How is the recruitment market really?
It is the most frequently asked question in recruitment.
‘How is the market for you?’
It is also the most common justification for poor results.
‘The market is awful right now.’
It is the source of the most outrageous hyperbole.
‘This is the worst the market has been this century.’
I was in the UK recently, speaking at several recruitment events, including the Recruitment Agency Expo and a Masterclass for the team at Robert Walters London. I was asked these questions dozens of times (below the picture)
Fun training the London team at Robert Walters
‘What are your clients saying about the market?’
And
‘When will the market turn?’
Here is a chart that tells you precisely what the market is like.
I got it from Neil Carberry, CEO of REC, and he took the time to explain his views on the data to me.
The abridged version is this.
It is a downturn, for sure. It is not as profound or severe as many others in the past, but it has lasted longer!”
And there it is. This slow period has taken its toll because it is going on.. and on.. and on!
Look at the graph provided by REC and then annotated by me. These figures are for the UK staffing industry, so don’t get stuck on minutia.
I am confident the general trends are the same in Australia, New Zealand, and probably worldwide. My explanation is below the chart.
· The blue line represents permanent placement fees.
· The teal line represents temporary billings.
· The data starts in 1997 and goes through till July of this year
· It is a fascinating journey. The market was strong until the impact of the dot.com bubble burst in 2001. Some of my more ‘senior‘ readers will remember that well. It was tough at the time, although Perm was the hardest hit. That was a genuine downturn, but it was short, no more than a year. By the way, that was yet another downturn where I learned the lesson of the value of a strong Temp and Contract business. Many have found that out recently, too
· Then we had a nice strong run for the next 5 years. Of course, we all got overconfident, hired tons of recruiters, took massive office space with the harbour view, opened offices driven by ego, handed out overly generous bonus schemes, and came down to earth with a gigantic crash when the Global Financial Crisis hit in 2008 and 2009. That was a full-on recession, and it really hurt recruiters, but it was, again, relatively short (For the full story on my hubris and overconfidence at that time and how it hurt my business, read ‘The Savage Truth.’)
· Once we recovered from the GFC, the staffing industry went on a golden run. Ten years or more of ‘Sunshine and Champagne’.
· The COVID-19 pandemic recession of 2020 is fresh in all our minds. It had a predicably severe effect on the staffing industry. You can see how fast and deep that was – but look how short it was. Recruitment billings started to grow again in less than a year, and in some places, much quicker than that.
· The post-Covid boom, which we all loved and enjoyed, is clearly evident in 2021 and the first half of 2022. It was an extreme hiring tsunami where many of us foolishly ascribed the excellent results to our incredible personal brilliance. We worked hard, but the market was at our backs for sure.
· The post-Covid slump started in mid-2022 and got most pronounced in mid-2023. There are signs of improvement and even real optimism in the period after this graph ends, but that is anecdotal, and we will wait for the data.
But the point is that we have been through more than two years of downturn. Longer than the dot.com boom, longer than the GFC and longer than Covid. And that is the crux of why this is so hard for everyone. A tough year we can take. Grit our teeth and soldier on.
But two years and counting? Of company losses? Recruiter struggles? Reduced incomes? Relentless BD? Rejection and plummeting self-esteem?
This is the most significant change in coaching recruiters in decades!
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So, you are not imagining things, my recruiting friends. It has been challenging. Not as severe as recessions past, but long, tight, relentless and draining.
No wonder many leave the industry and others question their careers.
Ironically, the good news is on this graph, too.
Take note that a significant upswing follows every downturn. Often, the good times last years. I can tell you that the industry’s history was precisely the same before the data on this graph.
Boom, bust. Boom, bust.
Hang in there, recruiters. Do good work. Build relationships. Hone your skills. Be visible and valuable. Continue to believe
Because the sun will shine on recruitment again, and when that happens, you will party like it is 1999 – which was a good year, as you can see from the graph 😊
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- Posted by Greg Savage
- On October 28, 2024
- 1 Comment
1 Comment