The impact of the COVID-19 crisis has been felt by businesses across the globe.
From the tragedy of the virus itself to the ripple effects on the economy, both employers and employees have been forced to rethink and readjust to a fast-changing climate.
In April, we began tracking how employers and their teams were responding to the crisis with the launch of our industry barometer. Of course, a lot has changed in the short space of a few months.
As guidelines have shifted in accordance with the latest developments, our findings from June reveal evolving trends from initial concern through to recent growing optimism amongst business leaders, hiring managers and employees across the UK.
Although fears of a second wave make for more uncertainty, businesses and individuals are thinking creatively to adapt to the evolving crisis, and the outcome has so far proved positive.
But what can we expect from the months to come?
A welcome leap forward in business performance
Looking back to April, as lockdown measures continued and uncertainty thrived, 35% of respondents reported a significant downturn in business while only 7% saw an upturn. This was to be expected, considering the lack of clarity as to how the country would handle the crisis in the months to come.
More than anything, employers tried to remain realistic about the potential events that could unfold and how they could impact their bottom lines as we responded to the crisis.
But in May, we began to see welcome signs of green shoots appearing in the number of businesses citing an upturn. The struggle continued, but business persevered as measures taken to slow the spread of the virus proved effective. Our findings illustrate the course towards recovery that employers were beginning to chart, adapting processes and strategies to reflect what we came to know as “the new normal.”
By June, the number of businesses reporting an upturn had made a seismic jump from 12% to almost 50%. As we enter summer months, whilst we may not be out of the woods just yet, these top-line findings suggest our comeback from the Coronavirus crisis is beginning to get underway.
It hardly comes as a surprise to hear that home fitness and food delivery have thrived during lockdown – however, interesting hiring spikes in industries such as PropTech, and LegalTech are a welcome yet more unexpected development.
“Sector performance has proven far less consistent than you might think – a lot of the businesses doing well need to have a combination of a robust/in-demand sector as well as being managed well financially and sensibly staffed.”
– Chris Chapman, Associate Director, UX & Service Design
Naturally, caution around budgets remains. Yet, when it comes to hiring, many of our clients are happy to pay candidates their market worth to ensure new recruits are of a high standard.
Our consultants have identified a trend in the number of employers who are taking a long term view on hiring; these companies are conducting skills maps and seeking to secure strong talent that will help them achieve their objectives and weather the storm.
Optimism grows as the business landscape recovers
With the first wave came an inability to plan for the future, and understandably so – many businesses were having to make big decisions about areas they could cut costs. It figures that 21% of respondents to our barometer back in April said they weren’t optimistic about the following 3 months.
Needless to say, this period of intense uncertainty was met with realism from leaders and hiring managers unable to see the outcome of an unprecedented event.
Yet, by May, those not feeling optimistic at all had dropped by 13% to only 8% of respondents. Positivity was growing; a light at the end of the tunnel was beginning to appear as some semblance of business as usual began to creep in.
In June, findings from our survey revealed a pendulum swing in the other direction, with 28% reporting feeling somewhat optimistic and 14% feeling very optimistic about the next 3 months.
“In tech, the volume of work was down generally, but the market for tech has been increasingly looking better week to week as more confidence is being felt across the board.”
– Rohan Maheswaran, Team Manager – Engineering
Although some organisations have been fortunate enough to do well during this time, there’s certainly something to be said about our collective ability to adapt to new situations. It’s reassuring to see a comparatively large number of leaders feeling positive about the future – a trend we anticipate to continue in the coming months.
Hiring engines gear up for a new era
Back in April, financial insecurity saw 58% of businesses making cutbacks to staff costs, further illustrating their lack of certainty and optimism for the future at this point in time.
By May, the number of businesses who said they were continuing with hiring despite the crisis had suddenly shot up by 33%. New plans forged in the grip of the pandemic had proved successful for some, and our findings indicate an increasing need for resource in teams who have managed to come back stronger. In June, a healthy 29% said they will look to rehire when the crisis has passed – a sign that positivity has flourished and agility and perseverance have paid off.
Although a number of respondents had admitted to facing challenges when hiring remotely in April, no respondents at all cited remote hiring as a hurdle to their recruitment strategies in June – an indication of our ability to learn fast and move forward when push comes to shove.
“In the past month, recruitment processes have become more efficient than ever. Clients of ours who are currently hiring are fully committed to the process and benefiting from less scheduling issues and meeting room challenges.”
– Jon Wall, Recruitment Director
Nevertheless, employers who are in a position to recruit aren’t rushing to hire for the sake of filling a role – rather, they have slowed down interview processes to allow for a greater chance to evaluate more of the market and make sure any hires made are the best available.
Changes in demand see shifts in resource
Unprecedented events have inevitably required businesses to be agile in their operations and make tough decisions about where to allocate resources.
The side effect of the pandemic, for many organisations, has been the temporary evolution of certain roles and teams as companies shift resources to maximise efficiencies from what they currently have.
