Top 5 Recruitment Sectors for Growth in 2020

Top 5 Recruitment Sectors for Growth in 2020

It’s nearly done.

With the country electing a new government and the new parliament voting by 124 votes in favour of the EU Withdrawal agreement Brexit is almost done and business and the country can start to move forward. Well that’s the theory and really only time will tell but with a majority of 80 MPs we will have a degree of certainty as we all plan for 2020 and a new decade.

So where does that leave us in the recruitment sector?

Well we predicted seven years ago in our hugely popular blog Top 5 Recruitment Sectors to be in for the next 5-10 years the five key sectors for growth and as we start the new decade our views have not changed too much:

Top 5 Recruitment Sectors for next 5-10 years
      1. Information Technology
      2. Engineering
      3. Energy, Oil and Gas
      4. Healthcare
      5. Emerging Technology application

And as we move forward to the economy being a bit more positive in the next twelve months it’s time to look forward to our predictions for next year.

UK & Global Economy

As we reported last year the UK economy has been remarkably resilient over the past eighteen months but there was a sense in the last few months of 2019 that we were in serious danger of entering a recession.

Last year we had predicted GDP growth of 1.2% until Brexit happened with 1.6-1.9% afterwards. As Brexit never happened 1.2% became the reality (as predicted by PWC) but we are hopeful in 2020 that it will rise to the 1.6-1.9% we predicted  last year.

Companies have been holding off investment till the medium term becomes more certain and we believe that the post-elect and Brexit conditions we are moving into fulfil that criteria.

In addition, we have a UK Govt that has committed to significant investment in the UK economy:

    • £100b committed to Infrastructure projects over the next five years
    • An extra £33.9n on the NHS by 2023/24.
    • UK’s 2050 Carbon Neutral Commitment
    • New expenditure in Education and schools/colleges

This coupled with the huge levels of external investment that we hear has been waiting to be invested in capital and property development in the UK we anticipate a significant positive effect on aggregate demand for staff in the UK.

It’s our experience that candidates have been holding off switching careers in significant numbers over the past 6-12 months.  This is typical of previous periods of uncertainty in the late 80s/90s as well as after 911 and also the financial crisis of 2008/9.

Published in June 2019 this timeline shows the dramatic candidate market change that occurred between 2008/9 and 2010/11.

It does not show the continued downward trend in candidate placements that we believe has occurred over the past six months.

Over the next two months don’t be surprised if you start to see surveys that indicate a significant percentage of candidates looking to change jobs in 2020 as this is what we anticipate. In past times this has been as high as 65-75% of staff seeking new careers. All of this is good for recruiters.

Finally the Global economy has received some good news over the past few weeks with the early signs that the US & China are finally reaching a trade agreement that will remove the tariffs that have dampened international trade and subdued markets. This too can only help support the upturn in the UK economy.

In conclusion we believe 2020 will be a good year for the UK recruitment market

The Top 5 Sector outsiders for 2020

We remain a little certain as to how this will dynamic cocktail of political and market forces will play out over Q1/Q2 and so have ranked the following sectors just outside the top five.

Financial Services

The uncertainty of how the final trade agreement between the UK and the EU will shape up will have such a significant impact on this sector so we are not comfortable in forecasting significant return to growth in this sector until at least Q3 – 2020 when hopefully an agreement can be agreed but truth is we do not expect this sector to return to normality until Q1/Q2 – 2021 assuming a UK/EU trade agreement. If that is the case 2021 could be a. great year for Financial Services.

Distribution and Logistics

As this is coming from a strong performance in 2019 again the uncertainty and lack of clarity means we do not see this as being a sector for significant strong growth in 2020. There is still a lack of warehouse capacity in Q4/19 and Q1/20 due to Christmas and Brexit Stockpiling. As this unfolds in Q1/Q2 2020 we expect this sector to return to a degree of normality but with the long-term trend towards internet more shopping there is still growth in this sector. With expected UK government investment in AI and R&D we see the medium term less certain as this sector is ripe for automation.

Public Sector (Excl. Healthcare)

Additional government expenditure in education and the emergency services announced in the Queens speech and the relaxing of the fiscal constraints that have held back investment means we do expect there to be more monies in the public services over the next twelve months though IR35 will hamper temp/contractor growth in this sector and which will lead to further skill-shortages across the sector.

