By Sue Farmer, Head of Recruitment Finance at Bibby Financial Services (Corporate Members)
As the country prepares to face its most significant national event since the Second World War, we could be forgiven for thinking that Brexit is the only situation that matters. Whilst the nation prepares and debates its future, there are significant changes happening at a regional level which will also impact the way people move and work. None more so than recruiters.
A recent study by Grant Thornton[1] found that less than a fifth of university students in the West Midlands are choosing to live and work in the region after graduating, arguably having a significant brain drain on the local economy, as graduates follow the national trend of moving south for employment opportunities.
The UK’s growing skills shortage also remains a significant challenge, and one that shows no sign of abating. Our Q2 SME Confidence Tracker found that 66% of small and medium sized enterprises (SMEs) in the West Midlands are facing skills challenges that threaten business growth, with 28% of SMEs in the region struggling to recruit candidates with trade skills specific to their industry (e.g. brick laying and plastering). Meanwhile, 25% also cited a lack of digital and IT skills as a barrier to expansion, inevitably placing pressure on recruiters to find an alternate solution.
But despite the short fall in graduates and the skills-gap the regional economy is performing strongly. According to the Office for National Statistics, the West Midlands tourism industry is booming and attracted more international visitors in 2017 than ever before. The region is also set to receive a £1.5bn "Games Gift" from the 2022 Commonwealth Games which will no doubt create new job opportunities and increase the demand for labour.
Despite some positive developments, SMEs in the region are somewhat cautious. Our Q2 SME Confidence Tracker reinforced the fact that sentiment has been subdued, with only 30% of West Midlands SMEs expecting sales growth in Q3. However, SMEs based in the region would do well to heed the positive news that the West Midlands economy is in a strong position and this sentiment will lead to opportunities for recruiters and employers alike.
It is very likely that recruiters in the region will continue to experience pressure from clients to fill job places. In fact, according to TotalJobs.com, half of employers say that skills shortages will be made worse by Brexit. However, this also presents an opportunity for recruiters to position themselves as a supporter of SMEs and gear up for a recruitment boom in the years ahead.
This is where finance, specifically tailored for the recruitment sector can help tackle increasing client demand. Recruitment Finance is an integrated funding and payroll service for UK recruitment and staffing agencies. It is designed for those that primarily place candidates on temporary or short-term employment contracts in the UK and Europe.
It helps by providing upfront cashflow against client invoices and automating complex and time-consuming back office administration. At BFS, one of the key benefits of our own Recruitment Finance product is that timesheets are uploaded and funded within one week and can be completed via either desktop or mobile. We also handle all the legalities and complexities involved. For recruiters to get ahead of the economic curve, they need to make sure they can service the needs of their clients, and this requires steady cashflow and efficient processes such as these.
If the West Midlands is to be ready for the positive developments in its economy and the ever-expanding skills shortage, it requires specialist recruiters that can source and place candidates in roles. To do this, it is critical that such businesses have enough cashflow and support services in place, enabling them to consistently deliver for their clients amid the challenges of a changing regional economy.
If you are looking to hire export specialists in preparation for Brexit, take a look at the Institute's jobs board.
