Recruitment and Recession
Recruitment and Recession.
Recruitment industry is going through a tough time at this moment, the numbers have dropped drastically for the biggies and I know of recruitment agencies that are battling for survival. Being a co-founder of Synergy Solutions (we provide recruitment services to companies in India and in US) the biggest challenge today is to find newer and better ways to add value to our clients. There is a need to find innovative ways to improve recruitment ROI for the client. I am writing this article to share our ideas with the world so that other companies in the recruiting and staffing business can take advantage of the same.
First things first, the base idea is not to wait and find ways to weather the storm but to take proactive measures to tide the wave. The world is changing very quickly to combat recession and it’s about time we translate our thinking into action or else we will be late. The main reason being the companies who are hiring have recently made drastic cuts in their recruiting budget and are in the process of streamlining their side of the story.
We strongly believe that companies (clients) will demand greater accountability from recruitment agencies and focus on improving their recruitment ROI. Recruitment agencies / staffing companies who are agile in their operation and can quickly adapt to the changing environment will emerge victorious at the end of this recessionary period. 
Few areas where placement agencies should focus:
- Closely monitoring the way each industry is changing in current times and the way companies within the industries are changing their hiring strategy.
- Build stronger relationship with clients thereby working closely with your contact points in the company to get clarity on their internal hiring plans and prepare accordingly. This will also help protect your share in the pie from your competitors.
- Clients will use this recession to re-negotiating the recruitment contracts with recruitment agencies. Since numbers are falling every day recruitment agencies will be concerned about their cash flow situation and as a result will have no option but to be forced to negotiate their existing contract. New client would want to start the relation on the terms advantageous to them, that means lower rates and tougher terms.
- Look out for companies who are brave and would consider recession as the right time to recruit good quality talent at the right price. These are usually multinationals with deep pockets and would want to drive competitive advantage home. Be smart to attack these companies.
- Train your recruiters to be tactically smart and agile in their actions. During the boom there were a lot of open positions and even more candidates available so the match making activity was comparatively easy and largely govern by the good sentiments in the market. During tougher times recruiters need to be smart and get themselves deeper into the fit gap process and ensure win – win situation for the client and the candidate
- Use of technology and social media applications to hunt better profiles as compared to job boards. Sites like LinkedIn, Facebook, Twitter and other social and business networking sites are fast becoming every recruiter’s trump card. Lot of head hunting can happen over these networking sites.
- If your salary component are on the higher side and you foresee that it’s going to be difficult to sustain then take adequate action now try and offer a mix of lower fixed and higher variable with an assurance that salaries will get back to normal once the market stabilizes.
It’s my gut feel that this recession will take good 6-8 months time before we see first signs of normalcy but by then I firmly believe this experience will help recruitment agencies to become further efficient in the way they add value to their client. I can go to the extent of saying that by the time we are out of this recession the recruitment landscape would have changed forever.
This is the time when we can pause for a moment and have a relook at our strategies and the way we operate our business. Once the good old days are back again only companies who have transformed themselves during this period will be the first one to see light at the end of the tunnel.
News items on current job markets are behaving across the globe
- Economic and hiring outlook, Third Quarter 2008: A McKinsey Global Survey
- Layoffs soar as India plunges deeper into recession
- The Incredible Shrinking U.S. Job Market
- UK labour market statistics
- Job market in Germany
- African job market
- Job trends in Australia
- Japan job market weakening
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Comments
Amit-Brilliant!!
As a recruiter, I am positive companies are hiring-but very very selectively-and after a lot of deliberation.
Couple of interesting trends:
1. The kind of talent that a company needs in a ‘growth market’ is significantly different from that they need in a ’stagnant’ or an ‘uncertain’ market.
2. Companies are seriously evaluating the value add for each employee. If the ‘cost of carrying talent’ is greater than ‘cost of training new employees’ -they have no hesitation in laying off people.
And yes, there is a lot of topnotch talent available-itching to do top quality work-at ‘reasonable salaries’!! And not all of them ‘inbetween jobs’
Happy hunting!!
Achyut couldnt agree more to what you have written. you views are on the spot the value add is really doing rounds the corporate world now a days be it candidates, clients, recruiters, consulting companies. every one is talking about recruitment ROI.
Being in this industry over 10 yrs, I feel that positive attitude and looking beyond our reach is what the time demands. We all know that the current situtaion will not last longer. However, I totally agree that companies are looking for the best among the lot to keep in pace with the market trend also taking care of their financial limitations.
Be positive and let the show go on.
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Using Video Conferencing for conducting interviews, saves you time and money besides reducing time to closure substantially. What’s more, seeing the candidate face-to-face also facilitates better assessment.
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I guess the reliance marketing team has got on to the social media marketing to promote their services
I’m in the recruiting business myself.
We all know less companies are hiring now, with the economic turmoil the world is going thru now. Are we just going to sit and watch, and wait till the storm is over, or are we going to look for some form of shelter?
Give some thoughts about industries which are always hiring, regardless of the economic situation. For example, financial sales such as investments and insurance, and the real estate. There was almost never a time they stopped hiring new agents, and they know too well this is the best time to increase their number simply because there are more job seekers than there are offers.
So is it the best time for recruitment firms to re-evaluate their scope of supplies. Solutions to problems always mean money. Now if you know someone has a problem in hiring new bloods into their industry, will you make money if you have the solution?
Recruitment firms that never got involved in supplying to the insurance and real estate companies should rethink again.
Hello David,
i agree with you. i think the time is plan well and act fast. the things that i have planned are:
* focus on cash flows so that you can get yourself covered before the steam runs out. so i am going to first focus on cost v/s realization areas for me to stay afloat
* look to broaden my base, right now we provide recruitment to Insurance and financial service space. so cautiously we are going to move into other area to divide our risks.
* Areas that i feel would recruit even during tough times are pharma as no matter what people still need medical assistance, FMCG – people cant do without basic necessities, education sector and tellecom these are the area we are trying to make inroads.
I have given you an Indian perspective. i am not sure where your location is.
But yeah last but not the least true test of companies mental strength is when the chips are down.. so stay focused and act fast and smart and we should be able to tide the wave and would make hay when the sun shines again.
I am a recruiter in one of the consulting firms in Bangalore.
We are recriuting for an Insurance Company.The postions are Branch manager and Sales Manager.The problem is that for the Sales manager position they require candidates with 3-5 yrs experience in sales and they should not have an Insurance background.Due to recession the candidates who have applied in naukri ,who are from other sectors are not willing to take up a job in the insurance sector.Which sector do we Target?Even the job seekers from pharma sectors (medical representatives)do not wish to take up a job in the insurance sector.For the Branch Manager position they require candidates who have an experience of handling an unit,7-10 yrs experience,people from banking and financial institutions.If we are to take people from financial institutions how are we to select based on their previous designation.Please comment on this.Can we select the people having one yr extra or 1 yr less experience to the required experience??
Please reply
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