Impact of the coronavirus crisis: thinking ahead

It feels like more has changed over the last four weeks than in the last four years- and that's saying something! Amanda McCulloch reflects on recent events to impact the local recruitment market and discusses the potential consequences.

Global events we could not even have conceived of several months ago are now shaping our working and personal lives.

The Coronavirus pandemic amplified the consequences of the Russia – Saudi Arabia oil price war. Demand for crude has dropped as stringent restrictions on personal movement grip the world. At the time of writing, industry analysts predict that the market is not yet at its lowest and oil prices may plunge further, despite the OPEC+ agreement, as oil storage capacity maxes out.

Coronavirus is indiscriminate, every business in the UK has been affected. But the north east is also significantly influenced by the oil price which had been on a constructive course towards recovery.

We are working in a perfect storm where this rare combination of events has created an unusually bad situation.

Capital expenditure is slashed. Operating expenditure is under massive pressure. Projects are deferred. Cash is king. The definition of a key worker now includes job roles classified by the government as "low skilled" only a short time ago. Many businesses face a fight for survival.

The Chancellor's intervention to support workers and companies is very welcome and although the mechanics of every initiative, grant and loan are yet to be fully understood it is my personal hope, as a recruiter and business owner, that the Job Retention Scheme will fulfil its purpose and protect jobs. Providing support to enable employers to battle through the coming months and retain their skilled workers.

In an 11th hour decision, the government postponed the controversial changes to the off payroll working rules (IR35) by 12 months to April 2021. It is a pity that this decision was made when the majority of contractor status changes had been affected. Now, companies are deciding whether to continue to hire a contractor on a PAYE basis or to unpick this work and revert back to a personal service company (limited company) contract.

National figures from the Office for National Statistics "Coronavirus and Homeworking" report suggest that only 30% of the UK workforce has ever worked from home before.

This leads me to conclude that this crisis is the first experience of home working for an enormous number of employees and employers in the north east. We've all had to execute plans quickly, undoubtedly, in many cases, finding ourselves under-equipped to deal with the change.

And I'm not just referring to hardware and IT infrastructure. But to culture and communication too. The government has been criticised for confused communication but, there were probably times in your organisation when cascading communication was slower or less coordinated than you would have liked it to be.

We have no idea how long the "lockdown" will last, or when the guidance on working from home will be relaxed. Flexible, home working has long been a much-valued benefit by workers, but this is different. It has been imposed upon us and the reason for it is frightening and very serious.

Nevertheless, the way we work is changed forever, with remote working likely to become commonplace rather than exceptional.

You may think me foolhardy to make predictions now, so I won't stray far beyond what I am already beginning to witness;

  • This terrible shock to the system has made us think differently. It has brought out the best and worst of human nature. But it has also provided an opportunity for individuals to demonstrate leadership, identifying themselves as high potentials in your company.
  • All businesses, irrespective of size and sector will invest more time contingency and scenario planning.
  • Invigorated by the agility of teams under pressure, employers will more readily adopt, or at least more readily trial, new practices.
  • Barriers to remote working will be largely removed and remote team working will increase, facilitated by easy to adopt tech.
  • Unfortunately, as the supply chain is squeezed areas such as training and development will continue to be under resourced.
  • Candidate confidence was beginning to inflate salaries at the turn of the year. But this confidence has evaporated and in conjunction with economic conditions, we anticipate cuts to rates of pay and redundancies.
  • Interim specialist skills for strategy and project work will be in demand and temporary workers, while being an obvious cost to cut now, will realise their value as a flexible source of skills.
  • Executive reward packages will come under scrutiny, particularly in organisations where costs are slashed and jobs are under threat or lost.

I would be very interested to hear your insights and experiences during this incredibly difficult and fractious time. With so much to consider we believe that it is good to talk, to learn from each other, stay in contact and try to help where we can.

Please contact me or a member of my team directly. We are here if you need us and, most importantly, stay in good health.

Amanda can be contacted on

Amanda McCulloch, managing director, TMM Recruitment Ltd

Amanda McCulloch, managing director, TMM Recruitment Ltd