The State of Recruitment in 2021
Agency Report

In 2021, things in recruitment are still changing fast.

How are the latest restrictions and lockdowns impacting recruitment? What are recruiters doing to prepare for the rest of the year? What are their priorities and concerns?

We’ve committed to track the real-world progress of the industry since the beginning of the pandemic and this survey is the third-part of our long-term analysis.

In April 2020 we showed how the shockwave of COVID affected businesses, through to a period of settling and cautious recovery and further fluctuations, and now signs of recovery coming into 2021

Use this data to benchmark your own recruitment, and inspire your own strategy for the rest of 2021.

Looking for the results from employers instead of recruitment agencies? View the report here →

Summary of results

• Winning new business and re-engaging with former clients are the current top priorities for agency teams.
• New challenges have emerged over the past few months and agency leaders are now most concerned about clients not recruiting, as well as the challenging economic and market conditions.
• More clients are re-engaging, changing start dates for candidates and renegotiating fees.
• New restrictions continue to impact recruitment, but this is more varied, with many who were impacted by the lockdowns in 2020 now being able to continue.
• There’s a more positive outlook for the future amongst recruiters.
• Ability to attract candidates has mostly stabilised, compared with April and August last year when the majority were finding candidate attraction easier than normal. A larger proportion of respondents are now finding candidate attraction more challenging compared to last year.
• Candidate behaviours appear to be following similar trends to last year.
• The self-reported wellbeing of agency teams is higher than last year, suggesting staff are feeling more settled into the ‘new normal’ ways of working. 70% reported overall positivity around their wellbeing.
  

New agency priorities

Winning new clients is top of the list of priorities for 81% recruitment agencies.

With so many agencies having suffered a drastic reduction in income last year, it’s understandable that bringing in new sources of revenue is an essential part of recovery plans.

Agency leaders feel positive that they will be able to achieve this in the year ahead - 78% feel positive about their ability to win new clients in 2021. That’s up from 55% in August 2020.

Also high in the list of the priorities is re-engaging with former clients.

With our August pulse survey showing that 69% of employers had reduced or frozen their recruitment, bringing these clients back on board is critical to securing the future of the agency.

The full list of priorities:

81% Winning new clients

62% Re-engaging former clients

51% Filling existing vacancies

41% Diversifying the business

38% Growing your team

35% Attracting new candidates

30% Implementing new technology

27% Developing a new strategy for the future

22% Implementing automation

More challenges ahead in 2021

There’s no doubt that plenty of challenges still lie ahead for the rest of 2021. We found that the biggest concern for the year was clients not recruiting. Winning new clients and re-engaging with former clients, is of course totally dependent on employers being able to unfreeze and resume their hiring.

The results from the employer version of our pulse survey suggest positivity in this area, finding that many employers who froze recruitment in 2020 have been able to continue recruiting during the latest restrictions.

The next largest concern is operating within challenging economic and market conditions. The pandemic is continuing to impact the UK economy, with the latest data from the Office for National Statistics revealing that the services sector had shrunk by 3.4% in November. 

The impact of brexit on recruitment is a concern for nearly a third of recruitment agencies operating in the UK.

Engagement with clients

A third of agencies have seen their clients re-engage with them again over the last couple of months.

This is an incredibly positive sign for agencies and staffing firms, demonstrating how the demand from clients is already returning.

Throughout 2020, changes to candidate start dates and adjustments to fees were popular requests from clients. These accommodations are still commonplace, and it's likely that clients will continue to expect a greater level of flexibility from their agency until they have a greater sense of 'business as usual'.

Despite the positive level of engagement, 30% of agencies still have clients who they have been unable to reach.

The impact of new restrictions and government support

In the UK:

After a third national lockdown was announced in the UK on 4th January, the impact on recruitment appears to be much more varied across sectors than in previous lockdowns.

With the UK’s job retention scheme having already been extended until the end of April 2021, it’s likely that this will have provided greater certainty than during the 2020 lockdowns.

Some recruitment agencies and staffing firms reported that new restrictions were again having an impact.

• Hiring freezes have been reintroduced by some of their clients who are unable to operate normally.
• Many agencies are still working significantly below their usual volumes. Some agencies said they were down to 10 - 20% of their usual workloads.

"The impact has been considerable. From March to September clients withdrew all briefs. Q4 2020 was at 25% of normal volumes. Q1 2021 is the same so far."

"The year always starts slowly and gathers pace after the 18th January, so at this point, too early to say if there's a massive impact, but I expect some recruitment plans will be postponed due to Covid anyway."

