March 17th, 2017 | Industry News
2017 budget and recruitment
In a week where a budget U-turn created a lot of heat in the recruitment industry, we thought it would be a good time to bring some light to the Chancellor’s budget decisions, and how they affect recruitment, both permanent and temporary.
The U-turn was on NICs, of course and was welcomed by many lobbyists for the self-employed, but increasing National Insurance wasn’t the only impact that the 2017 budget had on recruitment, and a couple of less headline-worthy issues may definitely change the way the UK recruitment industry operates.
The Chancellor announced that the dividend tax allowance of £5,000 per annum will be cut to £2,000 from April 2018 and this applies to every taxpayer, not just single directors of shareholder companies. This was the only firm conclusion from the government’s announcement that the 2017 budget would include consultations on employee expenses and the taxation of benefits in kind. While these consultations are still up in the air, it’s certain that recruitment agency software will need to demonstrate high transparency to ensure that problems do not arise with HMRC in future.
Even more important, employment software will need to distinguish clearly between employees and self-employed workers from the applicant tracking system stage, right through the recruitment system, to avoid attracting HMRC attention. This has been highlighted by the fact that while there were no IR35 announcements, there is still the possibility that government will choose to extend the new provisions relating to off-payroll employees in the public sector which take effect on 6 April 2017. This would lead to a substantial demand for recruitment software to be transparent about the employment status of all employees within an organisation.
Brexit and building
In a week when the British Hospitality Association claimed that businesses like restaurants and hotels could close if government ministers don’t allow staff from EU companies to remain in the jobs, the construction industry has also highlighted concerns about a hard Brexit and labour. Of 2,000 firms surveyed, 84% said EU construction workers should have free movement when the deal was struck. Construction industry recruitment platforms are highlighting how few British people wish to work in construction with 9% of parents saying they would actively discourage their child from taking a job in the building industry.
Whatever the Brexit negotiations produce, online recruitment software will need to be flexible and scaleable to ensure that those using it are able to clearly differentiate many streams within their staffing software. This is a requirement not merely for taxation purposes, or to ensure that Brexit provisions are met, but to allow rapid employment decisions to be made with a complete picture of the candidate, their skills and experience and how they will fit into the hiring organisation, whether temporarily or permanently. Without such adaptability, British firms are likely to find they are hit by a double whammy – slow recruitment processes may cost them the best candidates while non-transparent recruitment systems could draw unwelcome attention from HMRC.