Recruitment shift from public to private?It's clear that we're now at the beginning of a transitional process in which there will be a shift in the balance of employment, away from jobs dependent on public spending to those resulting from private investment. It's in this period of transition that the recruitment sector will come into its own as it facilitates the shift of labour into the areas of the private sector economy that need the employees.
If the economy is to run as efficiently as possible, it will need the recruitment sector to aggregate the process of recruitment and deployment of labour with all the efficiencies of scale and specialist focus that this will bring. And there is opportunity ahead for the recruitment industry. Even now, there are about 23 million people employed in the private sector and nearly half a million unfilled jobs being advertised. As the economy returns to growth, the number of jobs advertised will increase still further, leaving plenty of job filling to be done.
Productivity in public & private sectors
Flexibility will be the watchword too. Productivity in the public sector has fallen over the last decade, and this is largely due to over-staffing. Schools, for example, have taken on thousands of unqualified teaching assistants, many of whom are used to providing cover for absent qualified colleagues. Schools are unlikely to be able to sustain this high fixed cost of surplus people on their payrolls, as budgets are squeezed, and will turn increasingly to supply teaching recruitment agencies for temporary cover. With costs incurred only when cover is needed, the potential efficiency gains are obvious and will no doubt be replicated by the similar use of temporary labour right across the public sector.
In the private sector, productivity has risen over the last decade. So, while the recruitment sector will bring efficiencies to the actual process of transition, by moving people to more productive industries and services, it also has a vitally important role in reviving our flagging economy overall.
HR leadership Challenges that lie ahead
The public sector spending cuts also present a huge HR leadership Challenge. In the midst of uncertainty, HR professionals must advise senior managers on how to manage a workforce demoralised by budget cuts.
John Philpott, chief economist at the Chartered Institute of Personnel and Development, has said that the government should make clear the scale of the job cuts so employers can fully prepare themselves:
"Politicians of all parties should openly acknowledge that major public sector downsizing is inevitable and prepare managers, workers and local communities to meet the pressures this will create."
How will graduate recruitment be impacted?
Another area that is sure to be affected by plans to cut public sector spending is graduate unemployment. The Higher Education Careers Services Unit (HECSU) has estimated itll rise to more than 20% - an unprecedented level. With a higher proportion of public sector staff qualified to degree level than private sector staff, the cuts are likely to have a disproportionate effect on graduates.
Nevertheless, some argue that government moves to cut public spending by subcontracting certain services to the private sector could actually mean more jobs for graduates. This positive outcome, however, will only happen if the flexibility of UK labour markets increases still further, facilitating the swift movement of graduates out of the public and into the private sector occupations that need them.
A change of focus is needed in public sector
After the deepest recession since the 1930s, the UK economy has been left in disequilibrium. There are simply too many people in the public sector. Take the education sector again, for example. When the credit crunch hit, thousands of graduates and mid-career changers sought sanctuary in a teaching job. Now, however, training colleges are packed to the rafters with students working towards qualified teacher status, but without available teaching jobs to employ them.
However, the speed at which the labour market adjusts to the shock that has caused the disequilibrium will be the true measure of its flexibility. In a sense, labour market flexibility is an indicator of the performance of the economy as a whole: how it responds to new ideas, the ease with which resources are transferred between competing uses and the associated efficiency that Results from such resource allocation - we may not want training colleges to keep turning out teachers that schools are choosing not to employ, even if it means keeping people in employment.
The importance of flexible labourThe recruitment sectors role will be pivotal in the shift required of the economy as it moves towards a new equilibrium. It will have an especially important contribution to make where temporary labour is required, allowing companies to improve productivity rapidly by being better able to optimise their workforce levels according to need.
If high productivity is to be maintained, then labour costs must fluctuate up and down as freely as the demand for a companys goods and services. Recruitment agencies offering temporary labour can make this necessary matching process happen, and happen instantly.
Efficiency is key for recruitment going forwardIn the dynamic global economy of the future, the recruitment sector will be seen to have an increasingly important social role. An improved occupational mobility of labour, in the end, Results in less structural unemployment and stronger employment creation when the shocks occur.
The efficiency that the recruitment industry as a whole can bring to the needs-related deployment of labour will also be essential in the global competition for inward investment. In short, a successful recruitment sector is vital to all our futures.