The first quarter of 2021 was a fascinating period for the UK economy. It is clear that significant struggles remain for businesses in many sectors, which will continue for the foreseeable future.
At the same time, however, there have been some extremely positive indicators that have raised confidence in the V-shaped recovery envisaged by the Bank of England in the early stages of the coronavirus crisis.
Our record month reflects a wider trend of growing positivity
I am very pleased to report that March was a record month for Eton Bridge Partners in terms of search revenue across our practices. Our results exceeded our expectations and in the CFO & Finance Practice we were particularly busy.
There are several interconnected reasons for this, which may be indicative of the mood in the wider UK market place:
- The Brexit deal at the start of the year – whether you supported leaving the EU or not – delivered a degree of certainty to British business;
- The roll-out of the Covid-19 vaccines, which has been conducted so superbly by the NHS, has given people confidence that the crisis will be over soon;
- Whereas 2020 was about survival, stability and cash, many businesses have decided to drive forward and implement development plans;
- There is a lot of cash sitting on balance sheets, and it needs to be invested;
- Many candidates who sat tight during 2020 have found a renewed appetite to take on a new role.
Between them, those factors have helped to create momentum for us – and, I am confident, for many businesses and sectors across the nation.
Economic indicators suggest confidence is growing
I am sure many of us remember the worrying forecasts made last summer about our economic prospects. There were suggestions, for instance, that the employment rate in the UK might reach as high as 15 per cent. Towards the end of Q1 this year, however, that rate was still running at just over five per cent.
It will remain important to monitor this figure, and to gauge the impact of the pandemic on the workforce. The age group hardest hit is the under-25s – maybe there should be a strategy to ensure a supply of good opportunities, not merely zero-hour contract jobs.
However, it was encouraging to note that in the three months to February, the number of workers on company payrolls rose by 200,000. Additionally, according to PwC’s annual CEO survey, the UK is now the world’s fourth most promising growth opportunity, behind the United States, China and Germany.
Speaking of the USA, a less volatile presence in the White House appears to be having a calming influence economically and politically. President Biden has announced a $1.9trillion Covid-19 relief package and some 916,000 new jobs were created in March, a trend that looks likely to continue.
Closer to home, there have been some spectacular results. For instance, the move to online fashion shopping lay behind the eye-catching 275 per cent rise in ASOS half-year profits announced recently.
Chancellor’s support for business is delivered empathetically
Confidence in hard-hit sectors has been bolstered by continuing support from the Government, which re-extended the furlough scheme.
At some stage, there will inevitably be a drive to reduce a national debt level of more than £2trillion, but for now, income tax thresholds have been frozen and the Chancellor’s latest Budget was generally well-received. Our clients remain in a confident mood.
I do think Rishi Sunak has been the shining star of the Cabinet over the past 12 months. You may say he has had little competition on that front, but he does communicate empathetically and authentically.
Clients favour the hybrid model in the “new normal”
I was intrigued to see Goldman Sachs announce it will expect all employees back in the office five days a week when the guidelines are relaxed sufficiently. At the same time, Twitter has said its staff will never have to come in to work again.
The overwhelming majority of our clients have said they will follow a hybrid model, with their teams spending some time in the office and some working from home.
The way senior figures need to manage their teams is changing too. Our clients say they have recognised the increasing importance of being more actively involved in their employees’ wellbeing.
Businesses will use their offices differently. Many will need less space and will downsize as a result. It was interesting to see JP Morgan, for instance, state that it will need “significantly” less office space in future.
When teams are in the office, there needs to be a reason for their presence. People will want to collaborate, innovate and connect – and to have a bit of fun too.
Candidates taking an increasingly ethical stance
The changing workplace will be on candidates’ minds when they are under consideration for a position. The way companies have performed over the last year – and, moreover, the way they have treated their people – will come under scrutiny. If you have dropped the ball and let yourself down economically and ethically, you could pay a price for that.
Similarly, we are noticing an increasing focus on the related Corporate Social Responsibility, Diversity & Inclusion and Environmental, Social and Governance agendas.
These are significant considerations for the younger generation, who are thinking more broadly about what they want from their employers.
Enhanced focus on the importance of work-life balance
Many candidates have told me that 2020 was an eye-opener for them. They have seen that life can be short and cruel, and as a result do not want to be working 80-100 hours a week.
People are taking a different approach, looking for a better work-life balance, which can be partly achieved by working from home more and cutting out commuting.
Some people have told me they want to retire early, while others are moving away from the city to enjoy a more rural lifestyle.
We are already seeing people casting their net wider. I recently drew up a shortlist for a European CFO appointment in Surrey and one of the candidates lives in the West country. They would make a single trip each week, spending a couple of days in the office and the rest working at home. The client wouldn’t have been comfortable pre-Covid, but now they are much more open.
It is important that employers take into account this changing mindset among potential employees when they are looking to fill positions in the near future and beyond.
We are living in a fascinating period and, for all of us, it will be intriguing to see what developments and challenges Q2 brings.
BBC – Unemployment rate: How many people are out of work?
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