In project management, the ripples of the Coronavirus pandemic saw projects put on hold, so demand in this area has been reduced until confidence has returned. The intention for many businesses is to pick up projects and continue transformations at a later date, rather than scrapping them altogether, with a view of recommencing in September/October.
“From conversations with our clients, we’ve identified a decrease in the demand for product management due to a combination of deprioritising product and covering positions internally amongst existing employees. Meanwhile, many product managers are being asked to pick up other work and disciplines, such as Data/Analytics/Insight in their current role.”
– Andrew Demetriou, Manager – Product & Projects
Challenges in the contract market push candidates to permanent roles
As lockdown began in March, the general consensus across the recruitment industry was that contract hiring would be more desirable for businesses due to it carrying far less risk than permanent hiring (i.e. short notice periods if the climate changes suddenly). However, this has been much more balanced than we had anticipated, with many of our clients focusing on longer-term permanent hiring.
Unsurprisingly, the shortage of contract roles during the last few months has pushed many contractors towards permanent positions. While some of these candidates will relish the opportunity for long-term financial security in the future, an uptick in contract roles as projects recommence may trigger an exodus of contractors using perm positions to wait out the storm.
Where previously, fierce competition in a candidate-driven market saw businesses battle it out for the best talent, the tables have now turned. In the current climate, employers are now able to get their entire wish list without needing to afford too much flexibility. For businesses in a position to recruit, a brimming talent pool calls for thorough screening to ensure candidates are aligned to employers, not only in skill but in ambition and priorities.
“Whilst many contractors are looking for long-term roles / career progression, many have also been open with me that they’ll go perm until the contract market picks up – this presents a lot of risk for hirers not carrying out due diligence, and also creates the potential for a flurry of permanent vacancies once the contract market picks up.”
– Toby Thwaites, Team Manager, Design & Creative
Renewed confidence pushes the focus towards the future
In a crisis, cash flow is the cornerstone of survival and should therefore always be a top priority for any business. In this respect, our findings from April were hardly surprising: 36% of respondents had listed cash flow as the key priority in the coming months, with client retention coming up second place at 29%.
As the nation’s business landscape awaited developments in official government guidelines, uncertainty kept cash flow the primary concern for leaders throughout the UK.
Nevertheless, a growing trend in those comfortable enough to focus on generating new business began to appear. With business as usual off the table for many, the restrictions of lockdown forced organisations to diversify their offering and explore previously untapped avenues.
We suspect the delivery of new services is, in part, accountable for the upturn, with 24% of respondents exploring new business opportunities in May.
Within a matter of weeks, signs of recovery were clearer than ever. Increased confidence has seen new business finally taking over as the main focus for the majority of businesses in June, now accounting for 50% of all responses.
As we move forward through July, we can expect to see continued investment in partnership strategies as businesses find ways to launch new revenue streams in adjacent markets.
Client retention has maintained a high position in leadership priorities, but the newfound headspace born from an adaptable workforce has seen issues such as mental health in the workplace and becoming leaner in operations climb back into the forefront.
Employees experience the ripple effect of optimism
With many businesses making staff cutbacks and taking advantage of the government’s furlough scheme, 29% of employees reported their main concern in April to be keeping motivated during this period of uncertainty. Mental health concerns were understandably the second most pressing issue to employees in both April and May.
However, figures from our June barometer have proved more positive. While there was no clear front-runner in priorities, most respondents showed the same resilience found in leadership teams and hiring managers. Now, a clear ripple effect from renewed confidence in the business landscape has seen employees shift their focus to upskilling, and taking advantage of this time to secure the next step in their career.
Read how Content-editor-turned-UX-professional Kristen Carter switched careers in our latest instalment of Futureheads Five Stories.
The need for digital skills surges
The seismic shift to a digital-first economy that the pandemic has triggered can not be undone. If a skills gap was a pain point for businesses prior to the pandemic, it will have only been amplified by the impact of the Coronavirus.
Fortunately, hiring managers may find a sharp upturn in candidates who have maximised on downtime to get clued up on coding, web design and data analytics. Now more than ever, we will need these talented tech professionals to help businesses fast-track their way to digital transformation.
Already, we have noticed evidence of industries evolving to futureproof their profits. For example, despite these difficult times, some retail brands investing in digital hires have moved towards becoming a genuinely multi-channel business.
Charting a course to recovery
To say the last few months have been turbulent would be an understatement. Yet, if our findings are anything to go by, one thing is clear: our ability to persevere in times of uncertainty has been strengthened. Having weathered the storm, both employers and employees are now preparing themselves for a new chapter.
For a growing number of businesses, this will mean un-furloughing staff, attracting new talent and generating new opportunities. For employees, a chaotic few months has quietened down, instilling the talent pool with positivity about their future prospects. It may not be over just yet, but our ability to climb back up the cliff-edge has laid the foundations for a more resilient future.
The virus continues to pose a considerable threat to every industry, but businesses everywhere are both coping with their urgent needs and looking ahead to the time that things “return to normal”. Regardless as to when this may be, they have learned a hard lesson in agility, and an insistent streak of optimism continues to power business forward.