"Sadly our field has been heavily disrupted: no ongoing recruitment since Covid has started."

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Whereas other agencies, including some which were impacted by earlier lockdowns, have seen less impact than before.

• Recruitment for roles in the public sector has surged, with more roles available for agencies and higher demand from candidates.
• With more candidates available, some agencies have been finding it easier to recruit into roles they previously found challenging.
• Most teams now have the tools they need to operate a fully remote/virtual hiring and onboarding process - which has helped to keep business moving.

"The business was heavily affected in the first 2 lockdowns and we have seen business increase during lockdown 3."

"It's been positive, the market is flooded with candidates. We've seen a real switch in finding entry level talent quite tricky, to it being a doddle."

"Better than the first lockdown as everyone has adapted to full time remote working. Staff also now have remote fatigue and are missing colleague interaction."

Around the world

Data from Broadbean shows how job posting was recovering in the lead up to the new year, with slow but consistent growth in several key recruitment markets.

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A more positive outlook for the future

Despite the challenges which lie ahead, recruiters now have a significantly more positive outlook for the future.

It’s likely that positive news about the vaccines, predictions being made for the future easing of restrictions, as well as becoming more comfortable with new ways of working have all contributed to a more positive outlook.

Within our own industry there are signs that 'recruitment recovery' is already underway for many sectors, with job postings having returned to pre-covid levels in key recruitment markets at several points in 2020. It's likely that this will have helped to boost positivity too.

Feelings around business and job security have also improved, with X% saying they felt overall positive.

However when compared to employers, it’s clear that there is still more uncertainty on the agency side. 93% of in-house recruiters felt positive about the future of their organisation, compared to 78% at recruitment agencies.

Candidate attraction

Candidate attraction has started to return to more normal levels.

During the summer, we saw finding and placing quality candidates become suddenly easier for nearly two thirds of organisations.

The biggest challenge then became sorting through high volumes of irrelevant applications, as candidates were applying to roles which they didn't have the right skills or experience for.

But the latest results suggest attracting quality candidates is once again a challenge. It’s remained the same or become more challenging for just over 60%.

Feelings of positivity around candidate attraction have also started to slightly decline. 84% think that they will be able to easily attract candidates to roles in 2021, compared to 94% last summer.

How candidates are behaving in 2021

The most common behaviours mentioned were:

• An expectation for long-term remote working, even once the pandemic is over and office are able to fully re-open.
• A greater interest from candidates around the security of a role.
• A higher volume of candidates applying who are underqualified or without enough experience for roles.
• More resistance from passive candidates to change roles, with candidates not prepared to take risks or make big jumps.
• Currently more interest in roles in the public sector than usual, as candidates search for greater job security.

• More interest in the company culture before applying - candidates want to see how the organisation supported their staff throughout the pandemic.
  

Recruiters said:

“Talented candidates seem to be staying put - harder to engage with those in secure roles as the risk of moving in a pandemic isn't appealing to them. We, like everyone else, are experiencing higher volumes of applicants that don't have the experience for the roles on offer.”

"There appears to be more of an acceptance of the Covid situation and people are trying to live life as normal as possible and are resigned to the fact that life must move on, therefore, they are finding ways to overcome the issues around Covid and continue to develop their careers."

Wellbeing is still on the rise

The self-reported wellbeing of agency teams is higher than last year, suggesting staff are feeling more settled into the ‘new normal’ ways of working.

70% reported overall positivity around their wellbeing, compared with just 60% in August and 42% in April.

This is despite many aspects of the working experience of an in-house recruiter not having changed throughout the pandemic.

Many are still having to juggle childcare and work, and most are still working entirely remotely.

However greater positivity in other areas (such as job security and outlook for the future) are giving everyone an extra boost.

Some organisations have been supporting their teams by introducing new wellbeing initiatives and benefits, which help staff to feel more connected and engaged.

We're on the road to recovery

There are some really positive outcomes in these latest results. Recruitment agency recovery is well underway for many, and many aspects of 'business as usual' appear to be falling back into place.

Of course, it's still far from a walk in the park. Some are still struggling and the latest restrictions are causing another round of challenges for many.

But even as we face these challenges, there's a sense that the end is in sight.

In the rest of 2021, the winners will be those who can move fast, do more with less, and seize the new opportunities which head their way.

Our thanks to the hundreds of recruiters who responded to our pulse surveys and made it possible to share this data with the industry.