Thinking Outside the Square

By Miriam Bell - Employment Today Magazine - February 2009

The tough economic times ahead might produce more candidates for jobs, but Miriam Bell finds that employers should stick to their existing recruitment standards and methods—while also looking for innovative solutions.

Predictions of economic doom and gloom abound these days. Unemployment is rising and many companies are struggling, if not going under. The result is there are more people out there looking for fewer jobs than there has been in years. So how does this impact on those who might be recruiting?

Jacqui Barrett, the director of recruitment agency Salt, says that, while the market will be tight for the next 12 months, there is still a global skill shortage and that is not going to change—it will just soften a bit in the current climate. “Some businesses have good intentions to hire people, and they will continue to do so. That is particularly the case in areas like infrastructure and health which are not in recession and have not been affected at all by the credit crunch.”

Companies will need to look at the performance of their staff and ask “are we making use of what we have already got” and “do we have the right talent in the right roles”, because they may not have the right staff to take them through the tough times successfully, she says. “We will probably see an increase in demand for contracting and recruitment staff because, while some people are in a position to hire, they know what the current economic climate is like and that the market is uncertain, so they don’t feel in a position to hire permanent staff.”

The typical response is to cut training and development expenditure, but Barrett says this is a mistake because employers need to look after their good people. “Retention is crucial, especially in times like this because, while unhappy employees will stay on at a company through the tough times, they will leave as soon things begin to get better again. Companies need to be mindful of the decisions that they make in these times because they could come back to haunt them.”

While sectors like finance, property, construction and retail have been particularly hard-hit, she points out that there will also be industries and businesses that will continue to do okay. “That is not to say that they won’t feel the effects of all this in some way. There may be an increase in internal recruitment. Or companies may ask existing staff to do more as opposed to recruiting someone new for a role.”

Although the recruitment industry has been affected, Barrett does not see the long-term landscape altering that much because the same demographic factors are still in place and still driving the market.

Increased candidate numbers
Business New Zealand chief executive Phil O’Reilly agrees that the continued existence of the skill shortage means that employers will continue to hire. While this situation may sound like recruiting will get easier for employers, it will not be just because there are more people available to hire from.

“Hiring someone is the single most important decision an employer will make about that employee, and often the great staff that you want will already be in another job, employed by someone else, so the idea that increased unemployment will make it easier for employers is just not true.”

If employers want a skilled worker in a major city it will still be difficult, he says. For that reason, he believes it is not a good time for employers to slacken off with their recruitment practices. “Employers need to think about their recruitment and retention strategies because it will be no easier to find great staff than it was. It will always be hard and employers should not forget that. They should still make sure that they have the right methods in place to find the right person for the job. They can’t let up simply because they have more applicants for jobs. They need to remain rigorous in their recruitment practices.”

O’Reilly says the longer lists of candidates mean there will be more work involved, yet the same rules will still apply. He thinks it would be sensible for employers to think about using a recruitment agency, because they can add value to a process which may otherwise be overwhelming.

“It is also important to remember that what candidates are looking for might be different these days. With office staff, for example, there will be a change from interest in salary and remuneration to a preference for security and a future, and that should affect the way employers address their recruiting and the way they advertise. They will need to make use of concepts like their employer brand and name, good customers, and security to tempt the employees they want.”

According to New Zealand Council of Trade Unions president Helen Kelly, fewer people are working but people are staying put in their current jobs, which she believes is beneficial for employers. “If an employer is smart they should encourage their employees to stay because it is good for business. You can’t beat loyalty, especially in tough times.”

She recommends that employers should engage with their employees (and their unions) as much as possible, and that includes recruitment. “Workers can provide solutions—from changes to the way of doing things to innovative ideas for job ads and the like. Employers should engage with their employees, consult with them, and keep them in the loop with what’s going on in the business.” Kelly would also like to see more promotion of the government services that are available to employers to help them carry out tasks like recruitment. “The Partnership Resource Centre, the Skills Strategy and some of the services WINZ has to offer are all very useful for employers, especially smaller employers. Employers should not take everything upon themselves because with assistance they may be able to carry out certain tasks more effectively. After all, everyone wants businesses to succeed, not just businesses themselves!”

