Cash is still king

Te global economic slowdown may be shepherding in an air of caution over the industry, but quality recruitment consultants remain in demand — and continue to command good salaries.

Recruitment-to-recruitment specialists report that while the market as a whole may be in decline, experienced professionals changing jobs are still able to command attractive remuneration packages.

The air of caution overhanging the industry is evident in the latest figures from the Confederation of British Industry. These reveal that although professional services firms saw business volumes increase across the board in the first quarter, the rise was below the long-term average, and with lower margins to boot.

This experience is borne out by individual specialist recruitment firms, many of which reported solid results for the first half of the year but have highlighted a marked deterioration in recent weeks.

"Last year our business was up 50% on the previous year, and up until six weeks ago it was up 50% again this year," says Tim Millward, founder of industrial recruiter, Extrastaff. "But things have slowed over the last six weeks and those figures are coming down. It is getting tougher."

In turn, this sentiment is echoed by rec-to-rec specialists, with the pervading nervousness about the economic outlook filtering into their clients' hiring policies.

Cheryl Wing, a director at GSR2R, says that although firms are still taking on recruitment consultants, their requirements have become much more stringent.

"Companies are still hiring more senior people but they are being much more selective and candidates have to fit the box perfectly," she says. "Salaries are not going down because of the focus on taking on the right people, but whereas normally consultants with two or three years' experience would be hot property, now clients want people with four or five years' experience that have been through tough times before."

So while the business is still out there, rec-to-rec firms are having to work that much harder to satisfy clients and maintain business volumes.

The flight to quality, in terms of hiring, is a positive when it comes to underpinning salary levels, says Ruella Crouch, managing director at Ruella James, but even the desirable candidates are not having it all their own way and are enjoying significantly less latitude in the market than in the first half of the year.

"Salaries are holding up well, but I do not think that clients are cross-training people as readily as before. At consultant level, in particular, they want candidates with experience in the market they are recruiting for, but only two to three months ago they would have been happy to cross-train," she says.

This trend is also evident in the booming overseas recruitment market, where the commitment shown by candidates willing to move abroad needs to be supplemented by a strong track record of delivery, according to Juliette Hughes, UK manager at Hughes Recruitment.

She says the fact that some countries, such as Dubai, have no anti-discrimination employment laws means that clients are in an even better position to be very specific about their requirements.

"It is very difficult for recruitment consultants going to Dubai to change sectors. Clients there are looking for people with relatively high billings, particularly at consultant level, and want to ensure candidates' stickability is not a question."

Experienced recruitment consultants may still be in demand both domestically and overseas, albeit with less flexibility to switch sectors, but the outlook for new entrants is far less rosy.

The focus on attracting staff with demonstrably high and consistent billings is restricting opportunities for junior staff, as employers want recruits to be able to hit the ground running.

James Pritchard, managing director of JPA, says: "The larger companies are still taking on trainees but smaller firms are not because of the cost implications — because they need staff to get up to speed quickly."

Crouch agrees, noting that only the largest blue chip recruiters with established graduate training schemes are actively looking to attract new blood on any scale.

"A lot is happening at the senior end where forward-thinking companies are leveraging up for the future, but trainees really do have to be exceptional to get on in the current climate," she says.

However, the fact that good quality people are willing to move jobs is a positive indicator, she adds. Ruella James is dealing with several candidates billing £200,000-£300,000 that seem unfazed in spite of falling confidence among business leaders.

Certainly, some sectors are holding up better than others, say rec-to-rec experts.

Pritchard points to niche areas such as investment banking recruitment as one obvious weak spot, with many of the larger City institutions making redundancies across their back office operations in the fall-out from the credit crunch.

Retail has also been fingered as a difficult area due to the malaise on the high street, which has left several leading lights such as Marks & Spencer and DSG International with billions wiped off their stock prices following profit warnings.

That said, a number of other specialist areas are holding up well — and some are positively booming.

Lucinda Brown, head of legal at GRS, says the legal market tends to be far less cyclical than other areas of the market.

"Clients are more cautious and very focused on candidate's skill-sets, but we have recently taken on a couple of juniors as associate consultants who are either legally qualified or have worked as paralegals," she says.

Over at GRS's specialist risk team, division head Dan Richards says risk managers are in strong demand, and if anything even more so in light of the credit crunch.

"It is more the volume areas and back office where we have seen head-count cutbacks, but demand remains strong in specialist areas, such as risk management," he adds.

Back in the mainstream, Wing highlights the public sector as a stable market due to the fact that many government projects are funded up-front.

The disparity between the performance of different specialist sectors, particularly in markets prone to cyclicality, shows the pros and cons of specialisation. But regardless of the downturn, high quality candidates able to generate killer billings will always be in strong demand.



Salaries across the sector holding up well

The UK economy may be sliding into recession, but salaries across the recruitment sector are holding up well.

Recruitment-to-recruitment specialists say the ongoing robust demand for experienced consultants is enabling individuals with a track record of high billings to secure inflation-busting salary packages.

James Pritchard, managing director JPA, says: "Salaries are continuing to inch up at a rate above inflation, despite the big jumps we have seen over the last year or so.

"However, if we do see a lot more supply come onto the market, we may see salaries level out from here."

He says the main risk is that firms operating in specialist financial areas, such as investment banking back-office staff recruitment, continue to struggle, leading to an increase of experienced recruiters looking for new jobs. Pritchard likens the situation for these firms to the difficulties faced by the IT sector after the 2000-2003 bear market, when many firms operating in that field fell by the wayside.

Although recruitment firms across several sectors report market conditions are getting tougher, there is little evidence to suggest that companies are changing their commission structures as a means of staff retention.

Tim Millward, founder of Extrastaff, says his firm is sticking by its guns and not differentiating between junior and more senior staff in terms of base salary, with experienced consultants being purely incentivised by the commission they can earn if they deliver.

"We attract good people by saying if you are good at what you do, you will make more money by hitting your targets," he says.

Commission remains a key component of overall remuneration packages more or less across the board, but basic salaries for senior consultants can vary by as much as £30,000 between agencies.

For example, GRS is among the highest basic salary payers, yet consultants can still earn up to 40% of the revenue they generate as commission. Stepped commission payments, in increments of 10% of salary per target hit, remain popular.

The one difficulty for experienced recruitment consultants wanting a move is that the tougher conditions can make shopping around that much more difficult. So, while rec-to-rec firms report that clients want to be 110% sure about any new hires, the same can be said of those staff they are looking to recruit.

• More jobs
• Jobs by Email
• My Profile

Miscellanies

• About Us
• Contact Us
• Site Map
• Advertising
• Terms & Conditions
• Privacy Policy

• Health & Safety
• IT & Software
• Materials Handling
• Property
• Storage
• Transport & Distribution

• Register
• My Details
• News Alerts
• Job Alerts
• About Us
• Contact Us
• Advertising
• Feeds