2020 is no doubt going to be an interesting and busy year in the recruitment sector. The proposed expansion of IR35 legislation into the private sector in April, along with the good work plan, AI and tech advances and the increased awareness of mental well-being in the workplace will all play out against a macro economic background dealing with Brexit and increased unsettlement in the middle east.
IR35 changes will no doubt have an impact. Although the government announced it will review the legislation and provide additional support, it can be expected to come into force in April. It’s therefore important for agencies to be advising both clients and contractors of the changes and what is required. By directing clients to the Government CEST tool or using other providers that can give some clarity and potentially insurance cover (although many reputable companies providing this service are already at capacity up till April) as to the status of the role, you can reassure your clients of what’s required and the solution and that business in many cases will continue as currently.
If a contractor is deemed to be inside IR35 then PAYE options like Umbrella will provide an answer, though it’s likely that there will be upward pressure on pay and charge rates to compensate the worker for the reduction in take home pay.
There will be a risk of blanket assessments but hopefully most end clients steer away from this approach or they may risk opening up opportunities for competitors to attract the legitimately self-employed contractors by undertaking an assessment on each assignment.
The changes may impact overall demand for contractors and will add the distraction of clients having to consider this legislation which may delay or affect recruiting decisions, but experienced, knowledgeable recruiters can provide reassurance and options and no doubt gain some advantages over their less prepared competitors.
The good work plan will require agencies to inform their contractors of the possible deductions they may face when working through the various payment methods such as umbrella or PAYE. This should be a simple requirement to meet and back office partners will adapt their service to assist with meeting this legal requirement.
Throughout the 25 years I’ve worked within the recruitment sector, technology has been predicted to either replace humans in the recruitment sector or dramatically reduce the role and volume of consultants. AI will no doubt play a large role in the sector, and savvy recruiters will adopt many aspects but in the short term at least, it is likely to only be used to improve efficiency rather than replace experienced recruiters.
Pressure of the increasingly demanding work culture in the UK is one of the top challenges being faced by employers regarding the mental health of their work force. Working longer hours, thinking about work outside of work and neglecting home life are major factors as to why one in six of us will experience a mental health problem each week. As an employer promoting ‘working smart’, monitoring employee’s work load and offering support services during office hours are a few ways to combat the issues being faced and create a healthy working environment.
The decisive outcome of the election, confirmed in the subsequent vote in Parliament last week, makes our exit from Europe now more certain which, regardless of your side in the initial debate, will give some clarity to business and hopefully remove the indecision which can delay hiring decisions within companies. We have supported many agencies placing contractors throughout the EU so we must hope that any deal that is negotiated over the upcoming months allows innovative UK recruitment companies to continue to place high quality workers and trade throughout the EU without any restrictions.
Ultimately 2020 will provide many challenges but with an economy with plenty of skill shortages, highly skilled, highly niche recruiters can still expect a busy time and will have plenty of roles to fill.