The pandemic, which triggered a global economic crisis, has also left its mark on the labour market. Last year we saw recruitment processes halted, job vacancies frozen in companies, mass layoffs of employees, and reductions in working hours. How is 2021 shaping up?
How prepared are companies for the continuation of the epidemic?
The epidemic vs. companies' readiness
The Covid-19 pandemic has affected almost every sector of the economy. Although initially employers were forced to make quick and often unpopular personnel decisions, LeasingTeam's analyses and observations show that currently 100% of clients are prepared for the next stages of the pandemic. This is because in Q3 and Q4 2020 they adapted workplace management to the guidelines and implemented new solutions and procedures fairly quickly to maintain the continuity of their operations. Wherever possible, remote or hybrid working models were introduced, which have now become the standard in many companies. Although the whole process required time, good organisation and involved unplanned costs, it certainly helped minimise the risk of infection.
2021 looks set to be a year of stabilisation and caution. Teams that need to be built to grow the business are being created, but these are mainly employees needed here and now, immediately, rather than hired as an investment.
A specific situation in the IT industry
The IT market in the shadow of Covid
As far as sought-after specialists and the way they work are concerned, the IT market currently remains similar to what we observed at the beginning of the pandemic.
- The processes we run are 99% remote-work-based recruitment. What's more, they no longer come with the previous time limitation of remote work until the end of the pandemic, but rather on a permanent basis. A growing trend is the acquisition of self-sufficient specialists with well-established experience. The problems that remote work generates in the area of "on-boarding" practically make it impossible to hire beginners just entering the profession. Online tools significantly facilitate communication within the team but also have their limitations, which in the longer term affect so-called "team spirit" and work in a company with not fully systematised processes. Moreover, remote work requires self-reliance and focus on the task from the specialist. Not everyone copes with this, which translates into problems with meeting deadlines and the quality of work performed. In addition, we have observed growing employer concerns about data security and company secrets. Remote work brings with it potential freedom as to the place and time of its performance, while at the same time significantly raising the requirements placed on the IT security department in the area of securing equipment and connectivity, as well as managing IT systems – explains Anita Długosz, board member of IT LeasingTeam.
Can employees expect pay rises in 2021?
Pay rises in 2021
The situation related to Covid-19 has slowed wage growth in almost every industry. Although the national minimum wage rose by almost 8%, this will not translate into widespread pay rises. - Employers count every pound and think hard before spending it. The market has also seen a greater availability of candidates, who additionally lower their financial expectations. As a result, current employees rarely have the opportunity to receive pay rises. We even hear voices saying that maintaining full-time positions is itself a raise. Those most likely to receive higher pay are people in specialist positions that are hard to find on the market – says Anna Jurkiewicz, regional outsourcing manager at LeasingTeam Professional.
Statistically, the e-commerce and retail (food) sectors did not suffer from the pandemic and even gained from it. - Although we are recording wage increases in the former, the retail sector is definitely more restrained. Employers first limited or completely froze previously planned pay rises and withdrew bonus payments or other wage supplements. This trend will most likely continue through the first half of 2021. The lack of pay rises in retail, especially in Q1 2021, will also largely be linked to burdens imposed on entrepreneurs, the so-called retail tax and sugar tax. If pay rises occur, they will be slight, aimed at retaining the current workforce. Large-scale hiring is not planned either, and seasonal or one-off staffing needs will be filled with temporary workers. Thanks to this solution, entrepreneurs can flexibly approach the fulfilment of orders and seasonal peaks while maintaining a permanent workforce. It is also worth emphasising that there has been very significant automation of the sales process on the market, i.e. many companies have invested in self-service checkouts, which allows for workforce optimisation – says Katarzyna Dąderewicz.
What awaits the recruitment industry in 2021?
What awaits the recruitment industry in 2021?
When considering remuneration issues, it is worth referring to the NBP's inflation report. According to it, in the second half of 2021 a gradual unfreezing of wage growth is possible. The dynamics of work and the related stimulation of the market will affect the economic situation, which will enable employers to successively restore non-wage benefits as well as return to planned pay rises. In this year's report, average year-on-year pay rises are forecast at 3.4% in Q1 to 5.9% in Q4.
3 observed labour market trends in 2021
1. Recruitment and remote work
Labour market trends
2021 is above all a time for calmly establishing the rules of remote work. Most employees have come to appreciate this form of carrying out duties, and employers increasingly see in it an opportunity to reduce costs.
2. Career changes among employees
Observations by LeasingTeam Group show that many candidates from various industries, especially those most affected by Covid-related restrictions, declare a desire to change careers permanently and give themselves a better chance of stable employment. This mainly concerns workers in the fitness, restaurant, events, entertainment and retail industries.
3. Headhunting still demanding
Since the second quarter of 2020, the work of headhunters has become even more demanding and time-consuming. Employees who are not actively looking for work approach proposed offers with great caution, fearing the loss of stability, choosing the wrong company for them, or not proving themselves in a new position and having to look for employment in a difficult Covid market. Employers should be aware that in 2021 acquiring talent will be more difficult, and the help of a professional headhunting agency will often be indispensable.
2021 in the HR industry marked by stabilisation and caution
2020 was a year marked by the COVID-19 pandemic. The rapid spread of the coronavirus and the resulting great economic crisis gave impetus to many changes that are visible in the employment sector. At the beginning of the pandemic we experienced a sharp slowdown and reduction in employee hiring, only to slowly return after a few months to a more stable labour market, which we will most likely observe in 2021. HR departments will continue to play a very important role in organisations, and this role may even grow given the changing economic conditions, in which proper human capital management is crucial. Hiring or using the services of specialised HR Business Partners will be indispensable in the current market realities.
Summary
2021 on the labour market looks set to be a time of stabilisation and caution. Companies that have adapted to pandemic realities are ready for the next stages of the epidemic, and recruitment – especially in IT – is based mainly on permanent remote work. Employers are cautious about pay rises, although the NBP report points to a possible unfreezing of wage growth in the second half of the year, with forecast year-on-year increases ranging from 3.4% to 5.9%.
LeasingTeam experts point to the growing role of HR departments and more difficult headhunting. Candidates from industries hit by the crisis increasingly declare a desire to change careers, and flexible forms of employment, such as temporary workers, are gaining in importance.
