I’ve become a real doom-monger of late. And of all the “mongers” to be, doom are probably the worst. They’re certainly the least fun at parties. However, writing New Zealand’s third best recruitment blog in 2024 has sealed my fate. My Thursday evenings are spent trying to dig up a story about a pissed Hays recruiter taking a dump in their bosses bin, only for me to spend Friday morning telling you all how awful the world is. This Friday will be no different.
Following last week’s blog, I received numerous calls from agency recruiters and recruitment business owners in the capital. There’s a couple of things I’ve gleaned from these conversations which highlight how bad things have got. Firstly, with nearly two thousand reads, the blog only garnered five comments. Such is the power wielded by MBIE that recruitment firm owners would rather call a random recruitment blogger in Auckland to add their opinion than to raise their head above the parapet and comment on LinkedIn. Sadly, the dearth of government recruitment work in Wellington has meant that firms do not have the luxury to stand up for themselves anymore. Instead, like hungry mice, they fight each other for the scraps.
Secondly, it has become clear that for most, things may get a wee bit worse before they get better. I’m hearing persistent rumours of at least one boutique brand shutting up shop, another pulling out of the Wellington market, and the potential of one major IT Recruitment brand ceasing operations next year. As is the furtiveness of the Wellington rumour mill, these are just rumours, and I’m not even sure which brands are being referred to. However, there’s enough people talking about it. The dire economy, combined with a government hellbent on reducing public spend, has created a perfect storm hitting right about……now!
Data from SEEK paints an equally depressing picture. You all get the same email, so I won’t bore you for too long, but to summarise: Job ads are down 30% year-on-year, Engineering jobs are down 12% month-on-month(!!), and job ads in Wellington are down 42% year-on-year (!! again). If job ads are a semi-accurate barometer of our industry, then many of us are seeing a 30% decline in revenue, with some of us being 40-50% down. What business model in any industry can survive this for any length of time?
Looking across our client base, I see that part of the challenge in running a consistently successful recruitment business is the nature of the craft itself. Recruitment has two cycles, of which it oscillates between every few years. We are either operating in a candidate poor/opportunity rich market, or a opportunity poor/candidate rich market. This is binary, and the switch is flicked in the middle of the night by some hidden hand most probably controlled by the illuminati. And a business best suited for one market is often the business worst suited for the other. Simply put, those who invest in maximising their profit in a booming market are the first to come unstuck when the market flips. Following Covid, some firms invested heavily in candidate managers and “recruiters” who couldn’t actually sell because they didn’t need to. These firms made loads of money. Now there are no jobs, these firms teeter on the edge of bankruptcy. Firms who positioned themselves as the “go to” for all things government were smashing it. And now they’re busking on Willis Street.
Instead, the firms doing the best right now tend to be like an American housewife on Prozac. They perhaps didn’t experience the highs of the post covid boom, but they’re now not experiencing the current lows either. They didn’t waver from their business model. They didn’t go for the quick win. They didn’t launch a whole host of crazy new “practices”. They focussed on quality work, with quality clients, avoiding the distraction of all that glitters. They stuck to their knitting. Running a recruitment business in a booming market is like a holiday romance. It’s easy to imagine that getting shagged by that handsome, well-hung Frenchman over the hotel balcony will last forever. However, fast-forward 18 months, and how’s life with a screaming baby, 8% interest rates, and a house that reeks of garlic sausage? We probably need to be building our businesses for the realities of life, not those blissful boom periods.
Anyway, enough mongering from me today. Next week I’ll blog about something far more upbeat. I promise.
