Dave Leyshon comments in Recruitment Consultant (Nov 08)
The UK’s unemployment queue is getting longer by the day. The latest figures from the Office for National Statistics (ONS) show that the number of unemployed people in the UK rose by 164,000 to 1.79m in the last quarter and in September alone those seeking Jobseeker’s Allowance rose by more than 31,000 bringing the total to just short of one million claimants.
Pressure on jobseekers to return to employment at the earliest opportunity through Government schemes designed to ensure they become taxpayers as opposed to tax-spenders, mean blanket job applications are bound to spike. Recruiters are going to be busy.
The great wave of the newly-unemployed is not the only reason staffing firms are finding themselves deluges with candidates; hundreds of thousands of workers in threatened industries, from banking to construction, are also seeking inclusion on recruiters’ databases to counter the threat of redundancy. Coupled with a reduction in vacancies, the labour market is seeing a seismic shift.
Response rates
At the grass roots level in the industry however, optimism about the future still exists.
There is a dichotomy of thought about the rapidly increasing levels of job responses – marketing staff are keen to point to the increase in traffic to their websites and use it as a major marketing point, while some consultants will see change merely as increased admin to reach the same targets in a tougher market.
“We are finding now we are getting too much response in certain areas, particularly admin, as it’s now so easy to respond to vacancies,” says Synergy Group’s marketing manager David Pyle. “Our cost problem now is dealing with the increase, but you have to look at each candidate otherwise you may miss the right one – of course with that increase in candidates there’s a huge increase in the quality of the candidates. If you don’t take time to filter properly you will miss out. Whereas before we were spending a couple of hours dealing with the amount of CVs we are now taking half days or more to go through them and we now feel there is a need for a filtering system.”
“I think the changing industry is a good thing as it’s very difficult to make an impact and find opportunities when things are stagnant. It it’s moving up of down there’s going to be opportunities; although this won’t always make us popular we like it to a certain extent and even rub our hands together at the thought of it. As they say adversity is the mother of invention; the last downturn had a major effect on our growth.”
He is quick to point out the caveat that recruitment is too often seen as an easy game to take on for individuals recently made redundant, but believes the barriers to entry erected by VMS are sufficient to keep the adverse effects on the bona fide industry to a minimum.
Margin call
Tom Liptrot, director of temporary recruitment agency Esprit People and permanent recruitment for Permanent Futures, believes that a battle of sorts is about to commence: “Right now the biggest threat to the industry is an emerging bidding war. With fewer and fewer roles up for grabs, firms are having to be more imaginative about how they win positions,” he says.
“The industry sorely needs a period of modernisation. The current glut of recruitment firms in the UK will experience a natural adjustment through mergers and acquisitions, as the less imaginative agencies continue to undercut one another to win the spoils of a counter-productive bidding war. The more creative and evolved recruitment agencies will survive by finding their own niche markets within the sector and establishing their expertise there. Savvy agencies will also ensure that they get personal with their clients and candidates, understanding their needs and only offering up truly viable matches, rather than a scattergun tactic of putting forward as many candidates as possible in the hope that one will stick.”
He is also keen to point out that the economic downturn isn’t all bad news for the recruitment industry adding “There are certainly still placements to be made out there and a noticeable and predictable trend in businesses seeking staff for peak times or as a secure stop gap to give them more flexibility following redundancies of permanent personnel.”
Candidate care
Kent-based Acorn Recruitment’s Geoff Newman says that a renewed approach to ‘people skills’ and awareness of candidates’ sensibilities are vital in the current climate. “It’s how you deal with the growing number of candidates, dealing with them in a caring manner which is now a great challenge,” says Geoff.
“You have to explain to them why you have not put their application forward and hope they understand.” Geoff believes he is well-equipped to deal with the economic downturn and its effect on recruitment having been through two previous recessions in the industry. “I know what to expect, it puts more pressure on our resources and you find yourselves suddenly having to be a lot more proactive rather than reactive, but if anything it will make the dependency on recruiters even more important.”
And despite certain areas being hit dramatically by the downturn – most noticeably, according to Geoff, the conveyancing departments of legal firms because of the housing slump – he is another who sees the challenges as potential profits.
“We have just had our figures for the quarter up to September and that’s up three per cent on the previous quarter – so it’s not all doom and gloom,” he concludes.
Planning ahead
This seems to be the message coming through regarding the current state of financial affairs: as with all industries, recruitment is evolving and diverse, nota homogenous, one-size-fits-all entity and certainly not a market where one company’s successful policy will work in another firm during tougher times.
But certain policies do need to be in place, No matter how rocky the road ahead, preparation can only help to get the end of the current turbulence.
CBSbutler’s managing director David Leyshon has some sound advice.
“While there’s no doubt that in some sectors we have entered a client-led market, those recruiters who are now changing their marketing and working practices to reflect this are really already too late.” h warns. “To run a sustainable recruitment business, you need to be giving all your customers – whether they are clients or candidates – a quality service whatever the economic climate. Those recruiters who had the right candidate at the right time – but who did not offer the service to go with it – will now find it difficult to sustain client relationships. These are the same recruiters who may now choose to drop service levels to their candidates in favour of chasing clients.”
“My view would be that you should be marketing to your candidates more than ever – giving them advice on how to cope in a tightening market, helping them hone the skills they may need to find a new job and making sure that there is an efficient process in place for dealing with big increases in candidate enquiries. They are, after all your clients and more senior candidates of the future. I have to say that in our sector, technical and engineering recruitment, the war for talent is still very much alive and well – as it has been for some years. But that hasn’t stopped us from being very proactive in providing added value services to our clients. To me that’s just common business sense.”
There is no crystal ball which will allow recruiters to see exactly how the present situation will play out but planning for possible outcomes and being responsive to the challenges which the changing market throws up is vital for firms to survive. And while the industry is undeniably shifting as the candidate-led market flips, the lengthening queue at recruiters’ doors will always be better than no business at all.
