Preliminary data from the fallout from Brexit shows uncertainty in the UK employment market. But look more closely at the figures and you’ll see a more complex picture. What Nanci Stanger of Stanger Kirkwood suggests in this blog post is that we find an unnerving caused by the psychological impact of the vote itself, rather than the country’s literal departure from the EU, which of course hasn’t happened yet. Brexit reminds us that we are in a people fuelled sector, and as recruiters – the very people who help businesses fill roles and put people into jobs – confidence in the market begins at home.
Unsettled sector
Earlier this month, Stanger Kirkwood wrote that post Brexit, the real inquest into UK employment data could now begin. Initial confidence surveys conducted after the vote pointed to uncertain times ahead. A survey of 1,000 business leaders for example carried out by the Institute of Directors shortly after the event, showed that more than one quarter planned to freeze recruitment as a result of the vote.
Indeed, the decision on whether to leave or remain in the EU was already having an impact on the recruitment sector before a single vote was cast. The Report on Jobs is a monthly publication produced by Markit and sponsored by the Recruitment and Employment Confederation (REC). The final publication issued before the Referendum showed that the rate of expansion in the recruitment sector had already eased to its slowest since September 2015. But we need to be very clear here: expanding it still was, and perception can be very different from reality.
Unmoved markets
As far as the financial markets go an initial downturn has been redressed. The FTSE hit its highest mark in a year earlier this week, and the UK economy expanded by a reported 0.6% in the second quarter of this year. The FTSE 250, held by many analysts to provide a more accurate interpretation of what’s going on in ‘real’ business in the UK, has now also recovered its preliminary losses.
Some fascinating data was released by Deloitte earlier this week, showing that while employment confidence is down, UK employment rates have continued to rise. The UK unemployment rate currently stands at 4.9%, the lowest since July 2005, according to official figures from the Office of National Statistics. In other words, it highlights in full the discrepancy between the perceptions and the realities surrounding the industry. And it may well be that the market pulls back from this figure slightly in the next set of – post Brexit – figures. But as we have seen in the financial markets, a short downturn followed by the resurgence is at this stage equally as likely.
Candidate & company confidence
The key is to remain proactive, and to focus on the actual raw data rather than the qualitative noise around it. In times of economic uncertainty candidates can lose confidence and stop proactively looking for roles, companies can submit to the temptation to reel people investment back, and existing employees are less inclined to change jobs. It’s a people business. But as recruiters we have a responsibility to the people within that business – candidates and companies alike – to ensure that we operate on what the figures are telling us about the market around us, and not the conjecture surrounding it. Calm, proactivity and confidence are now key, to ensure that the post-Brexit blues do not turn into an economic reality.