No5 – Energy (incl. Renewables)

The Energy sector seems set for strong growth again in 2020 due to the stable oil price currently more than $10 a barrel above the magic $50 at which investment seems to dwindle. In addition, the key area of growth in this sector is in renewables for reasons we have stated last year in our Top 5 predictions for 2019.

The UK has committed to being carbon neutral by 2050 which means we must continue to invest in Renewable Energy generation and technology. In addition, the EU continues to be committed to carbon reduction targets for 2020 and 2030 which means the continental demand for skills will also not subside despite some of their weaker economic indicators.

In Oct 2019 for the first time in our history electricity from renewable sources rose to 40% of the total generated surpassing fossil fuels for the first time since 1882 since the first fossil fuel plant powered up.  10 years ago, fossil fuels made up 80% of our electricity so this is huge step in our nations quest for carbon neutrality.

Luke Clark, of Renewable UK, told the Guardian recently that the industry hopes to treble the size of its offshore wind sector by 2030 to generate more than a third of the UK’s electricity.

The key statistic for recruiters which is driving demand for staff in this sector is that 566,000 people work in the sector which will need over 221,000 new recruits to fill its expected skills gap by 2027.

This represents a huge skills-gap which creates massive opportunity for recruiters in this sector.

No 4. – Healthcare

With the new government committed to spending and extra £33.9b on the NHS by 2023/24 and the commitment to recruit 31,500 new nurses and an extra 5,000 GPs, creates another huge opportunity for our recruitment agency sector.

Given that the government are hoping to attract a significant number of these from abroad this creates an excellent opening for innovative and creative entrepreneurial recruitment agencies to support the national cause and help find these people.

We would be even more positive about this sector but the recent IR35 rule changes has made this sector less attractive and in fact we are hearing of UK recruitment firms supporting UK trained nurses and doctors making the move abroad to Canada, Australia and the. US.

No 3 – Engineering

Once again, the new government has committed to extra spending. This time £100b on infrastructure projects over the next five years. Excluding those in construction, the projects listed so far include:

  • Full-fibre Broadband
  • Northern Powerhouse
  • Battery Gigafactory
  • National Plug-in Network for Electric Cars
  • Rail and road upgrades
  • HS2, (under review)
  • HS3 potentially

In addition, there is also the third runway at Heathrow, completion of Crossrail, as well as Hinckley and Wylva nuclear power stations that need finishing plus significant rail construction projects.

In addition to this the demographics of the UK engineering market mean that there are a large number of engineers seeking to retire over the next 5-10 years. Annually we need an estimated 203,000 new engineers a year but according to the Institute of Engineering and Technology there is a shortfall of 59,000 graduate engineers in the UK. 

Their recent 2019 Skills and Demand in Industry report published in November 2019 is essential reading for Engineering recruiters that are serious about advising and consulting with their clients.

The report indicated that 53% firms are concerned that a shortage of engineers in the UK is a threat to their business.

The report also highlights that nearly half of companies (48%) report difficulties in respect of the skills available in the external labour market when trying to recruit, with only 20% expecting the supply of engineering and technical skills into industry to improve over the next 3-5 years

This represents a huge opportunity for genuine consulting recruitment agencies to work as trusted partners with your engineering clients to help solve these challenges and build long term and sustainable relationships.

No 2 Information Technology and Technology

 

Technology and IT will be the dominant sector for the foreseeable future due to the Industrial Revolution 4.0.

Moore’s Law which states that computing power doubles every 18 months or so and has been the big driver in the past fifty years. To illustrate this the number of transistors which fit into a microprocessor reached over 10 billion in 2017. It was under 10,000 in 1971. (Source Our world in data)

This rate of growth is slowing but technology is still advancing at a phenomenal rate due to the overall impact of computing power on other sectors. With quantum computers now arriving computing power is set to surge again.

 

Data however is now becoming the new power force that will drive us on to even greater productivity gains. 90% of the data in the world has been created in the past two years, a stat continues to be true year on year. (Source: Forbes magazine)

You will not be surprised to know that in a recent survey by the Royal Society they discovered of the 9.2m job adverts posted in the UK in a twelve month period 10% required data expertise.

So you will not be surprised to learn that Europe needs more 346,000 data scientists. IBM believe that data science will account for 28% of all digital jobs by next year and that these roles stay vacant for 45 days due to the lack of available talent.

