Recruiting Before And After The Pandemic

Date
Written by
Kohlrabi Consulting
Commissioned by
If You Could Jobs

The pandemic has been immensely challenging for businesses. Most have been required to adjust to remote working and many have been required to temporarily halt their activities and furlough their staff. With the ongoing success of the vaccination programme, many businesses will be looking to future and considering their plans for recruitment. We aimed to understand the impact of the Covid-19 pandemic on business, plans for recruitment going forward, and how this varied by sector and company size.

Executive Summary

The Covid-19 pandemic led to redundancies and furlough staff, but also new hires.

  • Over a quarter reported making at least one redundancy and 60% made use of the
    furlough scheme, however 85% hired at least one new member of staff.
  • Smaller companies were less likely to make redundancies than larger companies (6%
    in companies with less than 10 employees vs. 47% in companies with 10-50
    employees and 29% of companies with more than employees).
  • There were no differences found by sector or location.

The impact of Covid-19 on businesses was worse for smaller business and those based outside of London.

  • When asked how companies performed (in relation to profit) during the Covid-19 pandemic, there was variation with 43% reporting it was worse than expected and 41% reporting it was better than expected.
  • Smaller companies (i.e. those with less than 10 employees) and companies based outside of London were more likely to report a negative impact of the Covid-19 pandemic on their business.
  • There is a large amount of optimism for the future with 90% expecting that business performance in 2021 will be better than in 2020.

Most companies are making plans to recruit in the near future.

  • 95% of companies have plans to recruit in the near future.
  • This recruitment is mainly due to company growth (68%), but some plan to recruit
    more freelance positions (10%) or need to replace employees who have resigned or were made redundant (10%).

The shift to remote working presents both challenges and opportunities for recruitment.

  • Due to the normalisation of remote working and the ability to work from different
    towns and cities, it is expected there will be a greater pool of applicants that can
    contribute towards and help grow business.
  • However, there is recognition of greater hiring competition with more established
    companies due to increases in ways of remote working.
  • Several challenges with integrating and onboarding new members of staff as well as
    general uncertainties about returning to previous working practises may cause hesitancy both in companies hiring new staff and in employees not wishing to change jobs.

Methods

Participants

Recruiters and business owners working in the creative industry were invited to take part in the survey by advertising on a mailing lists and on social media sites. 76 people started the survey and 42 people completed it (55% completion rate). Participants were offered the chance to win five premium job credits for If You Could worth £832 with the winner selected using a random number generator.

Survey questions

The survey asked questions about the characteristics of the company (sector, location and size), the impact of the COVID-19 pandemic on their business performance and staff retention, and future recruitment plans. The complete survey can be found in Appendix 1.

Analytical approach

Differences between groups were explored using chi-square tests, one-way ANOVAs and Kruskal-Wallis tests. Due to the small sample size, some variables were collapsed as appropriate to examine differences in responses amongst different groups. Free-text responses were qualitatively analysed to add a deeper level of understanding and context to the main results.

Results

Demographics

Of 40 respondents, 21 (53%) were business owners, 12 (30%) were senior managers responsible for recruitment and 7 (17%) were staff responsible for recruitment. Three quarters of the companies were based in London (n=30). Nearly half of the companies were in the design sector (n=19), with 18% (n=7) in digital and film and the remaining 14 in various other sectors. Categorisation of sectors is provided in Appendix 2. Based on self-reported estimates, the size of the companies ranged from 1 to 1200 in March 2020. 40% of companies had fewer than 10 staff, 43% had 10 to 50 staff and 17% were larger than 50.

Redundancies, resignations and furloughs during the pandemic

There was a substantial amount of staff turnover from March 2020 to present. Over a quarter of companies reported that they made one or more staff redundant during the pandemic, while 59% used the furlough scheme. Notably, 85% made 1 or more new hires during this period as well. In those that used the furlough scheme, the proportion of staff furloughed ranged from 9% to 100%. Conversely, the proportion of staff made redundant ranged from 5% to 33%.

