Economic uncertainty will remain a key challenge for 2021

The recruitment sector is a clear economic bellwether. So what are the trends?

According to the OECD, a club of mostly rich countries, the Covid-19 pandemic triggered a jobs crisis not seen since the Great Depression, with an impact on jobs 10 times that of the global financial crisis.

That fact has been cushioned somewhat by social and employment protections in the hope that many sectors have simply been put into the deep freeze but will, on foot of an effective vaccination rollout, get back to normal quickly.

The OECD predicts Ireland will recover in 2021 and see economic growth of more than 4 per cent in 2022.

However, the world will have been transformed in a number of ways before then. For a start, not everyone will have experienced the same emergency and not everyone will face the same prospects in the recovery.

The OECD warns that women and low-paid workers face greater risk of unemployment. Part-time, temporary and self-employed workers have borne the brunt of the pandemic, the company says.

Ireland faces the double whammy of Brexit too, set to take effect on January 1st. As Ireland’s key trading partner, accounting for about 14 per cent of our goods and services exports and a similar percentage of our imports, friction on those rails will be widely felt.

Most exposed

According to the Government’s Brexit Readiness Action Plan, published in September, the projected hit to Ireland’s GDP of up to 3.75 per cent will not be uniformly felt however, with significant regional and sectoral variations. Agri-food, fisheries, manufacturing and retail are the sectors most exposed.

While others, such as medtech, life sciences and parts of IT, have remained buoyant this year, anecdotal evidence suggests businesses in other sectors are holding off on decision making. Individuals, meanwhile, are staying put. Encouraging senior candidates to change jobs is more challenging.

For employers keen to seek out fresh talent pools, remote working is good news, breaking down geographic and other barriers to entry

Conor Jones of Cronin Partners search agency says: “There is always a run to safety in times of uncertainty.”

Some trends are more positive, including remote working’s move from the margins to centre stage where it will continue to play, if not a leading role, then at least a strong supporting one long after the curtain comes down on the pandemic.

Remote working

Ibec survey respondents suggest 21 per cent of their workforce will undertake a blend of office and remote working in 2021, with full-time remote working likely to be undertaken by 12 per cent.

For employers keen to seek out fresh talent pools, remote working is good news, breaking down geographic and other barriers to entry. A rise in flexible working will help open up opportunities for those with children, eldercare or other commitments. It should also help people aged over 65 who wish to continue working.

The pandemic will result in even greater demand for digital skills.

EY in its Economic Eye Report Winter 2020 says: “The lockdowns and social distancing have accelerated digital business. These trends were already happening but the overnight shift to digital by the traditionally slow adopter consumer segments has seen a landslide to digital customer interaction and cashless transactions.”

It refers to what it calls the “mass-market digitisation” that has taken place this year, transforming the delivery of services in everything from medical consultations to fitness training and education.

Retail and agriculture

According to EY, retail and agriculture won’t recover until 2025 at least, with manufacturing only predicted to return to peak levels by 2023, construction by 2022, accommodation and food by 2024 and professional services, education, the arts, health and finance, by 2023. ICT and professional services “are likely to be major job creators”, the report says.

Meanwhile, Ibec’s research indicates 49 per cent of organisations are planning pay freezes for 2021, with the same number predicting a pay increase.

Economic uncertainty is seen as a major challenge for more than two-thirds (67 per cent) of HR teams. But their priority for 2021 is “business continuity planning and crisis management”. We have been warned.