Reasons to be cheerful - An Industry View

 

© The Herald Originally published: 10/9/2008

by Simon Aston, Fraser Green Recruitment

I, like everyone else, know that the recruitment industry, along with the rest of the UK economy, is facing tough times at least for the next year and probably longer.     For many this means battening down the hatches and riding out the storm but recent conversations and experiences suggest to me that there’s plenty of opportunity in grim times too.   

Research has shown that three quarters of employers are considering a freeze on recruitment as a result of the credit crunch.   That’s certainly been my experience to date but it is very much a short term approach and indeed some organisations have changed their mind very quickly realizing that what they were doing was a knee jerk reaction to various reports and commentary on the credit crunch.

A recruitment freeze is seen as fix-it-quick option to employers as staff wages represent the highest cost to a business.   HR Directors will have a key role to play in ensuring that they stand firm against calls from the top to review headcount and put a freeze on recruitment.  Employers should first be looking to tighten their budget in other areas of the business before looking at a recruitment freeze. There is also a school of thought that in times like these job creation is reduced making candidates more plentiful which in turn puts less emphasis on talent management.  However companies in the know understand that proactive talent management happens regardless of market conditions and that the search for top talent is a continual process.      When the market returns, and it will, businesses will need to have the people in position to deal with new business, regardless of industry or sector.

What I have seen and experienced is that companies who are forward thinking in their approach have identified an opportunity to gain competitive advantage.    So while their competitors face cost pressures and go for the quick fix, they strengthen their talent pool therefore emerging stronger from a downturn.

When faced with tough economic conditions organisations still need to recruit.  Every business has staff turnover and many will be expanding locally and in overseas markets such as India and China.     Ultimately what I have found in some sectors is that spending has been cut leading HR teams to focus even more on ensuring the right person is selected.   This means that recruitment businesses should become an even more important part of the business.    Those that see the use of a recruitment business as a cost they can do without may wish to think twice.
Business leaders know all to well that getting the wrong person for the job can actually cost you money and dependent on what industry you’re in the best person for the job can actually make you money.  So the use of a recruitment company should be seen as an investment to any organisation and in times such as these where businesses are continually reviewing and amending budgets the temptation is to cut costs and people and recruitment seems to be the area a lot of businesses look at. . 
The recruitment industry is diverse and has various propositions.  There will be those that will be struggling, those that are keeping an even keel and those that are booming.    I believe on the whole that a business that has diversity such as Fraser Green has a better chance than those that put their eggs into one basket.   For instance our property recruitment has dropped considerably but Hospitality, Accountancy and Sales and Marketing divisions are achieving much better results than ever before.   All indications show that the engineering and technical sector is also doing extremely well and so far the credit crunch hasn't had any major effect on HR recruitment.    In fact, employment within the human resources sector is currently at a record level. 

So yes there are some recruitment freezes in place but not many; employers may be cutting recruitment spend but there are plenty of sectors doing well.   But above all there is still constant change – clients expanding, merging and acquiring; people looking for a move  – and it’s all that change which means we have much to remain positive about both in the short and medium term.