KEY POINTS:
Call it what you like, whether we are in a recession or not, people are losing their jobs and many firms have put a freeze on replacing people that leave.
From chocolate makers in Dunedin to Auckland newsrooms, people are facing redundancy - and it's all happened too quickly. A few months ago employees felt bulletproof. Now they are ducking for cover.
The tables have turned, and while it isn't good news for employees, those in the recruitment industry are also feeling the pinch. No jobs equals no income.
Sarah Lee, owner of recruitment firm Maniads, says the industry has taken a hit with the changes in the market.
"We have seen a significant shift in the types of jobs employers are putting out to agencies and typically they send us the harder to fill roles and ones they have struggled to fill themselves," she says. "You could liken it to employers throwing out the scraps and then all the agencies fighting over them.
"We have also noticed that between agencies it's getting pretty aggressive and a few dirty tactics have started to rear their ugly heads when it comes to harassing employers and their HR departments."
Lee says one recruitment firm even started spreading rumours that a major rival had gone out of business.
"The firm was calling HR departments saying so and so has gone under, and hoping to pick up the work - but they were not telling the truth," says Lee. "It seems that some people will stop at nothing to get their candidates' CVs on the hiring manager's desk."
Lee says employees have had a good run of being able to pick, choose and swap jobs on a whim. But she says long term the current climate is a good thing for employers, as they will find that staff will stay longer and they should get a better return on their HR dollar.
The change from a bubbling, vibrant recruitment landscape to a more conservative affair has forced Lee, among others, to meet the market. She now offers what she calls a "no fee" recruitment service.
In truth, it isn't a free service, more of a fixed-fee scheme whereby employers pay Maniads upwards of $800 a month to perform specific recruitment tasks such as writing the job advert, placing ads, monitoring responses and drawing up a shortlist of candidates which is passed to the employer.
In short, it is a vacancy marketing and CV clearing option. Employers do the interviewing - not recruitment agency staff.
Lee says she got the idea of introducing the scheme after carrying out a survey of firms her company works with.
"The survey proved that it makes financial sense to have the clients' in-house personnel carry out the recruitment process, rather than outsource it at a high cost," she says. "Companies large and small have effective and well-used hiring processes. And the average employer sees little or no value in what the agency has written about the candidate. If they do read the recruiter's notes it's only because they like to feel they are getting some form of value from the recruitment agency.
"Something has to change if agencies are to provide any form of value to the HR and recruitment process. The recruitment model as we know it is out-of-date in the current economic climate."
Lee also says candidates believe that recruiters contribute nothing to their application and that in many cases job hunters feel recruiters don't understand the relevance of their skills because they're not trained in their area of specialisation.
"We anticipate that this new service will continue to grow given that many employers are able to do much of the hiring process themselves in tough times and it's the upfront advertising through to presenting qualified candidates that actually makes their lives easier," she says. "This scheme saves employers money and gives them more cash to play with when negotiating a salary package."
The business model Lee has adopted is akin to what some in the real estate industry have tried - swapping a percentage of the sale for an upfront fixed fee.
Rather than be seen as salespeople making a dollar on a percentage of the salary (when someone is placed), Lee sees a future whereby recruiters charge for their professional services, much like a financial adviser, lawyer or accountant.
It is something Ray Roe, CEO of recruitment firm Adecco, touched on at a recent Recruitment and Consulting Service Association (RCSA) meeting in Melbourne.
He says recruiters that liken themselves to salespeople will fail to charge like professionals and will underestimate what they are worth.
"To ask for what you are worth you need self-belief and must feel good about the work and service that you offer as a professional," he says.
However, change won't come overnight and some recruiters are feeling the pinch now.
"The finance industry is certainly having a tough time and we have never had so many real estate agents on our books," says Lee. "Sales roles have dropped immensely and companies are increasing the current areas or territories that the remaining staff cover."
She says employers are not so much freezing their hiring but are more nervous about hiring. Whichever way you cut it - it is less work for recruitment firms.
"Employers can't predict what is going to happen long term and are taking their time when making the larger salary hiring decisions," she says. "But we are doing well out of the agricultural sector at the moment as you would expect."
The downturn means recruitment firms will have to work harder, according to Julie Mills, chief executive of the RCSA.
"There is no doubt that recruitment remains a financially rewarding industry for professionals at all levels. However, with an economic slowdown on the horizon, consultants will need to focus more than ever on the quality of their service delivery in order to remain competitive and earn incentive payments," she says.
According to Jacqui Barrat, a director at recruitment firm Jobs With Salt and president of the RCSA, recruitment firms should target the export sector - an area she says is growing due to changes in the exchange rate.
"Many [exporters] are gearing up to ensure they have the right talent," she says. "Engineers are still in hot demand. The legal sector is struggling for good talent and there are still companies across a range of industries that are ensuring they have the talent to reach their objectives."
She says company budgets and objectives haven't been reduced just because the market has softened.
"As always, in any downturn, those recruiters that are adding value to their clients and showing them how to grow their business will survive," says Barrat. "The expectation to achieve - especially if you have foreign ownership - continues."
But as the belt tightens, so recruitment firms are going on the offensive.
"We have been told that companies receive up to two phone calls a day from recruitment agencies attempting to solicit their business," says Lee.
In a way the recruitment industry is like real estate. Recruitment agencies need good stock (candidates) and buyers (employers) that can afford them. There's always going to be casualties when one or other dries up.
* Contact Steve Hart at www.stevehart.co.nz
