One third of UK businesses defy pandemic to outperform 2019
A third of UK companies have defied pessimistic predictions this year by outperforming their 2019 results, as three quarters of business leaders look forward to substantial growth beyond the pandemic, new research suggests.
The resilience of British organisations, in stark contrast to the doom and gloom forecasts issued during the country’s first lockdown, is the welcome theme of a new report by independent UK recruiter Wade Macdonald, which reveals many businesses are in a more assured position at the end of 2020 than they expected to be just nine months ago.
It found that 36% of leaders have increased their staff numbers since the beginning of the pandemic, and 62% expect to recruit again soon.
The survey canvassed 140 business leaders, from a diverse range of industries, to explore if their initial business predictions had been correct or, indeed, whether trading conditions had been better or worse than they had feared since they were questioned in April. The April survey had revealed an extremely negative outlook:
- - 71% of businesses expected that they would have to reduce their staff
- - Only a third of businesses felt it likely they would recruit, and
- - 50% of leaders predicted it would take at least two years for the economy to recover.
While the pandemic has undoubtedly taken a toll on businesses of all shapes and sizes, November’s research shows that the overall picture is far less distressing than anticipated.
Recruitment & redundancies – expectations vs reality
In April, nearly three quarters of business leaders expected to reduce their staff numbers during 2020. While large staffing cuts were made, the numbers were not as extreme as those forecast. A total of 64% of leaders decreased team numbers but 36% reported they had grown headcount since the beginning of the pandemic. Seven out of ten respondents had used the government’s furlough scheme to prevent redundancies.
When surveyed in April, just one third of businesses were expecting to actively recruit over the coming year. However, this number grew exponentially over the course of the pandemic with 73% of respondents reporting to have recruited between April and November.
The factors for this unexpected change vary; from outperforming financial expectations, improved candidate confidence and greater understanding and investment in remote working to virtual onboarding and companies being able to work, and recruit, more effectively and efficiently.
While the end of the furlough scheme will present new challenges, this survey suggests that UK plc is adapting: “Many of us, thankfully, are now looking to the end of the year and into 2021 with a sense of optimism for repair, recovery and growth,” said Chris Goulding, Managing Director for Wade Macdonald.
Recruiters outperform expectations
The findings dovetail with recent announcements by global recruiters Randstad NV and SThree plc revealing better than expected fourth quarter results.
At Randstad, organic revenue growth improved to -4% YoY for October and November combined, versus -13% YoY reported for Q3. Randstad now expects to deliver a recovery ratio at the upper end of their previous 40%-50% guidance for Q4 on the back of good momentum for accelerating investments in growth and digitalisation, agile cost management and an increase in market share in the US and France. The Dutch multinational will publish its fourth quarter and annual results 2020 on February 9.
SThree plc, which specialises in STEM roles, announced an upgrade to its full year profit before tax amid strong performances in the US and Germany. Group net fees for 2020 were £310.9 million, down 8% from £342.4 million.
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