Welcome to the Ardent Recruitment Review (ARR). Having recently witnessed first-hand unprecedented times in the recruitment market we thought it would be very useful to provide some insight into, and regular commentary on, our sector and to expand this into a quarterly review and survey of finance and accountancy recruitment.
Ardent has operated in the North and Midlands for over 17 years in our various incarnations (Hitchenor Maher, HMI, ECHM) thus providing a knowledge base and expertise that makes us particularly well placed to comment.
Please take a few seconds to answer the three very brief confidential survey questions at the end of this article as it will help provide the market information that is so useful to you, our candidates and clients, and establish the basis of our next ARR.
The Overall Picture
I first entered recruitment in the early 1990’s in the middle of a downturn and I also experienced the fall in demand post the millennium hype and after 9/11 but none of those events compare to recession we have faced over the last year and the associated devastating effects on the recruitment sector. 2008 started brightly and even by the summer the shockwaves created by the banking crisis had not materially altered demand or supply but in late summer/ early autumn the recession hit with a force not felt before. Recruitment activity dropped dramatically as businesses struggled to understand the sudden changes in the dynamics of their markets and wholesale cost reduction/ restructuring inevitably led to redundancies. Recruitment businesses saw their pipelines dry up overnight.
The turn of the year was a time fraught with uncertainty; lack of confidence, a steady stream of high profile business failures and conflicting “expert” views on the best way to improve the situation led to a lack of momentum in business and in hiring…in Q1 we believe the market dropped as low as 50% of the previous year’s activity. Both permanent and interim sectors suffered as businesses froze headcounts and cut back on projects.
However, low interest rates, some stabilisation in the financial markets combined with huge amounts of money pumped into the economy by HM Government seem to be having some effect and the decline in markets has slowed (note…”slowed” not stopped). In Q2 I have read encouraging reports from the Chamber of Commerce, CBI and CIMA that suggest business confidence is not as shattered as it once was. This is corroborated by a small increase in vacancies over the period.
As for the rest of 2009 I think it best to be cautious in terms of forecasts, we are more optimistic now than for the last 9 months but that optimism is fragile and I think we all fear the “w shaped” recovery as low interest rates, government borrowing and the inflationary pressures of printing money unravel…a future of tax rises, inflationary pressures and spending cuts could stifle any recovery.
What I do know is that we recruitment professionals are by our very nature positive and upbeat and we are looking forward to a return to real growth soon. The signs are gently encouraging that demand decline is almost at an end; with the oversupply of candidates in the market our clients will need our expertise more than ever as they seek to source and recruit quality professionals to help them make the most of the upturn when it comes.
David Colgrave MD Ardent Search and Selection david.colgrave@ardentselection.com
Manchester and the North West
Since the beginning of 2009 in the recruitment market in the North West has been exceptionally challenging, particularly for candidates. The volume of open assignments has steadily decreased since the middle of 2008 to approximately 50% of previous volumes by the beginning of Q2 09. This reduction in demand, coupled with an increase in available candidates, has resulted in an exceptionally competitive environment. We have seen an increase in clients asking for specific sector experience at all levels. Unfortunately the best candidate does not always have the most relevant sector experience and is often excluded from a recruitment process solely on this basis. We are regularly warning our clients that such a stance can harm them long term.
Over the past quarter the market has generally stabilised, there is still a definite trend for companies to review every vacancy in detail in order to see if they can recruit internally, or at a lower level and therefore reduce costs. This has resulted in the £30,000 to £45,000 newly and recently qualified market being the most active and very candidate driven. Volumes are low above this with the £45,000 to £65,000 salary band particularly weak, although in recent weeks we have seen an up turn in Director level appointments.
For the remainder of 2009 I expect the market to continue to stabilise with a slight increase in Q4 as businesses gain confidence and decide to plug some of the empty gaps within their finance functions.
John Begley Director Ardent Search and Selection john.begley@ardentselection.com
Yorkshire and the North East
In 2009 the underlying feeling in Yorkshire has been one of uncertainty. In Q1 we were still seeing the fall out and lack of confidence caused by the banking crisis with organisations trying to assess where their operating models and expense bases should be pitched. This led to a significant fall in permanent recruitment volumes but interim opportunities were also down due to many key projects being put on hold. The reduction in opportunities was compounded by candidates taking a cautious approach to moving jobs with a tendency to ‘keep their heads down’ or hang on for redundancy pay outs.
Q2 whilst still testing has seen a significant increase in volumes especially in the interim market as organisations seek resource to drive through change programmes or indeed to defer longer term permanent recruitment. There is however a steady uplift in permanent activity across a range of sectors although food manufacturing and food retail stand out as particular areas of growth. With exceptionally low interest rates there are concerns amongst our clients that there is a false perception of wealth in the market and it remains to be seen how the economy will fare should inflationary pressures return.
The outlook for Q3 is encouraging but by no means are we out of the woods yet.
Rory Burke Director Ardent Search and Selection rburke@ardentsearch.co.uk
Birmingham and the Midlands
Whatever happens for the remainder of the year, 2009 will be remembered as “challenging”. The first half of the year saw the almost total collapse in automotive production in the Midlands. The impact this had on 2nd tier automotive suppliers based here in the midlands was well covered in the media. I think it is fair to say confidence was at an all time low and that this had a huge impact on the recruitment market here in the midlands. In addition PLC’s “shut up shop” across the board and projects were shelved ensuring that overall recruitment slowed in the region and we entered unchartered economic times.
Over this time the pool of available candidates has increased dramatically and this is having a negative effect on local salaries. There are some positives in that candidates are becoming more flexible on what opportunities they will consider and this fluidity means clients are getting access to candidates they previously would not have seen.
As for the future we only need to look at the online Job boards to see the number of roles in the region has started to increase and the numbers of redundancies has started to ease. The interim market has yet to feel the positive effects of the recession but a lot of our clients are working on “Skeleton” finance functions and readily admit when work load increases they will need to hire and hire fast. Manufacturing and Automotive suppliers will continue to struggle but other sectors might see some light at the end of the tunnel.
Jamie Rodden Director Ardent Birmingham Jamie.rodden@ardentselection.com