“Machine learning, big data and data science skills are the most challenging to recruit for, and can potentially create the greatest disruption if not filled,” according to IBM’s The Quant Crunch report.

For recruiters this represents another huge opportunity to specialise in an expanding market which sees no end to the demand for the foreseeable future.

The other market for which demand appears insatiable is Cyber Security. According to ISC2 in their Cybersecurity Workforce study the global IT Skill shortage exceeds 4m. and in Europe it is 291,000.

Globally there are an estimated 2.93m Cybersecurity professionals including 289,000 in the UK and 805,000 in the US.

The importance of Cybersecurity was brought home to me this year when I was invited to speak on a platform of CIOs at Cisco Live in Barcelona on the Future of Work as well as publishing a blog: Future workforce demands paradigm shift in Talent Management.

 One of the speakers shared with us the statistic that the Global Cisco receive 1.2 trillion security events each day, 7.6 billion DNS requests and 47TB of internet traffic inspected. Whilst these are colossal numbers, I am delighted that Cisco employ a highly sophisticated team backed by the latest AI to protect themselves and us from these attacks.

The scale of these skills gaps in the UK and globally once again provide a huge opportunity for UK recruiters.

Finally if you are keen to learn more about the top 10 technical skills in demand for 2020 then CNBC recently published their Top 10 which includes; Python, React (web), Angular, Machine Learning, Docker, Django, CompTIA, Amazon AWS, Deep Learning and React Native (mobile).

No 1 Construction

For 2020 I am tipping the UK construction sector to be the fastest growing sector of the UK. My reason and logic are simple. In Q3 (and I believe Q4 will be similar) there has been a slowdown in construction sector output.

Recent ONS figure point to a 0.3% contraction in the third quarter but a 2.3% decrease in October alone. Working with several recruitment clients across this sector and in discussion with agency funders and construction material providers it is clear that Q4 has continued the downward trend. The REC/KPMG Jobs report published in December quoted demand for construction staff as showing a “marked fall in demand for temp staff.”

The reasons for this was political and economic uncertainty caused by the delays over Brexit, the general election and a lack of inward investment couple with a reluctance of developers to commence projects.

The great news is this uncertainty is over. Whatever your personal political views what is clear is that we have now clarity on Brexit and a stable government so the noises are positive. Already I am hearing of significant increases in demand for both construction staff and materials orders for January 2020. It is highly likely that we will see a shortage of roofing materials and bricks again as we approach the middle of 2020 so expect builders to start work early.

In addition to the release of this pent-up demand the new UK Government has committed to spending huge amounts of money on construction infrastructure some of which will be in £100b we mentioned earlier under engineering. In addition to construction projects already mentioned the government has committed to building 1m new homes over the next five years. So far in 2018/19 240,000 houses have been built. This is the highest figure for over 30 years and shows the government’s commitment to solve the housing crisis that has blighted the UK for over a decade now. Whilst there remain issues over green-belt usage with an 80 MP majority the government should have the political resolve to tackle this.

In 2020 we expect the demand for construction staff to rise rapidly from Q1 to Q2. With Brexit and the return of many foreign workers back to continental Europe there is going to be a critical skills shortage. According to the ONS 8% of the UK Construction workforce of 3m are from the EU. This will put undoubted pressure on rates and see many construction firms struggling to complete projects.

The final factor which is affecting the demand for staff is the rapidly ageing construction workforce. Over 20% of tradespeople are over 50 with 15% over 60. This is quite a worry as we embark on a decade of growth and infrastructure expansion.

There is more good news for Construction recruiters as wage growth between 2018-19 rose 8.5% well above the national average due to demand for staff and skill shortages.

We expect the following to be the most critical skill shortages:

    • Brick Layers
    • Electricians
    • Scaffolders
    • Tele-Handlers, 360 and dumper drivers
    • Quantity Surveyors
    • Site Managers
    • Ground Workers

Our advice to all our construction agency clients is secure your workers as in 2020 those that have the workers will be the winners in this battle for skilled labour.

IR35 The Curved Ball

We are delighted to hear that the new government has promised to review the intended changes to the way the HMRC operate IR35 that are proposed to take effect in April. At a time when the government is seeking to inject some growth into the economy and launch a programme of capital expenditure and infrastructure upgrade we need as many of the professional engineering, technology and construction skills Britain is famed for. With the huge global skills gaps outlined already it would be potential suicide to give impetus to the growing trend of our workers to travel abroad.

