What Does 2021 Look Like For Recruitment Agencies?
...Well, it certainly cannot be any worse than 2020!!
As I deal with a large number of recruitment companies from all sizes and shapes I thought I would give you my personal opinion of what 2021 will look like for those companies and a few tips of what they should do now to be fully prepared for what is going to be one of the toughest years for a long time.
Recruitment companies were hit particularly hard in the first lockdown and many of the larger agencies embraced technology to ensure they did not suffer too much with their teams working remotely. Some agencies took this as an opportunity to review their tech set up and embrace cloud technology and invested their bounce back loans and grants to make the company more efficient and leaner ready for when the economy reverted back to some sort of normality in 2021.
TIP 1 – Make sure your technology is fit for remote working and efficient for the new norm working remotely and in the office
I have had conversations with as many recruitment companies as possible to make sure they have prepared their financial forecasts for 2021 as without these it is going to be impossible to know the financial impact on the business if the business goes into a 3rd lockdown or hopefully the economy gets back to normal and the company is very busy and needs cashflow to deal with the increase in business. This will then highlight if you need to top up your bounce back loan to a maximum of £50,000 or need further finance using the CBILS scheme. It might even be that you have taken these loans out but actually do not need them and can repay them prior to the repayments starting with no penalties. You also would want to know if you can afford to pay your deferred VAT and personal tax liabilities or whether you need to contact HMRC to agree a payment plan.
TIP 2 – Prepare your 2021 financial forecasts so you know what cash requirements are needed.
The dreaded IR35 problem has not gone away and now it is in stoned in legislation it is going to happen from April 2021. If your agency deals with contract staff then you need to review your IR35 procedures to make sure you are compliant and have informed your contractors who work via a limited company whether they are caught by the new IR35 rules.
TIP 3 – Review all your contract staff and make the changes now rather than wait until April 2021.
Do you need to look at new markets next year if you have been hit hard in your specialist sector? A few recruitment companies in the hospitality sector have had to re invent themselves and look to get into new markets quickly. Do you need to look at backup markets or invest in a management team in a sector that gives you flexibility and coverage in case your market suffers again? Do you trade in Europe and need to be Brexit compliant or is this an opportunity to take advantage of?
TIP 4 – Are you satisfied that your market of expertise will not be hit again by a lockdown or adversely affected by Brexit?
Is your team burnt out working remotely as I know recruiters thrive from team interaction and work best as a team? How can you help them work better in 2021 considering their mental wellbeing and get the best out of them whilst making it fun for them.
TIP 5 – Put support programmes in place to make sure the team are as productive as possible and maybe set up a wellbeing team to deal with any personal issues that could affect their productiveness.
If you need any further Recruitment advice, please don't hesitate to get in touch with us today.