Is Recruitment the Real Barometer for Economic Recovery?

This week I made a placement into a recruitment firm that came with a $5k signing-on fee for the candidate.  I felt a little bit like how Fernando Torres’ agent must have felt when he negotiated a £50 million signing-on fee from Chelsea (ok ok…I said “a little bit”)

But this is indicative of the way the recruitment market is heading now in New Zealand, and even more so in Australia from what I have heard.  We have come flying out of the traps into 2011 and it is busy, very busy.  The demand for recruitment talent is high because recruitment firms are getting so busy they are starting to struggle to deliver, in some areas.

Check out some recent Tweets, in the past 2 weeks, from recruiters that I stalk “follow”:

“Farrow Jamieson just finished the best January Revenue in a decade.  The New Zealand Recovery is underway!”  @nzheadhunter

 

“What a week.  7 placements in the Melbourne office.  Bring it on!”  @hamiltonrec2rec

 

“RFP’s, proposals, presentations, new business, all on a Saturday & with no hangover 2011 is going to be busy and is shaping up nicely!”  @JamesNutt11

 

“Congrats to Gordon and Philippa for accepting your dream jobs in the NFP sector!!!  February is gearing up to be a good one!!!!”  @Talent_Capital

 

“And sales and business development roles aplenty!  2011 recruitment market in NZ is looking promising.”  @bobwalkerNZ

OK so this all sounds fabulous right?  Add to that the supposed “shot in the arm” that the Rugby World Cup is going to deliver to our New Zealand economy.  $500m according to a presentation by the New Zealand 2011 Business Club at an HRINZ function on Tuesday night.

But how does all this positivity stack up against the seemingly negative statistics constantly coming out of Government?  According to this article from Bernard Hickey, English and Key have admitted New Zealand may have statistically hit a double-dip recession already and despite it being an election year are talking up fiscal responsibility and reducing debt.  Furthermore it seems consumer confidence dropped again in February. 

And what of the RWC2011 economic benefits?  Are we really pinning our hopes of a sustained recovery on this one event?  I recently read a brilliant book called “Why England Lose” by Simon Kuper & Stefan Szymanski (2010).  Here is a pertinent excerpt:

“The raising and dashing of hopes of an ‘economic bonanza’ has since become as integral a part of a modern football tournament as the raising and dashing of hopes that England will win it…Euro 96 generated about £100 million in direct income for Britain.  This was peanut dust beside the £12.7 billion spent by all overseas visitors to the country in 1996.  Meanwhile, a study by Liverpool University and the city council found that the 30,000 visitors to Liverpool during Euro 96 spent only £1.03 million between them.  How many jobs did that create?  Thirty, all of them temporary.”

 

Simple message – don’t pin your hopes of increased recruitment activity and economic stimulus on the Rugby World Cup – just enjoy it for what it is, showcase New Zealand to the world, and for God’s sake don’t plunge the country back into a fatal depression if the All Blacks fail to win it!

Another alarm bell was rung last week with the liquidation of a long-established Accounting & Finance recruitment business in Auckland.

However, I am a recruiter like those Tweeters above.  I am busy, I am confident, I am positive.  I just struggle to see how the vibe in recruitment relates to the words coming from economists and politicians mouths.

Maybe we should ignore Government statistics which are old news by the time we read them.  Maybe the recruitment industry is the true barometer of what is happening out there in the employment markets and economy as a whole.  What do you reckon?

The Future of Recruiting? Predictions from 2004 vs. Realities of 2011

Last night I had an interesting chat with Dave Thomas who is the Chairman of CXC Global Board of Directors, ahead of his visit to New Zealand next week to make some presentations to our recruitment community and leaders. 

Dave is an affable, straight-talking South African / Australian who founded CXC back in the early 90’s by accident.  He started out as an accountant, which he despised, so he thought he would give IT a go, which he rather enjoyed.  Moving to Australia he stumbled across a company managing a payroll system that was not legally compliant with Australian tax laws, much to the shock of the company’s global CEO.

Dave spent 28 years as an IT contractor, travelling the world, before ending up in Australia.  So he reckoned that this, coupled with his accounting background, meant he knew a thing or two about contracting, payroll and different tax laws.  Turns out he was right as the company he started to provide a solution to that original employer now operates in over 30 countries worldwide.  CXC Global looks after self-employed contractors, sorting out their GST, taxes, salary packaging, payroll and all that boring administration stuff that gets in the way of actually doing your job.  This has actually provided a path for small to mid-sized recruitment companies to build their contractor books up too, which is something that has traditionally been hampered by lack of cash-flow and accounting or tax law knowledge.

