There be a storm a-brewing….

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Last week I celebrated/commiserated (delete as appropriate) my 14th year in recruitment.  Rather than get all nostalgic about what has changed in recruitment and Housing (which is a lot by the way…..Transitional Housing Benefit and Supporting People was being rolled out for a start), it got me thinking about the future and where the market and industry is going now.  The Tories seem hell bent on finding every bit of change down the back of the economic sofa in order to reduce the deficit, and 2 target areas are Social Housing and the Interim market, so should I start to worry?

I recently wrote a blog on the changes from the HMRC which will impact the interim market, and you can read it again here.  The constant pressures put on Social Housing are widespread and unlikely to abate.

I want to concentrate on the IMPACT that this could have in the market.  I often get asked, “how is the market at the moment?”, and the honest answer is that we are actually pretty busy.  For a still relatively young company, we’ve been kept very busy with both interim and permanent campaigns and I can’t see that changing.  My concern however, is for Housing organisations themselves, and think they need to act now, to prepare for the future.

So what are the potential issues?

Many Housing organisations are being forced to find efficiencies in service delivery in order to cover losses from the impact of Welfare Reform/UC/1% rent drop.  They are doing this in numerous different ways- some through scaling back from development plans, some through merging with other organisations, and many through looking at staffing structures (i.e. redundancies).  We have seen a surge in people contacting us looking to move on from their current employers as their workload has increased to unmanageable levels and in some cases, this is twinned with a drop in salary.  Although, it has an immediate impact on the bottom line, its more of an elastoplast, rather than a cure.  Overtime, what could this lead to?

An increase in people on sick leave? Very likely- and then an increase in staff costs when bringing in temporary cover.  FAIL.

An increase in staff turnover?  Likely again-People will move on to other roles, (sometimes that may be a good thing) but less experienced staff will take time to train up, so it can lead to a build-up in workload and sometimes a drop in quality. Additionally, high staff turnover (and redundancies) can make future applicant attraction more difficult. FAIL.

A reduction in customer satisfaction? Possibly- if customers have been used to a visible presence on the patch, or the phone being answered rather than being held in a queue for 10 minutes, and this changes, you can be sure that they will let you know about it. FAIL.

None of these options are positive and flies in the face of what Housing organisations have been striving for in recent years.

Other organisations are looking for financial security and efficiencies through merging with another organisation, or joining a group structure.  Many of these can be very positive, but they can also have negative sides too.  It will often create a nervousness within the staff teams and lead to leaking good talent who choose to move on their own terms rather than wait to see if there is a place for them in the new structure.

If you work in Housing, the above will not be too much of a shock.  And the fluid nature of the industry is what keeps people like us in business.  But I think there is an opportunity here to really change how Housing & recruitment companies can work together.

The HMRC changes regarding IR35 compliance means that the pool of talent (for the temporary market in particular) that clients could have called upon in the past has been eroded.  Housing requires a bespoke skill set- great customer service, comprehensive legislative knowledge and particular policies and processes to follow.  Those people that choose to work in the temporary/interim market do so, knowing that they may be required to travel for work.  Historically, they have been able to offset these expenses against tax, but for many, that is no longer the case.  In the last month, I have lost count of the number of seasoned temps who have called me asking for advice in getting back into the permanent market.  On Friday, a candidate that has worked in countless temporary assignments for me over the past 12 years, said that she is considering permanent opportunities.  I never thought I’d see the day!

But what does this mean?

Well, firstly, Housing organisations are going to have to start considering local candidates for their temporary cover (or face paying over the odds to contribute towards expenses).  If you are based in one of the bigger cities, then that shouldn’t be too difficult initially, but those in more rural settings may struggle.  Even in bigger conurbations, over time, it will also lead to the same old faces being recycled, thus reducing choice for the client.

The pool of talent running dry- there will be more requirements than decent candidates and so something will give- either services will fail due to having no-one in post, or sub-standard talent will be brought in (those people that were made redundant and have struggled to find a new role), and that just adds to the workload.

So what now?

Recruitment needs to play a key role in Housing organisations’ strategy- that is from applicant attraction and getting people into Housing generally, to employee recruitment and retention (and that includes factoring in your fluid temporary workforce).  Recruitment companies could and should play a role in this.

Many organisations have an “arms length” relationship with their recruiters (and I don’t blame them in the main).  They get bombarded all the time by speculative calls and emails, so just engage a few when needed and set them off with a skeleton brief.  Its fine if you want to spend time shortlisting, sifting and referencing a mixed bag of applications.  But, the best outcomes come through effective engagement and understanding of the client and their needs.  In a market where you will be fighting over the best people during the on-coming “perfect storm” of increased demand and decreased supply, I think it would be prudent to engage now in 2-way, open conversations with (carefully selected) recruiters to enable them to be effective ambassadors for your organisation and be pro-actively hunting out those people that you will need in the future.

Be selective.  Be demanding.   Really get them to demonstrate how they can add value to your organisation and then you can really start to work collaboratively and see what effective recruiters can bring to the table.