While my esteemed colleague and boss is over in the UK scoping out the market for some talent, I’m taking the reins on this week’s blog. He loves being in the UK sooo much I don’t know if he will ever come home…..
After three months of spending over nine hours a day talking to no one outside of the recruitment industry, I’ve noticed a few things. I seem to be having conversations circling three main topics: redundancies, the recession, and remuneration. I am fortunate to work closely with three highly experienced recruitment-to-recruitment specialists, who collectively have over 30 years of experience under their belts. Additionally, if you don’t believe me, we capture a whole heap of data here.
Redundancy
Redundancy is crap. I’ve never actually been made redundant myself (touch wood), but from the perspective of having bills to pay and a life to afford, it seems up there with one of the worst things that could happen to you during a recession. It’s crappy for the employee being made redundant, the manager who has to issue the redundancy, and the wider team who worked with the affected employee. I have seen enough to know that most companies are making redundancies for the sole purpose of ensuring the business survives this economic warfare. But I’m also seeing a handful making redundancies for the sake of it. I’ve heard comments such as “clearing out the dead wood” and yeah, I get it, some people suck, you just want them out, but it’s not an excuse to go about it disrespectfully. There is a process and a way to do it well, and I think if you hired them, then you should be paying whatever they are asking for to survive until they can get employment again. Managers should remember that they hired these employees, so technically, their failure is a reflection of management’s failure.
Recession
The past 12-18 months have been the most challenging period in at least a decade. To be fair, I’m relying on most of this information from Google and my peers since I was 17 during the last recession and, trust me, I was doing far more important things than worrying about the economy. But the facts remain. We are in the trenches, people are taking double the time to fill basic admin roles and not seeing a drop of commission coming from putting in the hard yards. Regardless of whether targets are being hit, people are still working really, really hard and most working well over their 40-hour work weeks. I will also add in that gas has gone up again, the National government has graciously given us a $50 cap on bus and train fares (life changing), and shopping for fresh food and vegetables looks a lot like $250+ a week just to feed two people. It’s still hard, it’s still a grind, and although the GDP is not in a negative, it still feels like it. Dark times.
Remuneration
Not only have we been navigating through a recession, but we also just came out of a period in recruitment where agencies were paying big bucks for somewhat mediocre consultants. I witnessed people with less than two years of experience as consultants being offered upwards of $90k base salaries. Now, these individuals want to move and, surprise surprise, are struggling to get an interview. It’s no fun for us having to educate them that this was never an accurate salary in this industry and that to work for a ‘good’ agency they’ll need to drop their expectations. Kudos to the agencies that held tight and didn’t adjust their banding just to fill seats. And to those still paying the big bucks, it’s not a retention method for your shitty culture; good people will leave regardless of how much you pay them.
Currently, I have a collection of different bandings from our clients that fit recruitment consultants’ salaries. All vary, and even some pay $15k – $20k more than others. I’ve placed entry level consultants at $75k and others at $120k, both with similar experience and in similar fields. It comes down to balancing what good consultants are being paid in their current job, what your agency can afford, what the consultant can bill, and whether your reputation and brand can justify negotiating lower salaries. Along with the in-depth number crunching of a good commission schedule to back the base salary. Also, if you have to sell your business on benefits such as WFH, gym vouchers, or a fruit bowl, you are sorely mistaken. Everyone offers benefits, and it’s not the same as a $5k – $10k salary increase.
When I started in recruitment, I didn’t fully understand commission structures, but I trusted the company I joined. They set me up to succeed, predicting I’d bill $200k in my first year, which I exceeded. I wasn’t sure what that looked like, but it was rewarding when my commission came in. Currently, negotiating high base salaries are taking precedence (which is not attainable). Once the economy improves, billings will increase, and money will start flowing again. However, being on a super high salary wont actually benefit consultants or agencies.
So there we have it, a bit of a sh*t sandwich really, a mix of redundancies, a crap economy, and somehow almost everyone getting paid too much. Welcome to recruitment in 2024.
