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COVID-19 – Recruitment – the forgotten sector – an open letter to the PM

Dear Prime Minister

In reference to the devastating economic impact of Covid 19 to British business we are making an urgent appeal to the Prime Minister & Chancellor to recognise, along with other sectors, the vital importance of the professional recruitment sector to the UK economy. As the Chief Executive of the Association of Professional Staffing Companies (APSCo), our members place highly skilled individuals such as engineers; IT specialists; life sciences professionals and teachers - to name but a few - into the UK labour market. The recruitment sector is just as much a special case as aviation or hospitality and catering.

We are a critical industry because when we do finally come out of the other side of this crisis, the economy is going to need recruiters to get people back into work very quickly. UK plc will not get back up and running if large numbers of recruitment companies have gone out of business and the Government will not have any chance at all of realising its ambitious programme of infrastructure projects if there are no resources to deliver them. Historically we’ve always been seen as a bellwether of the economy. Consequently, there needs to be a live recruitment market to get people back in work and projects back up and running.

Many recruitment firms are experiencing their business activity literally falling off a cliff – permanent hiring is almost at a standstill and assignments are being terminated daily. This is particularly pertinent, but by no means exclusively relevant, to the education sector where supply teacher recruitment has now completely stopped.

Recruitment firms have to pay workers before they themselves are paid and so cash flow, which even in a business as usual scenario is a fine balancing act, is now even more business critical. The reality is that recruitment firms are therefore already laying off staff.

So, we need support and we need it now. The measures announced by the Chancellor of the Exchequer Rishi Sunak earlier in the week are all well and good, but we still have no detail on how this support can be accessed – this is an immediate emergency and firms cannot wait. We would urge the Government to look at measures such as an Employers’ NICs holiday or VAT relief.

We would also suggest looking at what the German Government has done in terms of help with the payment of salaries – recruitment is a service industry and so salaries are by far the highest cost but with no revenue coming in then the ramifications are obvious.

We would also ask the Government for clarification on how they will support self-employed professionals as it seems their only route at the moment is the benefits system.

Additionally, we need urgent clarification on how the Government will define SMEs in terms of the proposed SSP refund in the emergency legislation. We don’t believe that the Government would intentionally penalise recruitment firms, but if their agency workers are included in the definition of an SME then that’s exactly what will happen.

Ann Swain

Chief Executive

The Association of Professional Staffing Companies

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