A Tale of Two Ends
James Staunton, partner at international communications company, Instinctif Partners.
AI aside, I think the world of recruitment has been spoiled with great employment news. We’ve become accustomed to unemployment at 3.8 per cent, a 45-year low. To a record number of full-time jobs. To wages rising at twice the rate of inflation. To real wages sitting at an all-time high.
That’s made recent bad news slightly harder to swallow – not ideal for the governing party in the approach to an election. Employers’ confidence in the UK economy has dropped to the lowest level since mid-2016, according to new data from the Recruitment & Employment Confederation. Last month, I read that the number of new homes in England on which construction work began was down by more than 10 per cent to 38,020 in the second quarter of the year, compared to 42,480 in the same period of 2018. I read about the new starts falling just after I had read that Jackson-Stops was reporting the worst October for house prices in 11 years – as opportunistic sellers had given up on the process with only “must-movers” driving the market.
Does the future look any better? The Labour Party’s conference saw John McDonnell pledge to move towards an average full-time working week of 32 hours within the next decade. While, I don’t think my peers in the PR industry are going to want to work that hard, it’s not exactly a recipe for national economic growth.
Are there any industries bucking the trends? Where is the emerging demand? Where are the recruitment bright spots?
Well, just as the recruitment industry is becoming more niche and politics appears to be fracturing and polarising, I see an identical situation across consumer businesses. The budget and luxury ends of markets are growing as the mid-market segment withers in the same way that the hotel market started to fracture 15 years ago. Look at gyms. With membership waning, Fitness First has found keeping up with rent payments tricky and has been chopped up and forced through debt restructurings as a result. But look at the budget end of the spectrum and it’s a different story. Gym Group has doubled its estate over the past three years and is looking to add between 15 and 20 gyms to its portfolio every year. At the other end of the market, David Lloyd Leisure is doing almost as well and is set to open its 100th UK site in Bristol later this year.
Data from online travel agent eDreams ODIGEO points to a similar trend in travel. Its fourth annual European Traveller Insights Report analysed bookings data from more than 18 million customers to identify the top travel destinations of 2020 (I’d be interested to hear what C&M Recruitment make of the sector’s job market currently).
On the one hand, Tokyo was the top destination for Europeans to travel to next year, with an 90 per cent year-on-year increase in bookings. This is despite the Japanese yen being among a number of Far Eastern currencies against which sterling has fallen significantly.
Fort-de-France in Martinique and Pointe-à-Pitre in Guadeloupe made up the rest of the top three destinations. The Lesser Antilles are definitely luxury destinations. And where else is doing well? At the other end of the spectrum, bookings to Lanzarote are up 30 per cent.
Whichever end of this fracturing market you choose to embrace, at least you’ll have something to take you mind off the doom and gloom of the election campaign.