The first full Budget of 2017 is predicted to set out a plan to guide Britain through the Brexit years. But how will it affect recruiters?
Recruiters have been given a cautious welcome to anticipated announcements affecting business rates and STEM skills, ahead of today’s Spring Statement.
Recruitment companies in the Technology sector can expect a medium to long-term boost with the Chancellor planning to spend £500 Million on overhauling technical education. This will potentially create a fresh crop of candidates with tech expertise in the near future and improve the skills-scarce technology industry.
Also, there are two cuts to the rate of corporation tax which are planned for next month and in April 2020. This will see it drop from 20% to 19%, at least initially, which could release money for companies to expand and allowing new hire programmes to begin.
There will also be a tax increase for people who are self-employed, with a three pence in the pound hike expected. This will change hiring practises for recruiters who source contractors, agency staff and interims.
In particular, changes to the IR35 rule, which HMRC claims will bring self-employment taxes in line with that of company employees, which have been touted to disrupt contractor recruitment.
Furthermore, despite low interest rates the demand for credit is weakening indicating firms may freeze their recruitment plans and new businesses may not be expanding or looking to hire.
Recruitment and Employment Confederation's (REC) Chief Executive, Kevin Green, commented in this months Report on Jobs: "The Chancellor is expected to announce a boost for vocational training in today’s budget and this is very welcome. However, it won’t solve the immediate need for people to fill jobs. We’re already seeing acute staff shortages in a variety of sectors including engineering.”
Peter Livingstone, Director of Contracts and Interim at Redline Group comments: “Given the long acknowledged skill gaps and shortages, particularly in STEM roles, this announcement is a big boost, albeit distinctly late. Taking into account the threat of access to EU workers post-Brexit, we are still playing catch-up. The competiveness of UK industries is under real threat and notably, it’s been estimated that by 2022 one in five 21-year-olds will need to enter the engineering sector just to keep pace with demand for engineering jobs, manufacturing engineer jobs and mechanical jobs. Today’s jobs market is completely candidate-driven because of the crippling skills shortage in some industries, which is continuing to put more pressure on companies to find, attract and retain talent.”
For more information on Redline Group's Contracts Division, please contact Peter Livingstone, Director of Contract Division on +44 (01582) 878852 or email PLivingstone@redlinegroup.com.
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