Already there are large recruitment initiatives being launched by Middle East construction firms to raid the UK for skills. Many of the US and Canadian firms are eyeing the opportunities to temp our workers to North America and let’s not delude ourselves our EU partners also see the rich picking that can be made from poaching our skilled workforce.

The IR35 effect on our predictions could hugely impact our forecasts should the UK government carry on with the implementation  though with the Construction Industry Scheme (CIS) this should see many workers staying here but our Engineering, IT and Energy workers will be tempted to leave our shores for the 30-50% premiums they will be able to make even after expenses from working outside the UK.

2020 Outlook

We are extremely positive for 2020 and look forward to further reflections as the year progresses. We would however be delighted to hear your thoughts too.

Copyright Selling Success 2019

 

 

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].

Top Recruitment Sectors for growth in 2019

Top Recruitment Sectors for growth in 2019

We are now into our sixth year of this blog series since first writing our amazingly popular blog post Top 5 Recruitment Sectors to be in for the next 5-10 years. With over 25,000 views this remains our most popular blog post ever.

Our annual blog has become almost as popular and with huge uncertainty in the UK, Europe and Globally we expect this year to be no different

In 2012/3 when we made our prediction for Top 5 Recruitment Sectors to be in for the next 5-10 years the top five were:

  1. Information Technology
  2. Engineering
  3. Energy, Oil and Gas
  4. Healthcare
  5. Emerging Technology application

We think it is safe to say that anyone who went into these sectors in 2013 would be very happy with their decision. Only Oil and Gas in the energy sector has seen any major issues with “renewables” now becoming the major area for growth in this sector.

UK and Global Economic Dynamics

As with previous years it’s important for us to outline the economic climate we are basing our predictions on. With the UK less than thirteen weeks away from leaving the EU and with no certainty of the agreed route of exit, or even if Brexit will actually happen, the future is very uncertain.

Remarkably the UK economy is proving highly resilient and GDP growth this year is still projected to be 1.2%. We believe that once the Brexit future becomes clearer we will see growth return to 1.6-1.9% later this year, as We see companies currently holding off investment until the medium term future become clearer.

In the EU growth in Q3 of 2018 in Germany and France surprisingly started to falter though still above the UK.

In the US and the rest of the world uncertainty remains over trade with China which has seen some economic slowdown in both Asia and America. We believe that despite Trump’s confrontational style of negotiating a deal will be done and we will see growth in these regions return. The IMF currently predict the US GDP will grow 2.6% and China’s GDP 6.2% in 2019.

For more details check this article from the Guardian Newspaper UK economic growth tipped to be slowest in Europe next year

Global Recruitment Thought Leaders

This year we have launched Global Recruitment Thought Leaders (GRTL) which is an original initiative that investigates the future of work and the future of talent recruitment.

The GRTL project is pioneered by myself, a global influencer, business expert, employment futurist and owner of growth consultancy Selling Success; and San Sunner, the founder of REC- Social, a social media management company that focuses exclusively on the talent recruitment sector.

The world of work as we know it is being transformed by the exponential growth of revolutionary technology and considerable shifts in workforce demographics. In order to remain competitive in this modern era businesses need to remodel their company culture and approaches to leadership, implement contemporary tools, and foster environments that keep up with the times and create value. As a result, business leaders and their recruitment partners face considerable challenges adjusting to this future reality.

GRTL sets out to explore the new paradigm and dissect its impact on the future talent landscape through in-depth discussions with industry leaders across a variety of sectors. The purpose is constructive debates, informative interviews and knowledge sharing with global thought leaders will provide an innovative hub for business owners to assimilate fresh ideas in preparation for the future.

As a Top 10 Global Influencer our MD, Ian Knowlson is very optimistic about what the future holds explaining that “technological advancements possess the potential to help us solve many of the major issues facing mankind in the twenty-first century such as cheap sustainable energy, global skill shortages, an aging population, food and water security, inequality, lack of economic and employment opportunity and climate change.”

With speculation about automation and artificial intelligence rendering people as inadequate for work in the future, business leaders need to take ownership of the narrative and be clearer in terms of their communication about prospective plans and objectives.

The introduction of the GRTL video series delivers a knowledge base that helps all business stakeholders to understand and adapt to the changing landscape, while firmly positioning themselves for long term success!

