These are the headlines from the past two weeks. Based on dozens of meetings with agency owners and recruiters, and hundreds of emails and messages I get – a day. (They don’t apply in every case. Some will not be the case for you, your agency or in your market.)

They just represent the ‘trends and themes’ based on what industry leaders are sharing with me.

Key Topics

1. WFH a significant longer-term productivity risk.
2. Agency performance update. The pressure builds.
3. Job losses
4. Client decision-making lethargy.
5. Soft-landing ahead? No!

1. ‘Work From Home’ Until At Least End of 2020 – Likely Longer

Expect staff to work from home for at least half the week for the rest of the year. Return to offices will be gradual. Expect setbacks and further lockdowns.

Productivity is dropping. Staff are increasingly jaded from WFH. Some have hit the wall.

Longer-term, the jury is out on WFH. I have heard every prediction under the sun. JobAdder put out a comprehensive survey last week, from 700 of their recruiting clients, which suggests that 40% of them will move to at least 1 to 2 days a week WFH after the crisis is over. 16% are planning full-time WFH, while 18% plan to have everyone back in the office full time.

Other interesting work-style findings from the survey include 66% of recruitment companies offering more flexible working arrangements, 28% planning staggered working attendance, 19% changing the office layout, and 21% planning to hire remote employees.

The full survey from JobAdder is available here

Agencies are doing a solid job on mental health monitoring and support. There is a high level of empathy and concern. It’s very different from previous downturns in that regard. However, this is not consistent as you can imagine, as some leaders are understandably out of their depth on how to respond.

Now we need to focus on energising teams. You are the CEO (Chief Energy Officer). It’s critical to set daily goals, vary them and be creative, or productivity will slide dramatically.

Excellent blog here from Chris Savage on ‘energising productivity every day at home.’

Also, my ‘Crisis Toolbox’ has many ideas you can use. (including 11 Webinars done in the past three weeks!)

Keeping teams inspired, productive, and ‘healthy’ is perhaps the biggest challenge for the next 6-9 months. The JobAdder survey confirms this with 39% of companies nominating ‘Maintaining morale‘ as their biggest challenge, and a further 30% listing ‘Mental health‘ as a primary issue

2. Agency performance: some of the best performers now feeling the pressure.

There are a small group of agencies holding the line on revenue. I advise three IT recruitment companies in Australia and NZ. All are on average down only about 10% at the GP line compared to pre-COVID. Contactors working from home seems not to be a problem for their clients, in the main. Even some permanent placements are being made, and onboarding is handled remotely. Companies with robust government workflow are doing well. Some blue-collar and transport /logistics businesses have held up. There are others too, but these are the exceptions.

There’s a slightly larger group doing very poorly (revenues down 70-90%% plus). These are typically smaller businesses, exposed to white-collar roles (accounting, legal support) and they have been decimated. Some are almost in hibernation

The big ‘middle’ group have seen on average revenues down about 25-35%.

Increasing numbers of the ‘we’re ok, not really impacted’ agencies of three to four weeks ago, are now seeing revenue slide.

Some clients are reporting early signs of some new recruitment spend (In Australia). Still way down, but a heartbeat returning. Sporadic and tentative. Interestingly, the JobAdder survey shows that 15% of respondents are actually hiring staff this quarter.

3. Job losses.

Almost every agency I deal with let staff go in the last month. If I had to nominate an ‘average’ figure, I would say 30 % of the team has been lost. At least two of the listed recruitment companies on the ASX reduced staff by 25% plus.

A little surprising for me then was the Jobadder survey which suggested only 35% of agencies have reduced headcount. This feels like a low number, and in some ways is quite encouraging.

I don’t have a good fix on the bigger end of multi-national agency town. I saw a webinar featuring some of their leadership, where there was plenty of bravado about how well they were all doing. It seemed weird and unlikely. I have no data either way.

I have predicted for a while that government subsidies to keep people in jobs will run out before the crisis does. This week the government in Australia signalled Jobkeeper benefits would no longer apply after September. (This may change of course. Everything is fluid!) I can categorically tell you that the announcement of Jobkeeper saved a massive second round of redundancies in Australia in the last few weeks. I know because I am on the Board of 12 recruitment and HR tech companies and am a confidante to numerous others, and this was the fact in at least 60% of cases

So we really need revenues for agencies to increase by September, or many more jobs will go, and many agencies will close. This is an ugly reality, but I voice it so those running businesses can plan accordingly.

4. Client decision-making lethargy.

Agency clients are being painfully slow in making decisions on projects and spend. There are some hires being discussed, and projects proposed, but only intermittent action and sign-off.

Client volatility is a certainty, and they will be ROI obsessed.

Many recruitment owners tell me they believe the growing clarity around easing of lockdowns and a return to some sort of ‘normal’ (Australia/NZ) will see the urgency of decision-making and confidence to spend. I am sceptical. I can’t see how tentative return to work will result in mass hiring! But I would be delighted to be wrong about that.

5. Severe recession, or soft landing?

As mentioned, the easing of lockdowns is giving some agency leaders a lift in optimism that the economic recovery will be V-shaped, and fast. The ‘snap-back’ theory.

I think this unlikely and so do many sharp ‘economy’ types who are much smarter than I am.

Plan for a WWW- shaped recovery. That’s my tip. Things start to pick up, then there is a virus outbreak and there’s another lockdown, in regions or nationally.

Start, gather pace, pause, step back, go again. For two years at least.

Expect a massive downward pressure on prices and costs.

Agencies must plan for the worst and hope for the best.

6.And the good news?

 Recessions end.

Recovery will throw up huge opportunities for agencies to grow fast and take market share.

Individual recruiters can double billings as they come out tougher, smarter, hungrier and closer to clients who have been through the fire with them

Plus it’s a chance to configure your own future.

I don’t mean to be trite but ‘don’t waste a good crisis’. Everything is up for disruption. Specialisations, business models, terms of business, who we hire, commission structures, technology, marketing. Everything. You will never get a better time than now to slaughter sacred cows and make a fresh start.

I am speaking on this very topic very soon. Sign up here. Free, I believe.

Thanks to Chris Savage for many of the ideas in this blog

Access the library of my Crisis advice here 

(Blogs, podcasts, webinars)

*************************************************************************************************************************************

***********************************************************************************************************************************