Mixed signals

Jan 10 2002 by Brian Amble Print This Article

The difficulties that enveloped the recruitment industry in 2001 are clearly reflected in responses to a survey of the readership of the Interviewer magazine (now called "Inside Recruitment").

Tellingly, more than half (55 per cent) said that recession had affected their business, with 71 per cent of those laying off staff. A further 50 per cent expected further lay offs (27 per cent of the whole sample) during 2002.

It demonstrates what a difference a year makes. Recession did not even register as an issue in the 2000 National Recruitment Industry Survey.

Since then, the global slowdown, foot and mouth and September 11 have hit confidence and recession has become the number one threat even outstripping that eternal bane for recruiters, regulation.

Just ten per cent feared regulation as a greater threat than recession though a further 20 per cent considered both to be an equal threat to their business.

Invited to comment, Nesco Group's Tina Holt said: "Concerns over the unpredictability of the UK market have prevented many clients putting their IT budgets above the parapet. Companies held their breath and reined in expenditure and development activity."

Interestingly, however, close to half (42.5 per cent) asserted that they had been untouched by either regulation or recession and did not see either as a threat. That was reflected in readers' views on long term confidence. Remarkably, 90 per cent said that they were very confident about the industry's future with just one in ten concerned about the future.

Holt, whose Cheshire-based company deals in IT recruitment, said: "Optimism is based on avoiding full recession and the inevitable acceptance of the Euro and ERM. This will force UK users to spend heavily to catch up with their European counterparts."

Despite that, there was a strong note of caution. Less than half (40 per cent) thought that the downturn would be over by the summer and some even expected no bounce back until 2003.

Elan Computing's Peter Anthony said: "We can be 95 per cent certain that we will pull out of the downturn but nobody knows when. Our own research indicates a more positive picture ahead."

The sectors most damaged in 2001 are, not surprisingly, the IT/telecoms sectors and executive search and selection. In all, approximately 72 per cent of the former admitted that they had done badly and two-thirds of the latter also said that it had been a bad 12 months. Elsewhere, things had by and large held up. Nearly half the office support sector (45 per cent) said they had done well. It was a similar story in the industrial and commercial sectors (46 per cent) suggesting that 2001 was not quite the desperate year for some that media headlines might have had you believe. Let's hope 2002 is pay back time

"Inside Recruitment" plans to conduct surveys regularly to examine the state of the market and gauge long-term trends in recruitment. These will be conducted both for the market as a whole and sector-by-sector. The next survey will be in the Spring.

For more details, see www.insiderecruitment.co.uk