Silver linings
No one's really sure whether an recession is looming, but all the uncertainty represents an opportunity, not a threat, for the most skilled personnel professionals. Joy Persaud analyses an HR recruitment market in a state of flux
Date:
03 April 2008
Source:
Guide to recruitment consultancies
Page:
6
Economy, economy, economy” is the mantra of the moment. This is, after all, a time when the governor of the Bank of England is warning of a decline in living standards and newspapers are running articles headlined “How to survive the downturn” in their non‑business pages.
This overview wouldn’t be a fair reflection of what’s going on if it didn’t address the widespread concern about today’s unsettled market conditions. How the prevailing uncertainty is handled may be key to who emerges strongest when the dust settles.
The situation is not helped by all the contradictory advice that’s being offered. There’s the “diversify and spread risk” school of thought versus “stick to what you know”. And then there’s “recruit more talent” versus “keep the headcount down”, according to Gail Bell, managing director at Chamberlain Beaumont.
“This conflict of strategies feeds through into all professions – HR in particular – because people account for such a big proportion of an organisation’s costs,” she says. “A real challenge is to balance the need for people to be doing the right thing in the right employment relationship against the environmental pressures. This is an area where HR professionals and their trusted suppliers can really make a difference by identifying problems before the rest of thefield and then coming up with innovative, workable solutions.”
Paula Jordan, strategic HR director at McCarthy and Stone, believes that successful organisations that are controlling their costs will have the chance to tap into new sources of talent. Her firm, which builds retirement homes, has seen an increasing number of approaches from professionals who wish to join the business on the strength of its reputation.
“The people who are at the top of their game are very demanding, want the best for themselves and are in a position to demand it,” Jordan says. “It is going to be a tough year for business, but these conditions mean that the best companies and the best individuals will come out on top.”
Alongside companies with solid brands, organisations in the public sector may soon experience greater competition for their vacancies, because candidates see them as stable employers in times of uncertainty, predicts Rebecca Beardwell, associate director at Morgan Law.
“I expect consultancies without specialist knowledge of the public and not-for-profit sectors to take an interest in what’s widely seen as a recession-proof market,” she says. “This could mean a possible reduction in standards of public-sector-specific quality control and understanding. I also expect that proactive search will become an increasingly important element of recruitment campaigns, since talented candidates are more inclined to sit tight during times of financial insecurity.”
For those who do want to move, making a sideways step – or even a backwards one – can be beneficial in the long term. And candidates should also be flexible in how they find the right vacancy, says Paul Duffield, a partner at Frazer Jones.
“I’d love to say that everybody comes through a recruiter because I genuinely think that we can maximise their career options, but we’re realistic enough to know that this isn’t the case,” he says. “Candidates need to look at lots of different avenues – internal networks, external networks, recruiters – and find their role that way.”
Being realistic and staying responsive to what companies need is a common goal for recruitment consultants – strong partnerships allow the HR-consultant relationship to blossom. Chris Archer, head of practice at Macmillan Davies Hodes, likens the role of HR in an uncertain market to being the corporate conscience: “Someone needs to say to the business: ‘OK, guys. Let’s stop and think how we do this,’ because overreacting to get rid of people and to stop learning and development and talent programmes – which will happen if we enter a recession – can be absolutely the wrong way to go. It can be your people who’ll get you a competitive advantage.”
Partnership is a recurring theme when speaking to HR professionals and recruitment consultants. But, with businesses looking more closely at their costs, consultants will have to raise their game to justify the expenditure.
Unsurprisingly, Claire Flynn, HR director at Jet2.com, stresses the need for businesses to control their spending, which means that consultancies must demonstrate that they are providing the best value possible.
“How they offer that to me is by giving a proactive service,” she says. “It can’t just be ‘chuck me a CV’. We really want them to build a partnership so that they understand us as an employer. It’s not only the skills we’re after but also specific behaviour, so they need to spend time talking to candidates and being honest with them about what Jet2 can offer instead of overselling, because that would waste both the candidates’ time and mine.”
Flynn continues: “We have to be quite careful because as HR is hopping on to the strategy bus, everyone else is hopping off. This doesn’t mean that strategy is being abandoned. But, when we’re choosing to work with recruitment suppliers, we have to understand the strategic objectives for doing so if we’re going to find candidates that most fit our cultural requirements.”
Bell at Chamberlain Beaumont agrees that recruitment consultants are in prime position to help HR departments deal with the impact of economic uncertainty. They can do this by providing timely advice on related issues in the marketplace, as well as guiding HR on meeting candidates’ and interim managers’ expectations.
“This is a time when HR professionals will need to advise their organisations on how to gain better value for money from all the people aspects – for instance, recruitment, compensation and development – together with outsourced HR services,” Bell says. “From a client’s perspective there may be a need to parachute in some specialist HR knowledge – such as redundancy expertise – as this has not been required in recent years. From a candidate’s perspective this could mean advising a senior HR professional to consider an interim management solution while there’s growing concern about the impact of economic uncertainty.”
Anthony Pierce, associate director, HR, at Hudson, believes that potential candidates’ increasing nervousness about moving jobs coupled with employers’ recruitment freezes are creating a big challenge.
“Both scenarios are reducing the job flow, although I’ll only be worried if the economic forecasters talk us into recession,” Pierce says. “The market as a whole seems buoyant, but the financial services industry is more nervous than anything. To be honest, recession tends to lead to an improvement in the quality of candidates and clients. Only the best will prosper.”
