Regular readers and ex-girlfriends will know that I like things to be slightly weird. Perhaps it was this innate desire to stray from the norm which caused me to turn my back on the lucrative world of taxidermy and become a recruiter. Not just a recruiter, which is hard enough to explain to an elderly relative, but a recruiter who recruits recruiters. I once had an intelligent IT chap describe this as “meta recruitment” which is fantastic, but sadly lost on most of us without access to google dictionary. Like all forms of recruitment, recruiting recruiters has typically seesawed between two extremes; we either operate in a market where jobs are a plenty but candidates are as rare as a face-to-face meeting with an internal recruiter, or…no recruitment firms are hiring and a thousand candidates wait outside by bedroom window like Beatles fans in the hope of thrusting a CV into my hand. Us recruiters hate both these extremes as making money becomes somewhat problematic during these times. Instead, we like the seesaw to sit where it might should Jonathan Rice and myself get on either end; not quite balanced, with slightly more jobs than available candidates. I’m not going to say which of us has our legs swinging freely, but I have just lost 8kgs in 3 weeks…
Most of us would admit that the market has been a bit slow of late. “A bit slow” is the polite British way of saying “utter sh*te”. It would follow that for most recruiters, the seesaw has gone full-tilt to the “loads of candidates, no jobs” end of the spectrum. Feedback from clients is that this is variable, we those in Wellington only slightly better off than their local baristas. Others in the construction space seem to be trucking OK. IT recruiters are making money, but have to snort amyl nitrite instead of cocaine…which I prefer anyway. I think the consensus however is that almost everyone has more candidates than jobs right now. Historically, in this market, it would have been the same for us in the “Rec-to-rec” industry, but this time round, things seem a bit different and a fair bit more complex.
Firstly, although certainly less recruitment firms are hiring recruiters, we have not seen a massive influx in available recruiters or recruiters wanting to leave their current job. And I’m not talking about our ad responses being low. I would argue with anyone that Rice & Co is by far the most proactive rec-to-rec in New Zealand. We have 3 people spending their days proactively hitting up recruiters. In fact, if you are a recruiter who works for a recruitment firm who isn’t a client and haven’t been approached by us, then message me directly and I’ll performance manage the lot of us. And yet, with all this activity, our conversion rate is incredibly low. Almost soul-destroyingly so. Thankfully, us recruiters have a hollow, alcohol-filled void where a soul should be. We then have the current challenge of actually closing those recruiters who we do wrangle from their current employment. Landing these candidates has become arguably harder than ever. Clients are hesitant to offer, and when they do, they struggle to match, let alone beat, the salaries these candidates are currently getting paid. Why have things become so weird? I have a couple of ideas.
Firstly, the post-covid boom market caused lots of recruitment firms to pay their consultants way too much money for fear that they’ll leave if they don’t. At the time, this made absolute sense, as you could sleep walk to $400k. In fact, this strategy has certainly worked. No one on $120k basic wants to leave. The problem is, there are plenty of decent consultants who can’t currently bill in line with their astronomical basic salaries. When these people decide they hate their boss, or we keep going through their bins until they agree to interview with our clients, things fall over. Although a number of firms went crazy on salary, most of our clients never played the game, and instead were steadfast in keeping salaries sensible – knowing that good consultants will always make good bonuses. We then introduce recruiters with high-basics to them, and for fear of mutiny (and a degree of common sense) they refuse to outbid the candidate’s current paymasters. We can find the people with the skills, but not at the price point. Moving people in 2024 who are on 2021 salaries is no easy feat.
There is also another reason that makes this market so weird. Like the Auckland boomer I’m fast becoming, I’m going to blame…interest rates. Interest rates are as good a scapegoat as any, whilst also catering to my natural optimism as they’re starting to come down. Recruiters are either home-owners or trying to be. When interest rates sit at 3%, if you hate your boss enough, you could leave a cultish global recruitment firm who pay high-basics but team bonuses, for a $10k pay cut and still be fine. You know that with a better firm, and the removal of a daft “bonus scheme”, you could be making more money within three months. However, when you’re sitting on an 8% mortgage on your 2-bedroom leaky-home in Waterview, a $10k pay cut seems quite ridiculous. Hence you sit there in stasis. Too much debt. Too much risk. Too much pride to take a pay cut. And I don’t blame you for an instant.
Anyway, I’m sure this can’t be unique to Rec-to-Rec, so let me know if you’re feeling the weirdness in the comments below. And rest assured, the end is nigh. I sniff optimism. More firms are hiring, interest rates are coming down, and it’s a Friday. Have a good one.
^SW
