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Recruitment activity in the north east
25-Jan-16
The recruitment and employment confederation (REC) published a report in January stating the level of growth the recruitment sector has seen over the last 12 months. The report showed record breaking levels of turnover at £31.5 billion, with high single figure growth for the second consecutive year. Of this the temporary and contract sector made up £28.5 billion with a further £3 billion from permanent business activity. 2016 looks to remain in positive territory with the OECD and CBI independently predicting national growth levels of 2.5% and the British Chamber of Commerce (BCC) suggesting growth of 2.6%.
This growth will help stimulate increasing revenue within the recruitment industry, with the REC forecasting industry turnover to increase by 8.1% by the end of 2016, and a further 6.5% by 2017. This is welcome news indeed with the recruitment industry a true bellwether of economic activity and confidence.

It is well known the North East of England is often a prime target for criticism in regards to levels of employment. The office for national statistics survey (ONS) produced a report in November, the report showed the unemployment rates in the North East to be 8.6% at the end of 2015. This is significantly higher than the national average of 5% and is one of the few area of the country which is still rising. Clearly events in 2015 such as the continued oil and gas industry scale back, steel industry decimation and associated supply chain effects and the axing of a £1 billion competition to develop green carbon capture and storage (CCS) technology, which threatens the Teesside Collective plan to develop Europe’s first ever CCS network are underlining the stark differences at a regional level.

What does the 2016 picture therefore look like for the North East of England and in particular the prospects for the North East recruitment industry? While turbulence will continue to be felt from the impact of oil price volatility, many commentators believe 2016 will see the bottom of the curve. Other positive announcements suggest the future looks bright, such as Nissan expansion, Hitachi approaching start of production, Globally recognized Fintech innovator Atom Bank fast approaching go-live and a thriving digital hub which continues to go from strength to strength  - there are many reasons to remain optimistic.

In the last year, the rate of job creation in areas such as the North East (4.8%) and Leeds City Region (4.0%) was more than double the national rate of 1.9%, suggesting momentum is building. At a transactional level, GEM Partnership divisions are entering 2016 with high levels of demand and a strong pipeline of new business opportunities, mirroring national observations around access to talent becoming the key risk to growth continuity. Activity levels with Contact Center clients is unprecedented, IT continues to show significant traction across a broad range of disciplines and public sector framework agreements showing early signs of positive momentum.

Although there is macro level uncertainty as we enter 2016, particularity around issues such as the UK continued membership of the EU which will no doubt undermine stability around hiring intentions here in the region and at a national level, and HMRC legislation changes due to come in to force in April which will shift the landscape for temporary workers and interim professionals, cautious optimism is how our industry approaching the new year. Skill shortages and access to talent remains the dominant factor, which will no doubt continue to drive growth in services despite regional differences.


To read the article from the REC, click the link below 

https://www.rec.uk.com/__data/assets/pdf_file/0010/276058/Recruitment-Matters-January-2016.pdf