access to strong brands and in-house recruitment teams may offer some agencies hope.

 

 

3. Customer Contact and Call Centres

10112935_sWe have seen this area decline for many years now and the decline is set to continue further caused by three factors:

  • Off-shore of customer contact centres
  • In-house/Direct Sourcing Teams
  • Switch to Online and Mobile App purchasing

The combination of these three will see volumes of recruits via recruitment agencies continue to decline. There has been a reversal by some employers of the strategy of offshoring their customer contact centres due to customers complaints and service issues but this trend is being more than offset by the greater use of technology which are creating contactless purchasing systems.

In addition as with the other two areas Direct/In-house Sourcing teams are having great success in attracting staff and filling the needs of their business. They are in many cases more than managing to cope with the level of applicant attraction required to maintain and increase employee numbers.

 

4. Public & Third Sector

public-sector-pagesThe final sector I have highlighted to avoid will not surprise anyone in the UK. There has been much written in recent years about the decline of the UK public services from their peak in 2008, virtually all of it by interested parties on various sides of the political spectrum.

Once again the UKCES Report points to a total 2% reduction in the number of people employed across this sector falling from 27% to 25% by 2020. This reduction is actually masked in my opinion by the switch of roles from the public to the third sector as local authorities and NHS trusts reallocate the provision of some of their services into social enterprises.

For example the Office of Budget responsibility forecast in February this year that central and local government employment would fall by 900,000 between 201011 and 2017/18 as a result of government cuts.

This figure has been challenged by many commentators, who claim the reductions could be even greater, as much as 1.2 million. Clearly some of these jobs will switch to the third sector but it is unlikely that we will see more than 400,000 new third sector roles created and some claim it will be as little as 150,000.

Whatever your political views on this it is unlikely to be an area of growth for recruitment agencies in the way that it has been in recent years.

 

Common factors

imagesYou will by now have noticed that there are some common themes emerging. With the exception of the public services one or more of the following appear to contributing factors in all of the remaining cases.

  • Offshoring of roles and business functions
  • Supply of unskilled or semi-skilled workers
  • Technological advancements
  • Direct/In-house Resourcing of staff

Only one of these is new, namely the rise of Direct/In-house Recruiters. As a young adult of the 1980s I can bare witness that we have seen all this before. The only change here is the jobs being off-shored today are the ones we were saw replacing the old declining industries of the 1980s era such as coal mining, clothing manufacture and steel working. You only have to visit parts of Lancashire and South Yorkshire to see the plethora of call centres and customer service centres that populate the old mining and cotton mill towns. Some even operating on former sites.

Technology and alternative sources of cheap labour have always meant that job functions will shift round the globe where a predominance of unskilled or semi-skilled labour is required for the production, manufacture or delivery of a service or product.

No country is immune to this.  Germany saw the switch of its manufacturing eastwards after the collapse of the Berlin wall firstly into the former East German regions and then into Poland, Hungary and the Czech Republic. India which was the recipient of so many of the UK jobs  in the 1990s is now seeing many of these transferred further eastwards or even into Africa.

The only way a country can retain its employment is to become experts at leading edge technology industries. Where design and development is a key factor but this too may shift elsewhere with university education globally changing.

As recruitment consultancies we are, to all-intense and purposes, ‘traders of skills’. We must not lose sight of this. We only exist because of the inefficiencies of the supply side of the economy. That is where:

  • Nations fail to direct their investment in skills and training in workers to satisfy their future businesses needs.
  • Where employers fail to invest sufficient in their workers over a period of time to satisfy their future organisations needs and hence have to pay fees to appropriate staff from other employers.
  • Where employers do not have the skills, resources or mechanisms to identify, attract and retain their workforce needs

Is there a better solution?

sc ience UniAs a parent of four children with ages from 12 to 22 you can imagine we have plenty of barbecue discussions with friends around the whole issue of youth employment. As a former advisor to Liverpool John Moore’s University on employability I have debated this subject many times.

I do question whether the time has come for Government, the Further Education Sector and UK Employers, perhaps the CBI, to attempt to address this fundamental issue for the long-term sustainability of the UK economy. Shouldn’t there be a degree of connection between the number of degree spaces for subjects and the projected UK demand for a skill area. Why if industry, commerce and education are crying out for maths, science and engineering graduates are we using scare resources to educate large numbers of people in subjects for which the volumes of meaningful employment does not exist.

In addition it seems ludicrous for tens of thousands of students to be accumulating up to £50,000 worth of debt each to acquire a degree in a subject for which there is no likelihood of them all getting a job. Aren’t we are deluding these young people that they will ‘get a job’? It could be argued we are ‘mis-selling university degrees, now there’s a thought!

The rapidity with which the economy and employment shifts means that the laws of supply and demand which should ultimately rebalance this inequality may not ever have time to take effect.

In the meantime we could be destroying a whole generation of young people and ultimately ourselves as a society by failing to remedy this issue.

 

Conclusion

In the meantime it is clear that whilst supply side inefficiencies exist there will always be opportunities for entrepreneurial recruitment agencies that are experts in their niches but it does beg the question; Are the days of the generalist high-street recruitment agencies numbered?

That however is another blog.

As always these are my thoughts and I’d be delighted to hear your views too.