To find out more information about Global Recruitment Thought Leaders and journey into the future world of work and talent recruitment visit www.globalrecruitmentthoughtleaders.com

Top five sectors for high growth in 2019

A businesswoman is holding the 2019 year numbers inside the night city image picture with distinct wireless connections above.

No5 Construction

For 2019 we have placed the construction sector below the level we would typically rank it due to Brexit uncertainty, but it is still in a healthy state and represents a great sector for recruiters.

There remains a huge shortage of skilled trades people such as bricklayers, electricians and scaffolders to name but three; and in the professional/technical niches quantity surveyors remains one of the hardest skills to source in the UK across all recruitment sectors.

These skill shortages are expected to continue well into the next decade so the medium to long-term outlook for the sector is healthy. In 2018 the Chartered Institute of Building (CIOB)

37339383 – construction site, workers and cranes.

reported that the industry will need to find 157,000 new recruits by 2021 in order to keep up with demand. A forecast also in 2018 from the Construction Industry Training Board (CITB) revealed that over 150,000 construction jobs are set to be created over the next five years, with 15,350 carpenters and 9,350 labourers needed. There will also be a significant growth in a range of professional and managerial roles.

The recent IHS Markit/CIPS UK Construction Purchasing Managers’ Index published in January 2019 indicated “An expected boost from transport and energy projects underpinned a rise in business optimism to an eight-month high in December. Construction sector confidence was also helped by softer input cost inflation and signs of a turnaround in supply chain difficulties from the low point seen last August.”

Tim Moore, economics associate director at IHS Markit, is on record as saying, “levels of optimism remained subdued in relation to those recorded by the survey over much of the past six years, largely reflecting concerns that Brexit uncertainty will continue to encourage delays with decision-making, especially on commercial projects.”

It’s fair to say that but for Brexit we would have ranked this as third in out of the top five sectors for growth this year and it still may end up there if the Brexit issues resolve themselves quickly.

No4 Healthcare

With an ageing population across most of the industrialised world healthcare recruitment is tipped to be one of the top five recruitment sectors for the next decade or so.

The announcement this year of the UK government’s 10-year investment plan of an extra £20b a year by 2023 for the NHS will not immediately flow through to staffing. It is impossible to see, however, that we will not see an increase in demand for both permanent and temporary staffing requirements. What these will be, in terms of the types of staff and the impact of new procedures, technology and processes are also unclear.

57911846 – a motion blurred photograph of a senior female patient on stretcher or gurney being pushed at speed through a hospital corridor by doctors & nurses to an emergency room

What is clear is that all the dials point to with increases in populations, there will be increases in demands for services across virtually every sector with maternity care, mental health, elderly support and earlier detection and prevention of diseases ear-marked for extra investment.

Unless productivity is massively increased by the application of new working practices or technology, the numbers entering employment through huge increased training investment, or massive inward migration into the UK, the skill shortages which currently pervade the NHS are not going away in either the short or medium term.

This means the opportunities for existing suppliers or new entrants remains good. The opportunities for technology providers to support the NHS where new skills such as AI, Automation, Machine Learning and Big Data which are not normally recruited is huge. The challenge here will be to meet the demand in the NHS within their rigid pay bands when the private sector are already paying huge skill premiums themselves.

There is clearly a massive gap and demand opportunity here. Perhaps a creative collaborative solution can be found between the university/training sector, NHS Trusts and the agency providers, which helps to bridge this demand.

We would be hugely interested in meeting and interviewing anyone as part of our new Global Recruitment Thought Leaders video series who has ideas around this.

No3 Engineering

The top three positions are very close with us ranking Engineering in third place purely due to the delay that has occurred with some capital projects due to Brexit uncertainty.

Nevertheless the overall demand is still very high.

In the UK the engineering sector employees 5.6m people — a rise of 5.1% in the past five years. Engineering generates 23% of GDP and has an accelerator effect on the UK economy, as every time a new job is created in engineering 1.7 jobs are created elsewhere in the economy. (Source The state of engineering Key facts 2018) Over 27% of enterprises are in engineering so the sector represents a significant part of the UK economy.

18124171 – two workers at tool workshop

Engineering UK estimate that the economy requires 124,000 skilled engineers to meet existing demand and a further 79,000 engineers to meet demand from new industries and technologies making a demand for 203,000 engineers per year.

