National responses to a global crisis

The credit crunch is a global phenomenon — nowhere is a country’s economy unaffected. So what is happening globally with recruitment andhow are staffing firms adjusting to the enforced economic order?

Recruitment agencies around the world are being forced to adapt to an ever-changing economic environment, taking advantage of local knowledge, re-training consultants and targeting new business, even where the full effects of the financial storm have not hit yet.

In France agencies are recoiling from a string of branch closures; in China the recruitment market is maturing; in Colombia and in the CzechRepublic, companies are drawn into international hiring freezes; and the Australian workforce is shifting towards temporary and part-time employment.

Even in the countries expecting gross domestic product (GDP) growth in 2008, when figures are released, the far-reaching tentacles of the financial crisis are still constricting recruitment.

Blake Wittman: still optimistic for recruitment in their areas

Blake Wittman: still optimistic for recruitment in their areas

Blake Wittman, country manager for the Czech Republic for multi-sector recruiter SpenglerFox, told Recruiter most businesses based in the country were integrated into Europe, making them susceptible to international recruitment trends. “There is almost nothing wrong with the economy which began in the Czech Republic, compared to Russia, Hungary or the UK, where a lot of the problems are coming from the domestic markets,” he explained.

According to Wittman, a recent survey of his clients found 40% were bound by headcount freezes from head office. He said these offices were often based in cities like Paris and London, making it even harder for his Czech Republic-based clients to get positions, which were available,
signed off.

In Colombia the economy is set to grow in 2008, with the GDP in the third quarter 3.1% higher than the previous year, according to the Departamento Administrativo Nacional de Estadística, the Colombian government’s statistics department. However, recruiters in the region say problems with foreign investments are beginning to have an effect on recruitment in the country. Juan Jimenez, managing director of Colombiabased financial services, agriculture and retail recruiter Listos, told Recruiter that he began to notice the effects of the global financial crisis around six months ago when investments began to get postponed.

Fears about the future often lead to an increase in demand for temporary and contract staff, as clients attempt to insulate themselves from the economic storms they can see on the horizon. In the UK, the Recruitment and Employment Confederation’s Report on Jobs, which tracks recruitment throughout the year, found that recruiters’ temporary billings grew until June 2008, well after permanent vacancies had begun to drop off.

Australian recruiters are in the midst of the shift from permanent to temporary, contract and part-time personnel.

Research by Australian staffing body the Recruitment & Consulting Services Association found that 4% of its members’ fees had shifted from permanent to temp in the last three months.

Debra Loveridge

Debra Loveridge

Debra Loveridge, chief executive (Asia Pacific) of multi-sector recruiter Randstad, told Recruiter that businesses in Australia are preparing themselves for the trends they see in other economies around the world.

“Employers are playing a watch and wait game and, where necessary, making limited adjustments to their workforce. In particular, this has included a noticeable shift from permanent to contract and temporary staff,” she said.

Loveridge added that the company has moved staff between departments to capitalise on the increased demand for temporary staff.

On the other side of the world in France, several large recruiters have announced massive job cuts. Randstad cut 489 jobs and closed 85 branches in the country, due to “difficult market conditions” (www.recruiter.co.uk, 9 January).Multi-sector recruiter Adecco also told the French Work Councils that it plans to cut 600 jobs in the country (www.recruiter.co.uk, 17 October).

However, Michèle Alguacil, director-general of France for hospitality recruiter Profile, told Recruiter the company has not seen the kind of dramatic effects reported in the media. She added that the company is buoyed by the international placements it makes in other Frenchspeaking countries. While economic conditions toughen, Alguacil is taking steps to ensure her fivestrong team of consultants are
concentrating on sales calls. “We have made sure our staff have focused on sales calls and calling times, and making sure they make the right phone calls,” she said.

The tactic of increasing consultants’ focus on KPIs [key performance indicators] is being used elsewhere in Europe. Wittman told Recruiter that the tightening recruitment market meant the company had to be stricter when measuring consultants’ performance. “Six months ago we would give our consultants more leeway in terms of reaching KPI targets,” he explained. “In this market we don’t have the time to wait for them. If they’re not doing well now, the chances that they will be doing better next quarter are slim. Before, when the economy was good, we could hold onto them, whereas at this point we simply can’t afford to do that.”

Robert Parkinson, managing director of China for Antal International, which recruits primarily in the finance, sales, manufacturing and HR sectors, told Recruiter consultants have had to change their approach as the market becomes tougher: “Whereas a year ago you could make placements at the drop of a hat, now you do have to have skill and be quite good.”

Parkinson said that in response the company has had to “trim” some people and re-train staff. “We are looking at performance much more — at weaker performers and how quickly they can be productive for us. We are training people more on things like client management — it has gone from being a transactionbased business to a business where it really does matter how you manage the relationships.”

Antal’s China-based consultants are also increasing the number of placements they make in local businesses, with revenues from these companies increasing from around 5% to 25% over the last two years.

“It’s about Chinese companies developing and understanding the value of a professional services company,” said Parkinson, adding that local
businesses negotiate far less on rates and are much better on payment terms.

Despite the downturn in the international market, the overwhelming feeling from recruiters around the world is one of positivity. In Colombia, Jimenez has sent a mailshot out to clients, the translation reads: “Here we do not talk about recession, we talk about growth, leadership, results, expansion and opportunities to serve.”

Wittman has been able to offer clients outplacement and career counselling services, while looking into the market for the possibility of making
replacements within firms which have headcount freezes.

In China, Antal is targeting the buoyant pharmaceutical and healthcare sectors, as well as manufacturing in the alternative energy arena, which Parkinson thinks is set to “explode” over the next few years to meet worldwide demand. Antal is planning to expand the company’s staff base
later in the year.

In Australia Randstad is already seeing some “bright lights and optimism” about the first quarter. “We’re starting to hear that employers simply have to get on and put people in place for their new year strategies and get back to running their businesses,” said Loveridge.

Recruitment is a cyclical business. The global financial crisis and the resultant reduction in recruitment has hit agencies around the world, causing headcount reductions and strategy rethinks. However, recruiters remain positive and, as with previous downturns, they are evolving and adapting techniques to cope with the fallout, riding out the storm in their own marketplace.

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