Bibby Financial Services comments on spending review
Commenting on last weeks Government Spending Review, Edward Winterton, recruitment finance spokesperson for Bibby Financial Services, said:
Whilst George Osbornes confirmation of 490,000 job cuts within the public sector over the next four years comes as no surprise, it does pose several key challenges to the UK recruitment sector and economy as a whole.
To date, job creation in the private sector has done much to counterbalance the sharp decline in public sector jobs, however the loss of nearly half a million positions in the public sector raises the question, how much further can the private sector go to absorb these losses?
Osborne assures us that the Government plans to do everything it can to mitigate the impact of redundancies by supporting the private sector and helping to stimulate job creation to offset the cutbacks in the public sector. This is a tall order but it is vital the Government sticks to its word if the UK is to keep employment levels at a stable rate.
Despite these challenges, the job cuts open up great prospects for agencies looking to take advantage of a surge in the number of public sector candidates with specialist skills looking for positions. Savvy agencies will do well to seize new opportunities in diversifying and expanding into new markets in order to marry these skills with suitable roles. Therefore, the cuts have the potential to spark competition within the recruitment sector and encourage growth.
However, as with any expansion of a business, cash flow is king and agencies should not forget the importance of having a robust funding reserve in place to accommodate growth. Recruiters should identify where cash is tied up now to spot potential bottlenecks and act to reduce their impact.
Seeking cash flow funding solutions, such as invoice finance, can enable firms to do this by providing them with an immediate and ongoing injection of cash into the business against the value of outstanding customer invoices. In addition, outsourcing back office functions, such as managing payroll and credit control, can also save agencies valuable management time, allowing them to concentrate on developing their business. With these processes in place, agencies will have the confidence, support and peace of mind to take advantage of these challenging economic times.