Since my last update in May, we have seen many changes in employment and the industry. I thought it would be useful to share a snapshot of how we see the industry handling employment, hiring and recruitment, pay and work practices as the UK has eased out of lockdown.
In the build-up to the webinar and report, the FRAME team surveyed hundreds of practices to gain a better understanding of the impact that the pandemic has had on their business.
Furlough Job Retention Scheme
The UK government launched the Furlough Job Retention Scheme in April 2020 intending to save jobs across the UK. It has been hugely popular and within our market, we’ve seen 77% of practices making use of the scheme. Large practices were the most likely to use it at 92%, as well as 84% of medium practices and 29% of small practices.
The Furlough Scheme has made some impact on the number of job losses in the market but unfortunately, there have still been some casualties. In May, The Architect’s Journal predicted that 31% of practices would need to make redundancies by the end of July. This was reflected in our research and 32% of practices agreed that they had already made redundancies. In June, The Architect’s Journal also predicted that the threat to jobs would be more acute in larger firms and again our research reflected this. 42% of large practices have already made redundancies, with 37% of medium practices and just 17% of small practices.
So, who has been made redundant? We have seen an increase in candidate activity since June and the range of redundancies has been diverse. In comparison to the Global Financial Crisis of 2008 where predominantly junior staff were let go, this time we are seeing a range from juniors to seniors, right up to Principal and Associate Director level.
On a positive note, we found that 23% of practices had not had to use the Furlough Scheme, had not made any redundancies and would not be making any redundancies either.
Hiring and recruitment
Whilst recruitment has become a bit of taboo for many practices, there is some activity which we would like to share.
50% of practices did not intend to hire over the next three months, leaving 50% of firms either planning to hire or making provisional plans to bring in new staff. 20% of practices had firm plans to make new hires in the next quarter, which indicates that these practices still hold a positive outlook with a longer-term view.
In-demand skill sets
Candidates will be keen to hear who these practices want to hire. Whilst technical ability, software skills and industry background will always remain important, candidates who hold strong soft skill sets will stand out from the rest. In particular, soft skills such as leadership, communication, relationship-building, productivity, adaptability, initiative and empathy have all grown in importance during the pandemic. Using these words in an interview is important, but don’t just mention your ‘initiative’. Be prepared to give an example of where you’ve used great initiative over recent months to achieve a good result for you and your business. ‘Communication’ skills need to include communication via modern technology – don’t be left behind without a working knowledge of Zoom or Teams etc.
Permanent versus Contract Roles
Back in May, we predicted that we would see a surge in contract and temporary roles as the pandemic continued. Whilst this has not yet panned out in reality, the focus has begun to shift. FRAME Recruitment’s pre-COVID ratio was approximately 65/35 permanent to contract roles. This dropped to zero contract jobs in April. Whilst there was not much uptick in May, as we have moved through into August we have seen the ratio change to 60/40.
Recruitment is now taking place for contract hires who will add flexibility for short-term roles that are focused on specific projects that are coming back online. This trend will continue as the recovery is still so uncertain and practices don’t want to increase commitment to long-term overheads and fixed headcount.
Candidate activity in the pandemic
In April, practices were quick to utilise money-saving tactics such as pay cuts, furlough, and reduced hours and Directors were taking a more hands-on responsibility of the day to day running of their practices. New vacancies dropped significantly this month, matched with a reduction in candidate activity such as job applications.
May continued in the same vane but a ‘tick’ shape recovery through June, July and a small dip in August brought new vacancies and job applications have increased up to pre-COVID level. What this means, in reality, is that job applications per job have reached a 150% increase in comparison to what we were seeing before the pandemic started.
Based on the new roles that we have been briefed in the pandemic, we have seen a decrease in salary offers from 7 – 20%. This varies across different skill sets as well as location and seniority. From our research, it is clear that pay freezes that were implemented as cost-saving tactics at the start of the pandemic are still in place.
The Impact of Remote Working on Pay
It is too early to discuss how exactly Remote Working Pay will take shape in the future, but some practices are already considering what they will do. We see three potential strategies for Remote Working Pay:
Pay based on employer location
Pay based on employee location
Pay based on the national median
Making a decision will take some time and consideration, there are pros and cons of implementing a different pay strategy for remote workers. London-based practices may decide to remove the London weighting from future remote roles but others will want to remain as competitive as possible to secure the best talent.
The Reality of a Remote Working Pay Strategy
To test the theory on whether candidates would take a reduced salary to remote work permanently, we conducted a poll on our industry LinkedIn page and the results were clear. A large proportion of workers in the sector would not take a pay cut for remote work. The reality for employers is that at this current time, candidates would not be attracted to a remote working job if the pay didn’t match that of an office-based job.
Remote working is a hot topic right now. At the end of March, April and May the UK had no choice but to move their teams to remote working. Historically, our market was heavily focused on ‘office-based’ working with remote working frowned upon. In our February 2020 report, pre-COVID our survey showed just 21% of employers offer remote work, often on a part-time basis.
We found that 54% of practices were already back in the office. Only 16% were back full-time, with those working for a small practice the most likely to be working in this way. 38% of practices were mixing both remote and office working. This will have been necessary for many practices where the space in their office will only facilitate reduced numbers due to COVID compliance. Those working in large practices were the most likely to be working in this hybrid way.
46% of practices were remote working in a full-time capacity. 30% of these also had no plans to return to the office as yet. Those working in medium-sized practices were the most likely to still be working from home.
In May we reported that practices were already being asked to ‘sharpen the pencil’ when bidding for new work. Unfortunately, this has continued and we have heard from Bid Managers that bids have been delayed from 6 months up to 9 – 12 months.
We see Residential and Mixed-Used as the busiest sectors right now. We cannot forget landscape either, they have been busy throughout this period. It continues to be quiet in Retail, Leisure, Tourism and Hospitality, Food & Beverage
I always welcome feedback on our findings and would be delighted if you would like to discuss any of the trends in further detail. Please contact me.