Sheila Griffiths, co-founder of Consult HR, says that she, too, has encountered clients, especially in the financial services industry, that are hesitant about recruiting at the moment. “We have just delivered a shortlist for one of our clients in financial services and it knows, because of the credit crunch, that it’s going to face a tough year. That’s why it wants a really high-calibre, top-notch HR person to manage all those difficulties,” Griffiths says.
“We are all aware that the economic outlook for 2008 is uncertain,” Bell says. “We will encounter slower growth, as is already being realised by financial services institutions. This is likely to affect jobseekers and lead to pay freezes or certainly smaller increases. But organisations still aren’t fully staffed and there’s still a call for more effective talent. This is a time when seasoned professionals with a record of delivering value are in demand. Employers need fast, flexible and valid solutions from HR in resourcing, employee relations and development – all to be subject to rigorous financial analysis.”
May Lee, principal and founder of KSI People Solutions, says she has seen a shift towards more proactive change management to ensure that employee disengagement is minimised.
“In a volatile economic environment we HR people need to demonstrate flexibility and the ability to adapt to ongoing changes while ensuring that our objectives are contributing to the strategic aims of the business,” Lee says. “There is no room for the ‘soft and fluffy’ stuff, which some employers still perceive as representative of HR’s contribution.”
The image of HR is a crucial factor as far as its relationship with the rest of the business is concerned, according to Strategi’s managing director, Jo Sellwood. She reports that attracting people into the profession is her biggest ongoing problem. Conversely, Jo Wake, head of HR, Midlands, at Robert Walters, thinks that the HR profession is good at self-promotion. “Certainly, the candidates I’ve met are excellent at wanting to be visible in the business,” she says.
Wake reports an increase in job moves across all sectors, including manufacturing and retail. Good numbers are still applying for roles, she says, which flies in the face of those who say that candidates are too nervous to move. “They aren’t just staying put and thinking they’ll ride out the storm with their organisation,” she argues.
Steve Randall, managing director, UK regions, at Robert Walters, agrees. “We aren’t worried about economic uncertainty. Activity levels in recruitment across HR were buoyant in the second half of last year and continue to be so,” he says. “If you look at the Financial Times, advertising volumes are distinctly down. But if you look at People Management, the volumes don’t seem to have dropped at all.”
But alongside these sparks of optimism many other experts are erring on the side of caution. Conflicting views on whether there’s anything to worry about are perhaps enough to inspire wariness. That said, there are key elements of the recruitment business that must continue. Fewer permanent posts mean rich pickings for interim HR professionals, for whom there’s a breadth of opportunities.
Digby Morgan’s managing director, John Maxted, goes as far as to predict an inexorable rise in the number of interim assignments. These are no longer about filling gaps, he explains: they’re increasingly about driving, supporting or delivering change programmes.
Jo Blissett, director at Interim Performers, says: “With uncertain and changing global markets, business never stands still and HR must help to lead and support change. Now, more than ever, HR interims are in high demand. Rather than recruiting on a permanent basis, more and more clients see an interim as a cost-effective and highly experienced specialist who’s focused on achieving results.”
Strategi’s Sellwood has also seen an increase in demand for interim HR professionals. “A lot of candidates are coming out of senior executive roles to become interims. The market for their skills is really buoyant,” she observes.
There may be plenty of interims available, but the old chestnut – a lack of exceptional permanent professionals – is an industry-wide problem, according to many commentators. Griffiths hates the phrase “war for talent”, but concedes that there’s “no doubt that high-calibre HR people at business partner level (£55k to £60k) are rare finds, because everybody seems to be after them”.
She also points out that targets are moving. “It’s almost as though there’s an uncertainty – an ongoing evolution of what an HR role can look like,” Griffiths says. “This can make the time to hire much longer. If the goalposts shift – and it’s entirely the client’s prerogative to shift them – you can end up with the wrong candidates for the role.”
Jordan at McCarthy and Stone wishes that consultancies were more reasonable about fees. “We’ve been saying that it’s a different market now: if you come to us with people you’ve got on your books because they’re suddenly looking for a job, we don’t expect to pay you the same fee as if you’d done a search. I wouldn’t expect you to play us off against other clients, either,” she says. “Giving us industry information is also very important – trends in the market, salary information, any kind of intelligence.”
Heidi Waddington, managing director at Hays Human Resources, acknowledges the advantages of possessing the latest market intelligence. “Our statistics tell us that the HR marketplace is as healthy as ever, which is powerful information,” she says. “By representing candidates honestly, we can ask key questions that may not be easy for a potential employee to ask of an employer directly.”
Maxted at Digby Morgan says that, although he’s not seen any evidence of a slowdown, there’s “nowhere to hide in a recession. My firm will work with HR professionals to optimise the service they offer and to ensure that its value is understood by businesses – especially during periods of uncertainty.”
Bell believes that now may be the time for the HR profession to make a lasting impression. “Business partners and in-house professionals alike feel that those who deliver now will not only survive; they will become the preferred people tomorrow and will grow and prosper.”
The final note of cautious optimism comes from Consult’s Griffiths. “HR is being taken more seriously than ever. If we are in recession (and who knows?), retention and the influence that HR can have on that is a serious business issue,” she says. “We really don’t have a crystal ball and maybe it’s inappropriate or unhelpful to speculate, because we are where we are and what will be will be. As an organisation, we’re equipped to deal with reality, whether that’s flatness, doom and gloom – or even a whoosh.