Hindsight or Arse-sight? Reflecting on The Whiteboard’s 2011 Predictions

Last year, around about this time, The Whiteboard brought to you my predictions for what 2011 had in store for us in the world of recruitment.  Next week I will be wheeling out a similar offering, although cunningly this time I will be issuing forth predictions for Recruitment 2012.  Just to keep you all interested you see.

But casting my mind’s eye back to sitting in this very spot 12 months ago, I couldn’t resist shifting a quick glance at my predictions for 2011, and seeing how prophetic / pathetic [delete as appropriate] my 2011 predictions were.

So like a hopeless gambler, drunk in the TAB, shooting a bleary-eyed look at the endlessly circling four-legged betting vessels, and staggering towards the till, betting slips gripped in shaking fingers, I subject my predictions to you, my critical readers, to decide whether I might be a thought leader or a thought loser.

Here was last year’s offering:  Nine Factors to Shape Recruitment in 2011.

Now then, let’s see:

 

Prediction 1:  Growth

Those of you in external recruitment will have a wonderful opportunity to get back to pre-recession levels of billings in 2011.  Those of you in internal recruitment will get increasing pressure from line managers and stakeholders to deliver on increasing numbers of roles.  Be prepared to work hard to take advantage of this upswing in business because if you don’t, someone else will.

2011 Reality:  External recruiters did indeed have that opportunity, but not all of them took it.  The year brought far tougher trading conditions than many expected and, whilst the demand for labour grew, the lengths you had to go to to make those placements ramped up significantly.  Quality recruiters able to provide a true consultancy service coupled with drive, determination and tenacity were able to increase their billings.  The other 80% were not.  On the internal side, resources were stretched tighter and more was expected for less.  The number of roles to recruit increased but you didn’t see an increase in support or colleagues around you.  HR and Finance departments looked increasingly to improve the quality of their internal recruitment functions rather than the number within it.

 

Prediction 2:  Competition

2011 will see the introduction of more and more recruitment businesses into the market place.  Some will spring up organically within New Zealand and some will enter from overseas.  What the big players need to realise is that these smaller boutiques can pose a bigger threat to their business than perhaps they could in the past.  With the amount of technology so easily available nowadays, small solo operators can move quickly, efficiently and with great flexibility and will work very hard at developing tight client relationships.

2011 Reality:  The booming economy of Australia got stuck in neutral and eventually crunched into a “two-speed economy” with QLD, WA and SA (courtesy of the Olympic Dam project) providing all the torque to drag NSW and VIC along with it.  Recent jitters in their banking and financial services sectors have further quelled aspirations for growth.  As such good old New Zealand was firmly placed in the “too hard” basket and we didn’t see any significant entries from overseas recruitment businesses.  Already existing players such as Candle, Talent International, Talent 2 and Skilled maintained a “steady as she goes” course and pretty much maintained their shape, although Skilled did recently offload the Tradeforce part of their business to AWF.  We did indeed see some organically grown businesses spring up, however, with Alexander James, Sourced and Talent Magnet being front of mind.  Companies such as Manpower, OCG, Robert Walters, Madison, Debbie Graham and Candle provided the experience and expertise for these new businesses to launch.

 

Prediction 3:  Internal Recruitment

2011 will herald a new era for internal recruitment teams but the full effects won’t start to really show through until later years.  More companies will implement an internal recruitment function, and all will do so with the best intentions, but not all of them will get it right first time.

2011 Reality:  Pretty happy with this prediction, although I’m willing to field comments to the contrary.  Internal recruitment functions have become smarter and more savvy in some instances but whilst we have witnessed an increase in the efforts of corporates to develop their internal recruitment functions, many are still subjugated to the interferences of naive HR and Finance departments who don’t understand the value of top talent.  There is clearly an increase of will to get this right, to the extent we now operate a successful desk recruiting purely for the internal recruitment market (ahem, shameless plug), but let me put it this way:  $50k gets you a recruitment administrator who will do nothing to command the respect of your hiring managers and develop a strategic hiring, talent pooling, employment branding and social recruiting function.  $100k probably will.  Oh yes…and you’ll probably save over $50k in the process.

 

Prediction 4:  Flexibility:

No longer the sole occupancy of fiery, energetic, young Grads, more and more recruitment desks are populated by more experienced, commercially-astute and business-minded consultants.

2011 Reality:  The technology did indeed continue to advance and enable more and more recruiters to continue working without being physically chained to their desk.  However, while this suited the return-to-work Mums and return-to-NZ ex-pat Kiwis seeking work/life balance, it also became an expectation of Gen-Y and Gen-Z recruiters too.  With the advance of cloud-based recruitment systems such as PeopleCloud it is becoming an expectation rather than a luxury for recruiters to access their databases from home computers and smartphones, with one client in Brisbane handing out iPads as a matter of course to all new recruits.