Unfortunately we have an annual shortfall of 59,000 engineers so there is not surprise that 46% of employers report recruitment difficulties.

In essence we need more engineers as a nation and with Brexit looming this is becoming a crucial skills gap that we need to address.

It goes without saying that this sector is set for a sustained growth for the next 3-5 years.

The recent KPMG/REC Jobs report indicated that Permanent Engineering demand was the highest alongside Accounting and Finance jobs, which we ranked at No 6, just outside our Top five due to Brexit uncertainty.

Temp/Contract demand was high as employers sought to fill their resource gaps with temporary labour.

No2 Energy, Oil and Gas

This is the first time this sector has made our top three for over eight years due to the oil price which has been so volatile; but the stabilisation of the oil price above the magic $50 a barrel now for over 12 months is seeing a healthy level of investment in the sector, if not in the UK.

Whilst this is not fuelling a jobs boom a dramatic rise in demand for renewables and nuclear in China, the UK and Europe has seen a tremendous demand for skills across this sector.

28354127 – engineers on building site checking plans

Renewable energy capacity in the UK has more than tripled in the past five years and in 2018 overtook fossil fuels for the first time ever.

Between July and September 2018, the capacity of wind, solar, biomass and hydropower reached 41.9 gigawatts, exceeding the 41.2GW capacity of coal, gas and oil-fired power plants. This would have been unthinkable a decade ago and the rate of growth of renewables means this is expected to continue.

Imperial College London, which compiled the figures, stated the rate at which renewables had been built in the past few years was greater than the “dash for gas” in the 1990s. Dr Iain Staffell, who undertook the research, said: “Britain’s power system is slowly but surely walking away from fossil fuels, and this quarter saw a major milestone on the journey.” The Guardian carried the story and further data is available in their article published in November 2018.

Renewables therefore now produce more than 20% of the UK’s electricity, and EU targets means that this is likely to increase to 30% by 2020.

According to Deloitte “a record 4.9 GW of offshore wind came on line in 2017 across 15 countries, bringing the total capacity to 19.3 GW, mostly located in the UK, Germany, China and Denmark. Offshore energy has reached parity in Germany and Denmark and is projected to do the same in the UK between 2025 and 2030.”

So you will not be surprised to hear that there are huge skills gaps emerging across the sector with over 80% of hiring managers reporting skill shortages as being their number one obstacle to continued business growth in 2018/19.

The Energy & Utilities Skills Partnership, a body made up of 29 leading organisations in the sector, has noted that an estimated 221,000 vacancies will need to be filled in the next decade, brought about through the retirement of 100,000 employees and 90,000 workers leaving to find new roles.

Interestingly enough, according to Taylor Hopkinson Skills Shortage Report the top three countries globally for vacancies in the sector are the UK, China and the Netherlands.

We may not be conventional in our thinking but we believe that in 2019 recruitment agencies operating in this sector will be amongst the fastest growing in terms of revenues, margins and profits; and given that the UK is probably amongst the richest nations in the world for offshore energy opportunities we see the medium term future for this sector as very positive.

No1 Information Technology

When we started writing these blog posts six years ago the term Information Technology and the sector were quite distinct and discreet but today technology pervades all our lives, environments both work and domestic and every profession and walk of life.

This sector is and will continue to be for the next two to three decades the one which will see the greatest skills gaps and the largest opportunities for recruitment agencies to grow in.

There are estimated to be in excess of 600,000 unfilled technology sector jobs in the UK according to the Edge Foundation and this is expected to continue growing at 12% p.a. up until 2024.

A recent study by Spiceworks State of IT where they surveyed 1,000 tech professionals across North America and Europe indicates that the two main drivers are Cyber Security and Artificial Intelligence. This is a great report and well worth a read.

With this in mind we believe the most acute skills shortages in 2019 are likely to be in the following areas:

Cyber security

Cyber security is now in such high demand that experts predict that the global market will be worth $165.2bn by 2023. New research by (ISC)2  puts the global workforce skills gap at 2.93 million with roughly 142,000 in Europe and 500,000 of those positions located in North America.

In the UK Cyber security talent requirements have soared as a result of several high-profile hacks, as organisations demand long-term defence against cybercrime and the annual requirement for permanent and contract IT security professionals has increased by 46%, according to the latest Tech Cities Job Watch report from Experis, the global leader in professional IT resourcing.

