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10 October 2022

10 October 2022

If we are heading into a downturn, it's not yet impacting the jobs market

Jimmy Bent shares his insight into the jobs market in his latest BDonline column

We may be living in the shadow of a looming downturn, but there is still strong demand for good staff.

Recession is a word that strikes fear and dread into most of us, and with good reason. The 2008 recession was the longest and deepest recession since the Great Depression of 1929, and it took 5 years for the UK’s GDP to recover. With talk of another recession back on everyone’s lips, it may be worth looking at what, if anything, is different this time round.

Those who were in business at that time will remember the dark days following 2008. We saw mass redundancies; unemployment reached its highest rate since 1995 and almost all industries were severely hit. For the architecture industry, many companies shrank in size and output and, as we all know, some sadly didn’t survive.

But prior to the markets crashing in 2008, there were signs of a downturn even as early as 2007. At Bespoke Careers, we saw projects being put on hold, vacancies drying up, temporary contracts being terminated, and permanent offers rescinded.

Nearly every call we received over those first few months was from someone who had just been made redundant. People were, understandably, very anxious about their future and open to underselling themselves for the sake of security.

Now, with the threat of another recession looming (some sources say we’re already in one), it feels like we’re coming at this from a different angle. For one thing, it’s not going to be as much of a surprise as it was for some in 2008.

"The companies that are hiring are still full-steam ahead"

At Bespoke, while we’ve seen a few firms make a small number of redundancies, it is nowhere near the scale of previous downturns. And yes, there has been a recent slowing in new vacancies, but the companies that are hiring are still full-steam ahead, and the market, in general, is still incredibly candidate-short.

This shortage has created a very distinct difference in this pre-recession atmosphere – it is the workforce that has the power now and they are calling the shots and companies are scrambling to secure them.

It’s no secret as to what has created this situation. The perfect storm of Brexit and the pandemic means we’re in a skills shortage like we’ve never seen before. The result of the referendum in 2016 led to many EU citizens leaving the UK.

Then the pandemic hit in March 2020 and more people left, returning to their home countries to ride it out. Many never came back.

In 2021, we closed the door on free movement, limiting the number of talented designers arriving from Europe, starving the UK architecture industry of a workforce that it has always relied on and been enriched by.

Bespoke is in touch with candidates who are now back in Europe and although many of them have settled status for the UK and excellent experience working for UK firms, these candidates currently have no intention of returning. And, let’s be honest, can you blame them?

"This unprecedented candidate shortage means applicants are receiving multiple job offers"

Border closures of the pandemic also put an abrupt halt on the steady stream of designers from Australia and New Zealand who were always keen to get UK experience, often opting for contract positions with big name practices. Thankfully, we are slowly seeing their return.

The homegrown talent pool has also reduced. City-dwellers who opted to forego expensive rent and rush-hour commuting for a better work-life balance, abandoned cities in droves and many of them are unlikely to return to urban living.

This unprecedented candidate shortage means applicants are receiving multiple job offers and can pick and choose their terms; salary demands have increased, counter-offers and bidding wars are not uncommon.

Unsurprisingly the biggest shift is attitudes towards flexible working. For the majority of people hybrid working is non-negotiable and they won’t even consider joining a company without some element of flexible working.

We have seen a huge increase in called-in work from companies who have tried unsuccessfully to recruit on their own, turning to us and our network to get ahead of their competition. This tells us that the market is yet to feel the full pinch of a recession. However, as we enter another turbulent economic period the number of available jobs will inevitably reduce, meaning a level of equilibrium will return.

As we continue down this bumpy road, it’s worth noting that our industry has survived a recession, Brexit and the subsequent downturn, as well as a global pandemic and it has come back fighting every time. These challenges and strains have taught us to adapt and improve and as a result we have become more resilient and better prepared for whatever the future holds.

Visit BDonline for the latest architecture and design news here.

Author: Jimmy Bent, Managing Director, BDonline

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