Brexit, IR35 and Soft Skills: The Changing Landscape of HR and Recruitment

Human Resources is a multi-faceted role that seems to be constantly shifting its area of control and influence. Here are our latest predications and insights for the sector.

he past year has been a whirlwind. As you know, Covid-19 has left millions out of work and companies on the brink of collapse. Most businesses either closed or transitioned to remote working, and their employees were expected to adapt.

Alongside this, the UK experienced key social and economic events. Consider, for example, the development of the Black Lives Movement after George Floyd’s Death. Or economically, when the Brexit transition period ended and new rules between the UK and EU were established.

These changes have brought about new recruitment trends. The social and business world looks different to what it did a year ago, and recruiters are having to adapt. Here are examples of how this has drastically influenced the 2021 hiring process.

A shift in desired skills

The pandemic encouraged businesses to adopt virtual recruitment for the first time. Moreover, as remote interviews are more cost and time effective, they are likely to continue long into the future. This shift has put a greater emphasis on certain skills.

A focus on soft skills

Identifying a candidate’s hard skills is straightforward: highlighted by a candidate’s qualifications and measured by tests, like in Maths and English. But someone’s soft skills are much harder to. That’s because it’s difficult to outline things like “communication skills” or “etiquette” on paper. In the past, employees have used in-person interviews to assess these.

But video interviews make it more difficult, as you can’t read someone’s body language or form a genuine connection on camera. As such, hiring managers are having to adopt new methods to measure the character of an individual. For now, most recruiters are using online personality tests and tasks to do so.

Coronavirus bought several challenges: from personal sickness and lockdown, to fear of unemployment. Now more than ever, there is a greater emphasis on a manager’s ability to support their team and integrate new employees. Consequently, a number of soft skills are in demand. Including adaptability, communication, collaboration, emotional intelligence, and leadership. If you’re a candidate, you should expect the hiring process and tests to focus on these.

A focus on teaching others

During a review of 600,000 job adverts, Adzuna discovered that leadership skills are highly desirable right now. Employers are focusing on decision making, onboarding, coaching and training skills. In 2020, “Coaching” appeared in 3.7% of 2020 job ads. While “training” appeared in 37.06%.

These findings indicate that businesses need employees that can take charge and lead a team. This is significant for recruitment and HR for a number of reasons. Whilst at face value, this could mean that they need to seek these skills in candidates, it could also mean that the role of HR is shifting.

Onboarding has always been a key part of human resources however this spike could mean that employers seek to delegate this duty amongst the team, freeing up HR for other duties (such as training). Training, on the other hand, is not something that always lies with HR/Recruitment however, given the economic blow a lot of businesses have suffered the past year, employers may be looking to cut costs by taking their learning and development in-house. Online businesses facing remote work need employees that can support staff from home. By comparison, the hospitality sector needs players that can effectively train staff, as they expect a boom in demand.

A work shortage

For the past decade, there has been a shortage of in-demand skills. The engineering sector, for example, has concerns about an ageing workforce and a low intake of apprenticeships. Before the Coronavirus, the sector needed 1.8 million people to meet demand. While in the aviation industry, two in five business leaders named a lack of skills as their biggest challenge.

Before 2020, these markets were shaped by candidates. With insufficient skills, it was easy for trained candidates to secure a job. But the dynamic has changed. During Covid-19, most projects were delayed or cancelled. With less demand, work is harder to come by. The UK’s largest companies have been forced to cut 60,000 jobs globally.

The average number of applications for a position has jumped from 25 to 250. That’s good for businesses, who will easily fill vacancies. There is even a surplus for less desirable positions, like entry-level. But candidates can expect a more competitive application process and will have to do more to stand out.

A focus on diversity

In 2020, companies around the world pledged their support to the Black Lives Matter movement. In doing so, they started putting a greater emphasis on inclusion.

Businesses that fail to risk poor publicity, as they will be perceived as behind the times. In addition, a diverse workforce brings a range of benefits, including a unique perspective from a range of backgrounds. According to research, diverse teams are smarter and engage better.

To achieve this in 2021, it’s expected that recruiters will expand their talent pool, and give better access to candidates from underrepresented groups. It’s also important that hiring managers take steps to reduce bias throughout the process.

Brexit and international employment

The Brexit transition ended on the 31st of December 2020, and new rules now apply. In accordance with these, EU citizens moving to work will need a visa and family members living with them will need UK immigration status.

Before Brexit, 1 in 4 businesses employed European staff. With new laws in place, employers are less likely to hire EU citizens when they cannot gain permanent residence here. In addition, UK employers hiring anybody from outside the UK will now need a UK Visa Sponsorship for Employers.

Because these new formalities make it difficult to hire EU staff, it is predicted that hiring managers will:

1.put greater emphasis on staff retention, and

2.focus more on UK talent pools.

However, this tactic will not work for industries with a skills’ deficit (like aerospace and aviation). They rely on EU employees, so will need to work harder to attract them and ensure their selection process complies with this new law.

The new IR35 legislation

During the pandemic, the UK government postponed the integration of new payroll legislation for 12 months. But from April 2021, new IR35 legislation will apply, and private sector businesses must be compliant. It is one of the biggest shifts in employment law, outlining “off-payroll working” rules for clients and contractors. Effective management of contingent workforces will be pivotal in helping companies continue to recruit and benefit from large volumes of contractors, with minimal financial and resource impact.

It will mostly affect high contract workforces that deal with freelancers and contractors, like construction, engineering, and manufacturing industries. As part of this, the employer (rather than the contractor) will be responsible for determining the employment status of an individual. This will influence the businesses responsibility in managing an individual’s income tax and national insurance, as well as their rights.

This means more admin when hiring a contractor, which will increase the cost of recruitment. In addition, a breach of the rules carries a large fine and prison charges. Many companies will have to restructure to guarantee projects are still successful while they comply. Processes will need to be as efficient as possible in order to reduce admin burdens and limit risk. Both communication between finance and compliance departments and the rest of the business, and communication between the business and its contractor employees, must be prioritised to ensure compliance.

Final thoughts on recruitment trends

The past year has been a challenge. Alongside a global pandemic, we have experienced numerous social and economic changes to society. During this time, businesses have been forced to change and adapt, which has caused new recruitment trends.

Whether you are looking for work, or are a recruiter looking for new staff, we recommend checking out our courses to help.