Zero Hour Contracts, Zero Opportunity? Recruitment in the UK
How should the UK Recruitment industry act in the face of rising zero hours contracts?
Eight Wembley stadiums, 8,000 shiny red Routemasters, three-and-a-bit times the population of Hull – 700,000 – which ever way you cut it, it’s a big number. If you live in the UK and and have followed the recent electoral leadership debates, you will also know it’s also the number of people currently employed on zero hour contracts in the United Kingdom.
What’s the Problem?
The key issue is that in many areas of the UK jobs are still scarce and lots of people have little choice but to take low-paid jobs with no long-term security; employees are hired but are guaranteed “zero hours.” Many employers have taken advantage of this state of affairs to offer more of these contracts to lower their wage bill, leaving even greater numbers of workers technically not unemployed, but very often underemployed exposed to no guarantee of a long-term stable income.
Employers believe that zero hour contracts are key to eliminating unemployment, stimulating the economy, and allowing both employers and employees the flexibility needed to survive. Others believe that zero hour contracts take advantage of an economically vulnerable group of individuals who are forced to take whatever employment opportunities come along, whatever the risk to them.
Somewhat of a political hot potato, the issue has also come to the fore due to the Conservatives and Labour having such polarised workforce policies. The Tories bang the drum for the UK pioneering a flexible and mobile workforce and they chime on about ever-lowering unemployment and ‘growth, growth, growth.’ Their confidence is certainly reflected by recruitment agencies, 93% of whom expect to surpass their financial targets this year. Labour, however, are proclaiming zero hours are tantamount to modern day slavery and should be abolished immediately, and are harming the long-term economic health of the country. One suspects that certainly until the UK election on May 7th, the zero hour issue is going nowhere.
Recruitment – The Voice of Reason
The reaction of the recruitment industry, pleasingly, has been a relative voice of reason amongst the brouhaha. In the world of temporary recruitment at least, zero hour contracts are similar enough in terms of workflow to what has been going on for decades – particularly in agile industries such as healthcare. Rather than something to be feared, zero hour contracts present an opportunity for the savvy recruiter, particularly in a currently bullish and cash-rich recruitment market.
According to Bullhorn’s recent UK Recruitment Trends Report, 85% of recruitment agencies met their revenue goals in 2014, and a staggering 97% of temp agencies expect to exceed their goals this year. Whilst this points to a landscape where recruitment agencies are able to turn a profit, it also forewarns of increased competition in the market. The only way to prosper in this type of market is to invest sensibly and ensure that you are accessing potentially profitable markets in a more efficient and effective manner than your competitors.
Eliminate the pain of the contract marketplace and tedious manual data entry with a decent onboarding tool and suddenly clients and contractors are much easier to manage, saving recruiters time and money.
In line with zero hour contracts, the UK employment market has also seen a recent rise of jobs driven through vendor management systems (VMS), as reported in Bullhorn’s UK report. At first glance this is another administrative nightmare, but with shrewd investment in tools that can help firms integrate with any VMS, this becomes an opportunity on which recruiters cannot afford to miss out – especially in a global market already worth £50bn.
Whatever people may think of zero hour contracts, the technology now available to recruiters has developed in such a way that unless thwarted through legislation, the likelihood is that these contracts are here to stay. In order to remain relevant in this employment market, recruiters need to make investments now that will mould their business and ensure their profitability long into the future.