There was no difference in either the proportion or number of redundancies by company size or sector. However, smaller companies were less likely to make 1 or more employees redundant than larger companies. For example, 6% of companies with <10 employees; 47% of companies with 10-50 employees; 29% of companies with >50 employees). Figure 1 shows the proportion of staff made redundant or furloughed and the proportion of new hires by company size.

Impact of Covid-19 on business performance

The pandemic impacted companies differently; a similar proportion of respondents reported that profits were either worse (43%) or better (41%) than 2019, with 16% reporting that they were the same (see Figure 2). All companies expected their profits to be either the same (11%) or better than 2020 (89%). There were no associations between profit changes from 2019 to 2020 and projections for 2021.

Several characteristics were associated with poorer profits in 2020. First, companies with more than 50 employees were more likely to report that profits were better than expected in 2020 (60%), compared to medium sized companies (10-50 employees; 41%) and companies with fewer than 10 employees (33%). This suggests that smaller companies were hit harder financially. There was some evidence that the pandemic had a greater negative impact on profits for companies outside of London; 67% reported that the profits in the past year were worse than normal compared to 36% within London. As expected, those who reported worse profits than expected in 2020 were more likely to make staff redundant (73%) than those who reported the same or better profits than expected (14%); however, there were no differences in furlough use or new hires made. Finally, there were no links between company characteristics or any pandemic-related profit impact on any future profit projections for 2021.

Future plans for recruiting

Nearly all companies planned to recruit in the next 12 months (95%). Those who did not plan to recruit had just finished recruiting drives for current projects and did not need additional employees. The majority planned to recruit due to company growth, while others needed to replace employees that had resigned, been furloughed (and decided not to return) or made redundant over the last year (Figure 3). Notably, only 10% planned to recruit as normal and only 10% intended to create more freelance roles to replace traditional part or full-time roles. This suggests that there will be increased opportunities for job seekers and that roles will not be shifted to freelance. However, this should be interpreted with caution as it is expected to be affected by response bias. As participants were recruited through If You Could, it is likely that this survey over represents companies who are thriving and actively looking to hire new staff and underrepresent companies which are struggling.

People are really waking up to flexible working as a benefit, finally we might start to respect life outside of work, the essential need for rest and work at times that suit our differing lifestyles as a genuine employee benefit.
Senior manager of a design company

Opportunities for recruitment in the coming year

Nearly all companies recognised that the increased pool of applicants was the biggest opportunity for recruiting in the coming months. In particular, companies highlighted the value that new recruits could bring to the company through increasing diversity and enthusiastic young voices. Companies also highlighted that flexible working has become an advantage due to lifting of geographical restrictions in hiring new employees (e.g. employees do not need to be based within the same city) and to future ways of working.

Challenges for recruitment in the coming year

Many different recruiting challenges were identified. Respondents were concerned about the ability to integrate new staff and both maintain and improve company culture due to remote working. There were concerns about having a high number of applicants, due both to the time it would require shortlisting applications and also with concern about competition with other companies who may be seeking to hire the same individuals. Finally, the uncertainty of the pandemic was concerning for some as it can be challenging to forecast profits and loss, physical locations of offices, and there are some concerns that high quality applicants are reluctant to change jobs during the pandemic.

[A challenge will be] integrating new staff and maintaining company culture while working from home at least some of the time.
Senior manager of a design company

Conclusions

To conclude, we found that the extent of the impact of Covid-19 pandemic on business varied greatly, with smaller business and those outside London more likely to be affected negatively. Most are optimistic about the coming year and expect their business to perform better than in 2020. All of the businesses surveyed have recently recruited or have plans to recruit in the near future. Several opportunities were identified to hiring in the coming year; due to the normalisation of remote working, there is now an increased pool of applicants to select from. On the other hand, there is increased competition from other companies looking to hire new staff and several businesses are concerned about how to successfully ‘on board’ new hires and create productive working relationships. There is still a considerable amount of uncertainty regarding the requirements of remote versus office working, which is a concern when recruiting and hiring new employees.