Data Scientists

For the past three years Data Scientist jobs have been named by Glassdoor as the No1 sought after skill in the US. In Europe it is estimated that the skills gap is 346,000 jobs with the European Commission estimating that a further 100,000 new jobs will be created by 2020. In addition IBM estimate that data scientists will account for 28% of all digital jobs by 2020.

Essentially there is clearly a huge growth opportunity for recruitment agencies to support this sector over the next few years.

Artificial Intelligence/Machine Learning

Gartner is predicting that by the end of 2019 AI will be creating more jobs than it is taking. They indicate that whilst 1.8m jobs will be lost with manufacturing taking the biggest hit, 2.3m jobs will be created through automation in education, healthcare and the public sector.

Full Stack Developers

According to Indeed Full stack developers are among the most in-demand by employers right now in terms of open job postings. Demand is up 600+% over the past three years..

DevOps Engineers

These are rapidly becoming one of the top skills globally with Glassdoor naming them as No2 job in 2018 in the US and with everything moving towards the cloud there seems no let up in demand for these skills.

Python Developers

It’s hardly surprising with the explosion in demand for AI that demand for Python Developer skills going through the roof. Python is now the fastest growing programming language and we see in 2019 an acceleration in demand for Python.

Java/JavaScript Developers

Growth of Cloud technology and solutions mean that demand for Java and JavaScript will continue to grow in 2019. Data from Glassdoor, Indeed and CWJobs all point to this being another growth skill area in 2019. The JavaScript demand is being fuelled by corporate enterprise environments that have a demand for the delivery of compelling interfaces.

2019 Overall Outlook

The outlook for the recruitment sector overall is positive despite the trials and tribulations in the UK caused by Brexit.

In December 2018 the Recruitment and Employment Confederation (REC) annual report indicated that the UK sector is worth nearly £36 billion and is projected to grow in 2019 by a further 4% and 5% 2019/20.

Businesspeople are standing in front of large world map.

“The number of businesses operating in the UK recruitment industry grew by almost 10 per cent in the year to March 2018, totalling 30,430, and the industry employed approximately 115,000 people”

Other figures from the 2017/18 report include:

  • Almost two thirds (64 per cent) of temporary assignments were for 12+ weeks, while one in five (20 per cent) were for 6+ months (compared to 61 per cent and 20 per cent respectively in 2016/17)
  • 85 per cent of contract placements were for 12+ weeks, and 45 per cent of contract workers were on assignment for 6+ months (compared to 80 per cent and 44 per cent respectively in 2016/17)
  • The average value of permanent placements from the wider recruitment industry was £4,238 (up by 6.4 per cent on the average in 2016/17)
  • The average annualised turnover of each temporary/contract worker on assignment was £34,976 (up 20 per cent on the average in 2016/17)

We also see positive signs from the 20-30 clients we work with that the recruitment sector overall is positive and provides a significant contribution to the record employment levels that exist in the UK today.

It may be controversial but we have almost full employment in the UK with record skills gaps in virtually all professional and skilled sectors of the economy.

We appreciate that the large numbers of unskilled people in the UK needs addressing, but compared to the economic challenges that many of us faced during the recessions of the 1980s, 90s and 00s, the outlook is extremely positive.

Top 5 Disappearing, Resilient and Emerging Careers 2020-30

Top 5 Disappearing, Resilient and Emerging Careers 2020-30

Everyone is aware of the 4th Industrial Revolution, which is transforming the future of work and by implication the future of talent recruitment but how important is this?

Is this happening now?

Whilst much of the UK is absorbed in BREXIT paranoia, which will disrupt the economy as well as create some economic opportunities few are considering the impact of 4th Industrial revolution on their own recruitment careers, sectors and businesses.

In our recent blogs; Future of Recruitment 2020-2030 – Your Future Starts Today and Future of Recruitment – A Shifting Paradigm for Recruiters  we have highlighted the impact on the UK recruitment markets and the sectors most at risk.

In addition we have highlight the threats to recruiters as well as the opportunities this creates for people over the next 3-5 years.

4th Industrial Revolution – Is it happening now?

The simple answer is yes; it has started. The changes currently are mild and the impacts slow but the direction of travel is there to see.

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To learn more about how to navigate to this new recruitment paradigm click here to read our blog on:

Future of Recruitment – A Shifting Paradigm for Recruiters