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Engineering Recruitment Market Update – Summer 2019

Found in:

29/07/2019

Engineering Mid Year Review 2019 Middle

We hope you enjoyed our 2018 Engineering Recruitment updates; Civil and Structural Engineering – Recruitment and Employment Update – Summer 2018  and Civil and Structural Engineering – Recruitment and Employment Update – Winter 2018.

To follow this up we have put together a short half-year industry update for 2019 to ensure we keep our clients and candidates up to date with any changes that we are seeing in the marketplace.

So, what is happening in Civil and Structural Engineering from a recruitment point of view?

IR35 is coming – 2020

Back in the summer of 2018, we were awaiting the HMRC’s off-payroll tax consultation close off on the 10th August which would determine the fate of the liability for a contractor’s employment status in the private sector (as it did for the public sector back in 2017). As of writing this in July 2019, the determination seems more certain with the proposed implementation of IR35. Simply put, depending on whether a contractor falls within IR35 or not, will determine whether a business/agency will be liable to make the relevant deductions for PAYE and National Insurance before paying the limited company contractor.

What will this mean for clients and candidates alike? Without a fixed decisions on IR35, it is hard to say but we are still attending industry seminars and gaining more information on the subject so we are prepared to advise our customers. Final decisions will be implemented by April 2020 and we will be sharing further information as it is clarified. If you would like to arrange a visit from Jake Jessey who is leading the IR35 advice at FRAME, please don’t hesitate to get in contact.

Pay band ceilings reached

We have been experiencing a more passive candidate pool for higher level roles. We appear to have hit a pay band ceiling for these senior candidates and there isn’t enough money to seriously attract highly experienced away from their current roles.

We have seen an increase in new job offers being rejected by candidates. Some senior candidates are using job offers to enable counter offers at their present employment. Even if these counteroffers are only offering small pay rises, it does ensure they receive a pay rise one way or another.

BREXIT – 50/50

As of writing this in July 2019, we are no closer to seeing the final withdrawal agreement of BREXIT, just the announcement of our new Prime Minister Boris Johnson. There has been a mixed reaction from our clients and candidates with many citing ‘business as usual’ whilst others are not making major business or career decisions before the final deal has been brokered.

Experienced senior candidates (8 years’ experience plus) have especially been holding firm in their current roles with a reluctance to make a change with a fear of last in first out, as well as mentioning concerns of a potential recession. This has been seen in particular within the Structural Engineering market.

From a client perspective, the large consultancy firms remain confident in the market although they are aware business could be better. Smaller businesses appear to be suffering more. Our clients are keen to keep hold of their current talent pool even if they are experiencing difficulties, due to fear of being unable to replace staff when the market improves and they are needed.

It is hard to say what BREXIT will bring for the market as a whole. The next few months may give us all more clarity, but we thought this 6 months ago and so let’s not hold our breath!

Plug and play candidates

The last 6 months have shown continued caution from our clients to not hire candidates that don’t tick every box. Hiring Managers continue to be very particular in their selection of new hires as they need to be absolutely certain before offering employment.

We see employers being very particular in terms of the person specification for new hires, almost a ‘wish list’ of attributes. This has meant that often they feel more comfortable in holding out for longer periods in their hiring process to ensure that they hire the perfect ‘plug and play’ candidate.

Clients continuing to be careful in their hiring plans but ultimately businesses are still hiring.  They simply require the best fit for their business, with the perfect skill set.

Frustrated Clients

We have been speaking with clients who are frustrated with the talent pool available. Some clients are finding that if they don’t add new talent to their teams then they unable to bid for work, due to the lack of skill and manpower available to them to complete new projects. This is discouraging for clients who are keen to grow their businesses. In fact, we have spoken to clients who have simply had to turn work away as they would rather not take the work on than risk employing the wrong person or having to pay too much.

The last recession still haunts the candidate market

No one could have predicted that the last recession would still be affecting the marketplace in 2019 but today we are experiencing a candidate short section of the market, particularly those who have over 5 years of experience. Sadly, many graduates from 2008 to 2013 found that the recession meant that there were limited opportunities and had no choice but to explore options in other busy sectors.

What this has meant is many companies are now training and promoting internally. This has created some satisfaction for lower level employees that their career progression opportunities are improved. This clearly slows down the recruitment market and forces more businesses to take on less experienced candidates and create more ‘home-grown’ talent. In reality, some businesses are not prepared to do this, particularly small businesses that simply cannot facilitate it. This has changed some employment practises from purely permanent hires to considering contractors more seriously to plug the skill gap.

Other businesses are simply ‘bunkering’ down and keeping hold of the staff they have got and are not hiring.

In summary

Will Brexit be resolved anytime soon? The impact of Brexit will clearly have an impact on this marketplace. At this stage, however, you would be incredibly brave to forecast the outcome. Our FRAME Recruitment team continue to recruit at a good pace and will continue to report on any new changes as they occur. For now, if you are looking to expand your team, do not hesitate to contact us and discuss your specific requirements.

I always welcome feedback on our findings and would be delighted if you would like to discuss any of the trends in further detail.

 Martin (4)

Martin Bennell BA (Hons) FIRP CertRP
Managing Director, FRAME Recruitment