Until about 6 months ago, I had the best recruitment job in the world !
Seriously. CEO of a global, yet niche recruiter, with 450 staff spread across 30 offices in 15 countries. We dominate our space in most markets, we are highly profitable, and we do cool things all the time (see Aquent.com)
But that was then. For the last six months I have had one of the hardest, least rewarding jobs in recruitment (well that’s a hotly contested title I know, but it seems that way to me)!. Like everyone else in staffing, we have seen revenues decline, clients go bust and demand evaporate. From planning growth, opening offices and celebrating record quarters, I have moved on to restructuring, re-thinking, retrenching and re-strategising. And while that’s been healthy and we have done it well, its been very, very painful too
Its been tough. For all of us. But, I have been down this particular road before. Several times. So let me tell you a true story
It starts in August 1987. With 9 intrepid colleagues, I had just started a new recruiting business, which was to be called Recruitment Solutions. We were ambitious. We opened with 10 people on day one. We had two offices and big dreams.
Eight weeks after we opened our doors, the worlds’ stock markets went into free fall. “Black Monday,” the 19th October 1987, made the recent economic turmoil look like a mere blip. The Dow Jones on Wall Street dropped 23% in eight hours, and the next day the Australia All Ordinaries fell an astonishing 46%. That’s right — half the value of listed companies in Australia vanished in one day.
I was terrified. Mortgaged to the hilt, I had borrowed every single dollar to start the business. I had encouraged 10 colleagues to leave great jobs, follow me, and start Recruitment Solutions. And now, I was sure, the economy would tank and our business would fail, ruining us all.
But it did not. Stock markets recovered. The real economy thrived. Our business boomed, and by 1990, only three years later, Recruitment Solutions had 75 staff, five offices and revenues of $13 million. All good.
But it was NOT all good. By mid 1991, the Australian economy had fallen into deep recession. Let me tell you how it felt being a recruiter at that time. In mid 1990, before the recession hit, our business was handling, on average, at any one time, about 250 active perm job orders. By mid 1991, that number had dropped to 18 active jobs.
Our Sydney temp desk, which had averaged 30 job orders a week, plumbed new depths. In one memorable week we took one order. And it came in at 4 p.m. on the Friday – and it was for a one-day assignment!
Our staff numbers dropped from 75 to about 30. We closed two of our five offices. Every person in the company had to take a 10% salary drop. Admin staff were eradicated altogether, with consultants shouldering the load. We stopped advertising totally because great candidates were literally queuing up in the foyer. Rented pot-plans were wheeled out the door.
Our revenues, which peaked at $13 million in 1990, fell to $9 million in 1991.
Oh it was a full-on horror story, believe me. But it had a happy ending.
When the market recovered, we found that many of our competitors had disappeared! We found our clients valued that we had persisted, and felt bound to us as “fellow — survivors”. We found the consultants who remained had been burnished by the fire of true battle and were tougher, more loyal and far more skilled.
We found candidates valued our counsel during tough times, and allied themselves to us both as job-seekers and as clients as they secured senior roles. We saw that our processes and systems had been refined and improved and waste had been totally eliminated. We found that the economy raced back, and skills shortages emerged quickly, catching everyone by surprise. And we were perfectly positioned to grow faster and with more substance than ever before
Subsequently, Recruitment Solutions boomed. In two years our revenues were up to $18 Million. By 1997 sales were over $40 million, we had 8 offices across Australia, and the business was so profitable we could list our company on the Australian Stock Exchange, at a value of over $60 million dollars
Individual recruiters, who had survived the downturn, were streets ahead of new comers, in terms of skills, resilience and relationships. Many of those people with us during the early 90s went on to be huge billers, and I can name a dozen or more who now own their own businesses.
So yes, right now, its tough. But hold firm. Recessions end!
And then…let the good times roll!
- Posted by Greg Savage
- On June 5, 2009
- 13 Comments