Take Me On? The Job Market In A Recession

The state of talent pipelines in lockdown, recession and beyond

It’s official: the UK is in its first recession – defined as two consecutive quarters of economic decline – since 2009. As the economy shrinks, the impact on the job market is clear. According to The Growth Company, overall job postings on Indeed were down 57 per cent between 1st Feb to 24th July compared to last year. Many organisations have placed staff on furlough, instituted recruitment freezes, and found ways of reducing their outgoings. Cash is key in a crisis.

But what do these circumstances mean for the next generation entering the workforce, the future strength of our economy, and the state of talent pipelines over the next few years? Disruption North spoke to Tom Renn, Managing Director of Bruntwood SciTech – Manchester, for his thoughts.

The cool down

Times may have been hard for many companies, but as in every economic downturn, there are winners and losers. In lockdown, e-commerce companies boomed as we were all restricted to buying online – the same can be said for streaming platforms, home fitness, and food and drink suppliers.

“Those companies that can deliver to door generally did well during lockdown,” Renn says. “Certain sectors saw five to ten years’ worth of sales penetration in four months, as their customer base adopted digital sales models. Organisations that did well during this time are still hiring – for example there are still a lot of jobs being advertised in the Manchester region. In the last week of July there were between 16,000 and 17,000 lives vacancies in Greater Manchester on the job search engine Adzuna.”

All aboard

When it came to hiring during this period, one of the biggest challenges was onboarding new staff during lockdown. Remote working might be relatively easy for established teams, but are strong work relationships easy to cultivate online?

“One of my favourite conversations recently was with the CFO of one of our biggest technology companies,” Renn says. “They’re in the gaming sector, which saw huge growth during lockdown, and they were really productive throughout this time. The reason why? Because the foundations of their culture were laid before lockdown, the bonds were already there.”

“When you bring someone in to the team remotely, trying to foster those connections is a challenge,” Renn continues. “It’s not like having a cup of tea in the kitchen, or meeting someone from a walk around the office… This has definitely been something that all companies have struggled with. Lockdown hasn’t been a reason to put off key hires, it’s just harder to develop those relationships.”

This has implications for the role of the office building in future, as a physical location for fostering company culture and collaboration. Many organisations are currently rethinking the role of their offices – but it’s difficult to see how they could get rid of them completely.

Following the pipeline

Even as some companies continue to thrive and grow during this difficult time, the road ahead looks rocky for the UK’s economic future. Joblessness and redundancy rates – held off by the government furlough scheme – will increase, there will be more barriers to entering the workplace, and existing talent pipelines will be affected.

Renn has concerns around the Higher Education sector in particular.

“The UK’s talent pipelines will be disrupted for years to come,” he says. “HE is facing huge challenges, especially in terms of international students. Although reputationally nothing has changed, there is a host of practical considerations related to covid-19. Can students travel here safely, are their families happy to send them abroad when, in the event of another hard lockdown, they will be completely isolated? Add to this the significant cost of international fees, and it’s likely that in the very near term international students will defer or study in their home countries, a situation we desperately hope can be avoided.”

Fit for purpose

In order to create the workforce of the future, government and private sector businesses need to ensure that the talent pipeline is fit for the digital age, as well as flexible enough to accommodate people with different skill levels, priorities and needs.

Those in low paid work (typically women, young people, people from black or minority ethnic groups, and those with lower qualifications) are disadvantaged in the labour market compared to higher paid workers, and have already seen employment levels drop. How can we ensure these people are not left behind?

“Across the country we need new models to reskill people who have typically been seen as low skilled, and give them opportunities,” Renn says. “Our next project is a vocational training centre for industry 4.0 skills, there are also institutions such as Ada, the National College for Digital Skills, and private organisations like Northcoders.”

“We want to tackle BAME inequality, social inequality and support inclusive growth through new educational pathways,” Renn adds. “The model needs to accommodate short reskilling programmes – a few weeks to a month long – as well as the more traditional, longer schemes.”

Renn also expects to see an increase in apprenticeship programmes across the economy, as employers look to support different pathways into employment, and not just necessarily target university graduates.

“I’m hopeful that some of these programmes and models that were brought in as a result of the pandemic are things we needed to do anyway. Having a diverse pathway into great opportunities is much better for the UK,” he says.