 

Prediction 5:  Contracting

Following on from flexible working practices, the concept of contracting will take off in a big way in New Zealand in 2011.  Lagging behind much of the developed world, this has been slower to properly catch on in New Zealand, but many recruitment companies will look to grow their contractor offerings at all levels.

2011 Reality:  Hmmm…you tell me.  Undoubtedly many recruitment businesses have sought to grow their contracting capabilities (many recruitment company owners recognise that a profitable contractor book adds far more to their business’s worth than past Perm billings) but in reality the appetite in New Zealand remains reluctant.  Some firms have pointed to an increase in demand for temporary workers as hiring freezes and frozen headcounts continue post-recession and flexible workers offer a way around it.  However, anecdotal evidence from Wellington is that their contractor market has died and the IT sector as a whole is bringing in more Perm than Contractor staff in an effort to get better value for money.

 

Prediction 6:  Salaries

Whilst there has been pressure during 2010, many recruitment firms have managed to hold true to their principles and newly austere approach.  This is already under severe pressure now, but in 2011 it will break….Expect to see these beefed back up 10%-20% again by the second Quarter of 2011.

2011 Reality:  Lets be honest.  2011 didn’t end up delivering the surge in economic recovery many of us expected hoped to see and there was never any real pressure on recruitment company owners to increase the base salaries of staff.  The figures proffered in last year’s blog hold about true today, so there has been little or no change.  What we did witness, though, was the increased difficulty in prising top recruitment talent out of competing firms.  As demand for the services of the better agencies increased, so did their own demand for quality recruitment staff to meet the demands of their clients.  Base salary increases of 20% or higher were frequently engineered to leverage such moves.  If you are a recruiter that did get a base salary increase in 2011 then feel lucky and proud, because the average New Zealander saw a rise of just 3%.

 

Prediction 7:  Probity Checks

Although impossible to monitor, more and more clients and recruiters will also be conducting “informal” background checking through social media channels such as Facebook, Linked In and Twitter.

2011 Reality:  Currently a hot topic, this did indeed come to pass, and was the feature of a widely-shared infographic revealing that 91% of the surveyed “hiring professionals” used social networks to screen candidates.  It has probably reached the stage where if you don’t check at least one of Linked In, Twitter or Facebook then you are doing your client a disservice in allowing that candidate onto your shortlist.

 

Prediction 8:  Social Media

2010 saw the uptake of Linked In in a big way by recruiters looking to build innovation into their old-fashioned sourcing techniques.  In 2011 the same will happen with Twitter and, to a lesser extent, with Facebook.

2011 Reality:  The recruitment industry’s love affair with Linked In continues unabated while Linked In, like a teasing harlot, seems intent on developing more and more revenue-generating applications that actually serve the corporate internal recruitment market more favourably than us agency recruiters.  However, Linked In now being a publicly listed entity means they don’t care who the money comes from, and just as before it will likely be the agency recruiters who harness the power of Linked In’s premium offerings the most.  Twitter has indeed grown in popularity amongst recruitment businesses but, sadly, many still seem to regard it as an appropriate forum to list their current job vacancies.  Guess what?  It isn’t.  And subscribing to a smart piece of software to automatically regurgitate your database’s job listings onto Twitter is not Social Recruiting.  It is Being a Prick.  Facebook for recruiting?  2011:  meh.  2012?  Come back next week.

 

Prediction 9:  Corporate Social Responsibility

As profits rise and firms look to give a little back, as well as elevating their perceived image in the wider community, 2011 will see an increasing focus on CSR with many SME kiwi recruitment firms developing new approaches.

2011 Reality:  I did detect a slight shifting of intentions towards this overall but circumstances conspired against and eventually little more than lip service was paid towards CSR by the recruitment industry.  Tough trading conditions, share market fluctuations, Eurozone crises and faltering confidence all negatively affected recruitment company profits and downward pressure on fees continued from shorter-sighted corporate employers.  Suffice to say CSR never reached top-of-agenda at recruitment board meetings, but we did enjoy speaking to one recruiter from Kelly Services on the day she was dressed as a fairy helping out at a charity for disadvantaged children!

 

Pretty content with the validity of my 2011 projections overall.  Clearly the impacts of the Christchurch Earthquake and ongoing global economic wobbles took their toll on my rose-tinted optimism, but all things considered we in Recruitment NZ did pretty bloody well.  Hats off to you all.

Please let me know your thoughts on the above and come back next week for The Whiteboard’s predictions for 2012.