Anyway, this isn’t a sales pitch for CXC, I’ll leave that bit up to Dave at the end of his presentations.  I’m mentioning it because the actual presentation really caught my eye and is probably well worth the attendance of all you recruitment owners, Directors, and general recruitment futurologists out there.  Here is the outline of Dave’s talks:

“As Dr John Sullivan saw it …5 years on”

In 2004 Dr John Sullivan, a world renown thought leader on strategic talent management and human resource practice, produced a paper “The Future of Recruitment” in which he made interesting predictions on the direction of the recruitment industry. Many of these have come to pass.  

At the time CXC Global ran a series of talks based on Dr Sullivan’s paper, and offered our technology solutions to the recruitment industry at large in preparation of these imminent changes.

Five years on, the face of recruitment has changed and the pace of change is accelerating.  Many agencies have adapted their business model, but is this enough? Is it sufficient to take you to where you want to be in 2020?

 

Putting on my cynical hat for a moment, I thought that 2011 would actually be 7 years on from that 2004 white paper.  And keeping up with the cynical theme, I decided to take a closer look at this white paper to see just how prescient this Sullivan fella really was.  Sure he has some good credentials.  A large body of work on HR Strategy, Recruitment functions, and an unhealthy obsession with Metrics to measure the ROI of everything, which I suppose is just a by-product of his being American.  Looking through ERE.net to get the links to this big article it is clear he is a prodigious writer, commentator and provocateur on all things recruitment, talent and HR.  He is, according to Fast Company magazine, the “Michael Jordan of Hiring”…oh and also a Professor of Management at San Francisco State University.

If you have the time or compunction to read through the entire article I have put the separate links here for your reading pleasure:

The Future of Recruiting Part 1

Part 2: Internal Departmental Changes

Part 3: Internet Recruiting Approaches Will Change

Part 4: Websites Shift to the CRM Model

Part 5: Metrics Dominate Decision-Making in Recruiting (see – told you so)

Part 6: Recruiters Will Change

I have to say it makes an interesting read, although obviously far more aligned to the US business style and recruitment approaches than ours here in Australasia.  But he made some big calls back then.  Try these out for size:

“Junior Recruiters.  Since managers using self-service tools will do the most recruiting, the few recruiters that remain on staff will be experienced recruiting consultants who will focus only on key hires”

Has this come to pass?  Demand for my services certainly hinges around finding more experienced recruiters and I get a sense that the days of filling recruitment agencies with young, energetic, have-a-go Graduates has shifted to a slightly more mature culture.  But is this really sustainable as the talent shortages start to really bite later on this year?

“Brand Manager.  As recruiting strategies shift away from short-term “paperwork” solutions (such as running ads or going to job fairs) and towards the ultimate long-term answer – a strong employment brand – the employment brand manager will become the most important position in recruiting.”

 

Bingo.  Although many New Zealand companies are still slowly getting to grips with this concept of Employment Branding, great strides have already been taken by the likes of Trade Me, Deloitte, The Warehouse, Air New Zealand and Counties Manukau District Health Board.

“Changes in Candidates Will Dramatically Impact Recruiting:  Resume Spamming.  Candidates can use software to continuously submit their resume to every possible job”

 

This really made me chuckle.  What foresight and this is a definite blight on the life of recruiters nowadays.  What the good Dr got wrong though, was how the candidates that spammed their resumes everywhere would not gain an advantage by doing this, but would in fact cast themselves in a poorer light in the eyes of recruiters.

“Social network referral systems.  As the popularity of social network systems grows, more recruiters and managers will utilize them as referral sources.  These systems will automatically rate the referrals base on the past referral success rate of the person making the referral.”

 

Hmmm.  An amazing prediction given how LinkedIn was in its infancy back then and Twitter was still 2 years away from even coming into existence.  But I am not convinced we have quite worked out how to use these social network systems as a truly effective referral method yet.  It’s still a work in progress but even in the past few weeks I have started to elicit more business and referrals through this method than ever before – so it’s clearly a hot topic right now.

Anyway, I’ve no doubt this will be an informing, thought-provoking and enjoyable presentation from Dave Thomas and I reckon you recruiters of New Zealand should check it out next week.  Here are the details for Wellington and Auckland:

Wellington – Lunch Presentation

Monday 7th February

12.30pm

Level 16 Vodafone on the Quay

157 Lambton Quay

Auckland – Breakfast Presentation

Tuesday 8th February

7.30am

Mecure Hotel

8 Customs Street

RSVP to kirsty.erasmus@cxcglobal.co.nz