--- MARKET UPDATE SPRING 2023 ---
A More Positive Outlook for the sector?
In economic terms the UK outlook has improved somewhat since our last bulletin at the end of 2022. From earlier predictions of prolonged recession, most recent projections from the Office for Budget Responsibility are predicting that inflation rate will fall to 2.9% by the end of this year (The Bank of England suggest 4%) and the UK economy will avoid a technical recession in 2023 - two consecutive quarters of decline - however, GDP is still expected to contract by 0.2 per cent, the lowest of the G7 nations.
Strategies announced in the Spring Budget: bringing back the over 50’s to work; further free childcare for working parents; customs simplifications for small business; tax breaks for technology equipment & machinery investment; new investment zones etc. - will if implemented effectively, bolster economic activity and employment across industry including procurement and supply chain.
The CBI have responded positively to the Chancellor’s Spring Budget, however other business bodies including the British Chambers of Commerce, Federation of Small Businesses and the Recruitment and Employment Confederation, says many opportunities were missed including reforming business rates, energy support and measures to ease trade. OBR forecasts predict a drop of 6.6% in export volumes in 2023 followed by a further drop of 0.3% in 2024. This would mean two years of lost growth for UK goods and services exports.
With OBR, BoE and other indicators showing sharply falling inflation later in the year and further signs of economic stability, there will be reassurance for many businesses that have been hit by soaring costs and consumers reining in their spending.
War in Europe, economic uncertainty, energy costs, continuing Brexit adjustments, environmental security, and geopolitical shifts will continue to make for a challenging business environment for Procurement, Vendor Management and Supply Chain professionals, but at this time the economic and employment outlook for 2023 would appear better than foreseen at the end of 2022.
Procurement, Vendor Management and Supply Chain
In the last 3 months we have seen a slight softening in both Permanent and Interim activity whilst clients took stock of the anticipated recession and put on hold investment in projects and their staffing plans. However, with indicators that UK businesses are leaving pandemic challenges behind and better managing economic uncertainties (Ukraine-Russian war, Brexit, Labour, and Supply Chain shortages etc) we are seeing a recruitment market returning to the pre-pandemic normal.
Technology Sector under pressure:
Massive investment during covid has been a challenge to the technology sector, with a lot of technology companies (Microsoft, Twitter, Meta, Alphabet) laying-off staff as the technologies demanded in pandemic have waned and the sector grappled with a somewhat gloomy outlook for the global economy in 2023.
Interim Resourcing:
The Interim market appears to of levelled off for now, with less senior level roles offered, although we are still seeing solid demand for mid-level and ’hands-on’ contractors.
Rates appear to be staying fairly level now, after the rises we saw in 2022.
With the new financial year and firms looking at their new year budgets and targets, there is likely to be the usual uptick in activity from April.
As ever contractors with hard-to-find category skills, good technology experience and strong leadership and stakeholder engagement skills will always secure very strong rates. The availability of newly redundant Technology Sector contractors may however weaken rates as more highly skilled Interims become available. Vendor Management, Risk Management and Supplier Governance are hot topics, and we are seeing strong demand for talented people with these skills.
Interim roles remain predominantly inside IR35 Off-Payroll legislation, with circa 80% inside and 20% outside and usually with only very senior roles sitting outside IR35. Fixed Term Contracts (FTCs) are still out there and still not popular however with the number of interims looking they are not totally impossible to fill.
Major Recruitment Projects:
We have been working on several big recruitment drives: a Major Infrastructure Project, where Beaumont Select been recruiting for 30+ mid-level SRM, Contracts and Procurement specialists; and an Automotive Giant, seeking 20+ Buyers and Supply Chain / Programme Managers. Really interesting work for us, where we can liaise closely with their teams and get under the skin of the organisation.
Candidate Confidence:
In the last 6 months we saw many people bunkering down to weather the potential downturn. Hopefully the slightly more positive UK economic outlook will increase job seekers confidence and the available talent, as we move through the year.
2/3 Days in the Office is the New Norm:
From the pandemic seeing almost everyone working from home, we are now seeing a return to office for 2/3 days a week for most of our clients. Most candidates seem ok with this, however employers that offer fully flexible hybrid working policy will really enhance the attractiveness of their roles, in what is still a competitive talent market.
Counteroffers:
Businesses have become more aware of the challenges and cost of losing their skilled people in a candidate short market, the Counteroffer is now the norm rather than the exception. Many candidates are receiving strong counteroffers sufficient for them to stay put, rather than moving.
Interviews:
Despite the end of covid restrictions and a return to normality most interviews (circa 90% of first ones) are remote with a few more later interviews being face to face.
Categories in most demand:
IT Cyber Security, SAAS, Cloud
Digital Marketing
HR & Professional Services
Facilities
Vendor Management
Risk Management
Supplier Governance
Procurement and Supply Chain Recruitment in Europe:
Our Europe Desk has been particularly active, and the EU market seems busier than the UK, supported by economic comparisons that point to the UK sitting behind our European competitors in terms economic activity and growth. The ‘hangovers’ from Brexit remain, making this all more challenging than it should be.
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Conclusions
Demand for Interim and Permanent procurement, vendor management and supply chain talent remain strong.
The need for exceptional supply chain, vendor management and procurement people are as high as it has ever been, and the challenge for employers of finding and securing them remain considerable. In the face of skills shortages, organisations must nurture their own talent whilst adopting innovative and targeted recruitment campaigns to secure the talent they need to ensure competitive advantage. These strategies must reflect changing employee demands in a rapidly changing recruitment market and uncertain economic landscape; and staffing policies and interactions must build trust and confidence amongst potential candidates.
Changes brought about by the Pandemic, Brexit, Supply Chain Security, Environment, Sustainability, Corporate Social Governance, and war in Europe do nothing but fortify the importance of effective supply chain and procurement teams and we see procurement, vendor management and supply chain job sectors remaining more resilient to UK and world economic challenges than most other sectors.
There is no doubt the talented professionals in our industry will continue to make a critical and immense contribution to resolving the multitude of ‘unprecedented’ business challenges seen over the last 3 years.
If you would like more information about Interim or Permanent Recruitment Solutions for Procurement, Supply Chain and Vendor Management disciplines, please call:
T: +44 (0)1403 248 448
E: info@beselect.co.uk
The Beaumont Select Recruitment Team
Beaumont Select Market Bulletin, Spring 2023
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