The Market Outlook

What is your organisation's current position on recruitment?

The HR recruitment market definitely turned up at the start of the financial year, albeit it's still at a snail's pace compared to past years. Whilst business confidence is improving, it will be a quarter or two before this flows through and significantly drives up activity across the board although there are still some areas that have been in demand.

The interesting thing about the HR recruitment market in Australia over the past year, was that it was a snapshot of the total employment market. The current unemployment rate hasn't reached the levels expected by the reserve bank and most economists. This doesn't infer that people aren't hurting but the big picture is better than most people thought as the following graph indicates.

 

Similarly, as a percentage of the total HR market, not that many HR professionals lost their roles due to economic downturn pressures. This means the supply side wasn't as deep and as wide as many employing HRD's and companies imagine. The main issue in the HR market, and most other professional disciplines, has been that the demand side has been very, very soft. That means that excellent HR professionals that found themselves in the market through no fault of their own, have found 2009 very difficult as roles simply,........dried up!

The area that was most significantly impacted with very soft demand over 2009 was the early career HR market. That is not good news for the future supply of HR professionals. The 'chickens will come home to roast' for HRD's looking to recruit HR professionals in a year or so who have 3 plus years experience.

What have been some of the other real shifts in the HR recruitment market between FY 2008 and FY 2009? Firstly, Internal Recruitment roles went from 16% to 4% of the HR market. On the flip side, Remuneration roles doubled in terms of percentage going from 4% to 8% and ER/IR roles went from 1% to 3%. The other big mover in the total HR market in Australia was that HR generalist roles which went from 51% to 59% of the HR market.

But that was then and this is now. Hopefully, from now on, the demand for all levels and areas of HR professionals will gradually improve into 2010.

Craig Mason, The Next Step


UK - A MARKET SUMMARY

In similar fashion to many markets around the world, the shock of the failure of Lehman Brothers last year caused a rapid and steep retraction in recruitment across many industry sectors. After 5 years of strong growth, many companies decided to either freeze or significantly reduce their recruitment activities as they came to terms with the new economic reality. As unemployment has passed through the 2 million mark it has become clear that we are now in a deep and damaging recession that is causing acute distress in many areas of the economy.

So where does that leave the HR recruitment market? Our experience has been that the market for interim professionals has remained reasonably steady, albeit the requirements of clients have shifted away from recruitment and development roles, to acquiring restructuring, change and reward expertise. In the permanent recruitment market, the downturn has been far more noticeable. Clients are quite rightly being far more cautious in their hiring decisions, and as a result, processes have become far more drawn out, with no guarantee that an appointment will be made. As a result, we are seeing a lot more permanent candidates who are embarking on short term interim assignments to tie them over whilst looking for their next permanent position.

Another facet of the current environment is that we are increasingly seeing a firming of salaries being offered to candidates as employers realise that they are in a stronger negotiating position than a year ago.

Trying to provide predictions for the year ahead can be difficult in the good times. Trying to do so when there is so much uncertainty, is nearly impossible. However, I think it is fair to predict that 2009 will continue to be a very tough year in recruitment with companies reluctant to increase employee cost unless they can see a real need to do so. Where short term projects need completing, it is likely that the demand for interim managers will hold up. Our hope is that 2010 will bring an end to the economic winter, and a spring thaw in confidence will arrive. Only time will tell.

In the meantime, it will not be all doom and gloom. There will still be some great opportunities available, and the challenges that HR are presented with will provide some outstanding experience for many HR professionals.

One of the key areas where HR professionals can make themselves more marketable and attractive is a simple one. The preparation of a good CV is imperative. In such a competitive market, candidates must ensure that their CV clearly sets out their achievements in a quantifiable manner. A CV that purely lists responsibilities will prove less attractive. Where companies are looking to clearly ascertain the value that an individual will bring, the first step in marketing oneself is to take a highly critical view of this key marketing tool.

John Baker, Macmillan Davies Hodes


ASIA - A MARKET SUMMARY

After the bull run of early 2004 to late 2008, the job market in Asia almost came to a standstill following the global stock market crash and the failure of Lehman Brothers. The job market for the last 3 months of 2008 froze as companies closed their doors and companies took stock of the consequences of what was happening to the global economy. Since then the number of lay-offs and redundancies have gathered momentum with probably more to follow as we head into Q2 of 2009 and into Q3. However, the unemployment rate was 5% in HK in February 2009 and 2.6% in Singapore in December 2008, far lower than the rate in the UK and USA. It is widely held that Asia, although suffering, is suffering less than North America and Europe.

There have been definite signs of life in Asia since Chinese New Year (late January 2009) although hiring is still at a subdued level. Confidence in recruiting is gradually creeping back into the market and, as was the case during the Asian crisis in the late 1990's and during the 4 year downturn caused by the tech bubble bursting in the early part of this decade, the market, as we go through the next year or so, will be characterized by replacement recruitment. Organizations are starting to realize that there is a growing pool of strong HR talent across Asia and want to take advantage of this by upgrading their HR teams.

The demand for interim HR professionals has expanded by roughly 10% but no more. Traditionally, across Asia, contracting has never caught on as it has in the UK, the US or Australia.

Last year Profile Search & Selection placed a number of expatriates - 56% of HR placements made last year were expatriates in fact. That figure was even higher, at 59%, for 2007. Most of these (75%) were placements of expatriates who were already "in situ" in Asia. It is envisaged that the overall percentage of expatriates placed will decline to 20% to 30% in 2009 and 2010, with a far smaller proportion being expats being placed directly from overseas. As shown by the last two downturns, 'localisation' of positions tends to be the trend with fluency in Mandarin and Cantonese increasingly being pre-requisites for most roles being recruited for.

Recruiters, after a very positive run over the last two to three years (over a quarter of HR
placements made by Profile Search & Selection in 2008 were recruitment positions), are less in demand too, for obvious reasons.

Salaries have mostly stayed flat with 10 to 20% of HR professionals receiving an increase, but then these have been only token hikes of 2 to 5% for top performers. Bonuses have been
subdued but some banks have paid out well, surprisingly.

Currently, recruitment within financial services has been hit relatively hard but hiring is still happening for critical hires and replacements of poor performers. Selective hiring is taking place in Commerce and Professional Services too.

The above trends are seen across Asia from Hong Kong and Shanghai to Tokyo and Shanghai. Shanghai is relatively less subdued with Tokyo being the worst hit.

Proper signs of life will probably be seen in Q2 of 2010 after bonuses are paid and the domino effect of people leaving and having to be replaced will hopefully give the job market for HR professionals a shot in the arm.

Richard Letcher, Profile Search & Selection

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