She recommends those applying for jobs should access the support mechanisms available through WINZ, which can provide help with things like CV preparation and retraining opportunities. They should also talk to the union in their area because the union may know of work that they would not otherwise find out about.

Opportunities and trends
Although everybody is nervous about the current economic climate, it also presents both employers and candidates with opportunities, says Frog Recruitment director Jane Kennelly. “Times like this can work to streamline a market and can get rid of those agencies which are not as qualified, and that can be good. There are 400 recruitment companies in Auckland, but we are already beginning to see a drop-off in numbers.”

Companies have often invested a lot in the employment brand and the candidate experience, so all the work they have put in on such things should not be undone, she says. “Yet we have already started to see a ‘disconnect’ with some employers because of the situation, and that is not good. They should try to avoid that, and they should be mindful that the pressure can overcome people and actually wear companies down in terms of the mechanics of recruiting.”

Kennelly predicts that the recruitment industry is likely to see  several trends occur. The first is an increase in the purchase of ‘unbundled services’, where companies select particular services from a menu of services, so they might employ an agency to do one aspect of the recruitment process, like the administration. “This is a cost-effective way of outsourcing recruitment. If the budget won’t stretch to the whole process, then they can do something themselves.

It’s a habit of old which is popping up again.” The second trend she predicts is even greater use of technical recruitment tools and systems by recruitment agencies, and an associated change in pricing models. “We have the tools to assist us to work through the process and which give the candidate some dignity and responsibility. Some companies won’t have those tools, and the risk is that some employers will think they can get by with out them, or a recruitment company.”

The third trend will be an increased interest in hiring older workers, which she thinks will become evident over the next 18 months. “Research from the US suggests this is happening, and I asked the EEO Trust about it and they concurred. Our discussions with employers suggest that mature workers are subconsciously becoming appealing— because they know what to do, are used to the work structures, are easier to bring on board and are value for money.”

Kennelly has also observed changes in candidates. They are dealing with a much more sophisticated and savvy type of candidate these days, one who is aware of what they want and what they can offer, she says. “This has resulted in a dramatic increase in phone calls, as well as more sophisticated cover letters, instead of the recent reliance on the internet and email. Candidates don’t want to be fobbed off by a recruiter and it’s more personal if they use phone calls, for example, and that applies even in lower-level markets.”

This does not make things any easier for recruiters, she says. “We need to step up to the mark, and make sure that we remain on top of what we are doing. Our challenge is to show that we can add value to the recruitment process, because employers may think they can do it themselves. Another challenge is to keep innovating and being entrepreneurial, because the downside of it all is that you could lose your market share very quickly in this type of market.”

Reassessment of roles
HRINZ chief executive Beverley Main began to notice a drop off in jobs and recruiting as far back as April last year. People are avoiding recruiting and few new roles are being created, yet there will always be a skill shortage, she says.

“In terms of mainstream roles, I think filling vacancies is likely to be put on hold or the work will be spread around the existing staff more. Going by our own jobs board, we would usually have a lot more jobs on it at this time of year. In November 2007 the number sat at around 55-60, but last November it hovered at about 20. That’s the biggest drop-off we have seen, and that is just in HR jobs. However, it is starting to pick up a bit now.”

Like Barrett, she has noticed an increase in temporary and/or contract jobs, which she views as a classic sign of economic uncertainty, but she thinks employers do need to be clear about whether a job does need to be permanently replaced. “If sales are dropping off, reassessment of certain roles is called for. I don’t mean a restructuring as such, but it may be useful to make some changes and re-scope some roles. It really depends on the skill sets employers need to weather these times. It might be better to take on a parttime employee, or to spread the job around existing staff without over-burdening them.”

Main says that recruitment agency fees seem to be coming right down, and that employers should shop around for a deal. “They shouldn’t necessarily just do what they have done in the past. Instead they need to be aware of what their business needs are, both now and in the future. This climate is tough, but it is actually a bit of a glitch in things, and there will always be a shortage of good people.”