David Leyshon comments in Recruitment Consultant - March 09

Jim Tanfield of Recruitment Consultant talked to three recruiters about their businesses and the challenges ahead.

It may be all in the mind, but as the snowdrops make way for daffodils can the staffing sector will itself recession proof by spying the green shoots of recovery in the right places?
It is incredibly difficult to have a one size fits all recession, some recruiters are really suffering, some are faring pretty well and others have disappeared altogether.
Several big hitters are looking to invest in smaller outfits for numerous reasons including expanding portfolios and having a wider customer base as protection in these unprecedented times.
But is it that bad and is good business practice enough to avoid falling into the canyon?

Streamlined security
With a single office in Croydon and employing 18 staff, CJ Recruitment has its own take on the situation.
The company recruits on a generic basis from college level up to directorate positions so is well placed to take a cross-sectional view.
Although managing director Catherine Johnstone believes this is by no means the worst crisis she has faced since she established the firm 30 years ago, she has had to make tough decisions regarding the current economic situation.
She said: "We opened in `79 in the middle of a recession and found ourselves in the midst of one 20 years ago as well, but it was a very different kind so this time we did try and make sure we were in as good a position as possible with the control we had."
The company undertook a complete audit of the business at the beginning of last year which Catherine says was for many other reasons aside from good practice and made sure that everything it was buying in was at the best price available.
"We actually had to make redundancies for the first time in 30 years, however, we are a very robust company in the fact that we always have money in the bank and always plan for rainy days; but I think the difference is the lack of control now, if we go under it will not be to do with bad practice, due diligence with clients or anything like that.”
Business strategy also had to change as Catherine explains: "We actually cut our database to get rid of those who we thought were high maintenance and low return, that was quite brave at the time, but actually its paying dividends now as the clients we do work with we have very good relationships with."
Like never before many of the younger companies are having to get their consultants on the phones looking for business, not so at CJ as Catherine says: "We have not gone out on a sell, sell, sell business on the phone as the clients told us they were sick to the back teeth of all the sales calls."

Looking forward
Keeping good relations with existing clients is of course a no-brainer as well for CJ and Catherine says the company has a good grip on keeping them close and adds: "We have been running some very successful seminars aimed at clients such as one on the Agency Worker Directive, another on the relationship between HR and agencies and the next one we are holding is to be on grievance procedures."
"We are as strong as we can be as we have the most effective team we have had here in 30 years," adds Catherine. "In a perverse way are quite excited about it although you have got to make sure you don’t let people go and take something they wouldn’t otherwise be doing, that is so extreme, that they go and let you, themselves and the client down.”
Catherine, who was integral to the Recruitment and Employment Confederation`s Riding the Recession guide, believes July will be the start of the upturn for recruitment.
So does being a larger recruiter mean bullet-proofing comes as standard or because there is more to lose the risks are greater?

Bigger players
CBSbutler's managing director David Leyshon says: “Well I suppose we are slightly shielded in that we are working with specialist technical markets which have remained quite robust.”A lot of our business is related to defence and the energy sector which have an ongoing demand and large investment packages which we are committed to so we are somewhat sheltered in comparison to many others who are really taking a hit."
In the last quarter the company did notice slight panic and knee-jerk reactions as people were pulling in the purse strings which David said was keenly noticeable when there were a lot of job freezes being announced.
"However since the beginning of the new year we have seen a bounce back," David proclaims.
He adds: "In ball park terms our perms business has dropped by about 20 per cent and we have seen our contractor business drop by about eight per cent but we are clawing our way back up now.
"We are always proactive whatever the market conditions. and in October last year I did a presentation for the troops really analysing this so-called recession and my message to them was 'look, we have to cut through all of this doom and gloom that the media are throwing at us because that would pull us down if we listened to it'."
He continues: "So I broke it down and told them that there is a genuine 30% of this recession being driven by the banks, the credit crunch and the toxic debt of course we all know that. We also know about 50 per cent has been driven by the media, the doom and gloom merchants which are fuelling bad thoughts and would have impact on our clients so we need to see that it’s not all real and we need to cut through it."

David also insists that whenever there’s a downturn, that nefarious activities are always a potential pitfall: "Then there is 20 per cent of the recession will be people taking advantage of it, when there is no basis for it. People who look at pricing and decide to demand margin reductions; those who will push up payments.
"I have been reinforcing my points to the guys that yes there are challenges but we are in a robust industry and there is still a shortage of specialist talent and I have to tell them to ignore the doom and gloom merchants. "Despite the gloom there are people still recruiting even though there are massive redundancies taking place and there are people recruiting quite heavily, which we don’t hear about much. Those that are taking advantage, we need to be prudent and alert and have counter-measures in place."

Identifying need
So what is CBSbutler’s strategy to keep the coffers brimming? David continues: "We have taken steps to revisit KPIs and assess higher expectations; we have got clear plans where we are looking to maximise business in robust accounts whereby we are cherry picking and looking to maximise the visibility and distribution of those vacancies across the teams.
"We have also got a programme where our managers are tasked with working with their teams to identify areas where there is positive trend of investment such as emerging energy technologies and critical public sectors such as homeland security." The teams are also strengthening foreign accounts such as Qatar.
Antal is a player with its fingers well and truly stuck into foreign pies and CEO and founder Tony Goodwin has his own take on the current situation and says: “I think it’s fair to say the whole industry didn’t feel the impact until September or October when it really fed through to the other sectors and disciplines in recruitment terms.
"Interestingly in some of our developing markets such as Poland and China most notably, it didn’t really impact until January of this year."
He adds: "But now it really has taken hold and I have recently spoken to some of my franchisees across the UK and there has been a notable slowdown in the hiring divisions.
"This has impacted on replacement recruitment but it’s expansion recruitment which is all but on hold; with replacement recruitment people are taking longer and being more careful about the people they are taking on, taking longer doing reference checking and prolonging the whole interview process.
"They are still hiring and there are still jobs to be had but there is a lot of competition out there and there are a lot of recruitment agencies going after them and chasing them."
Tony believes that due to recruitment agencies re-tooling and targeting their guns in prosperous areas that there is a culture of an over-brokered and over-competitive market.
He also believes candidates are becoming more cautious as they are thinking 'why should I leave a secure job now to go into something that if they do hit problems I was last in so I would be first out?’

Upbeat advice
Antal now in its 17th year has a real eye on the global situation and Tony explains how this economic shift is different: "In 2001-03 it was very much IT tech focused," he says. "There was a general ripple in the rest of the economy in recruitment terms but it was a very sector-specific recession, this time what got hit first was the banking recruitment, so we`d hoped that it was going to be a banking recession, but now the contagion has most definitely spread into all sectors - and globally as well.
"We are now looking for acquisitions ourselves and we see this as an exciting opportunity and we are being cautiously optimistic."
Tony adds that the Fastrack 100 contains 24 recruitment companies that have been established in the past five years: "They won’t have as good a grip on treasury debt control which is really needed in harder times. They may be offering a really good service but they may be struggling and we want to attract them into international platform."
Tony concludes: "No-one is going to buy from a miserable recruitment consultant; those that are miserable will not survive."
This is by no means an umbrella view of the industry and in times of recession there are many companies which would rather keep their tactics to themselves.
However, all companies need to arm themselves with as many options as possible as unforgiving times call for new approaches.
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