To invest or not to invest,
that is the dilemma faced by the Hamlets of the UK recruitment industry in Q1 of 2012. Because the only things we can be certain 2012 will bring are caution and some tough decisions from recruiting companies.
For those recruiters bold enough to invest in good new recruitment talent, ‘carpe diem’ should be their motto: seize the day. Spend in most recruitment sectors will decline in 2012 versus 2011 in the professional recruitment disciplines (i.e. Finance, IT and Engineering) anywhere from 4-8%. Let’s not despair, however, since even under such straitened circumstances, the UK’s recruitment industry is still worth £25-30billion.
Recruiters with a more balanced exposure of interim versus permanent business will probably fare best in 2012. Today, most recruiting companies have an overreliance on a relatively small number of clients, so the success of recruiters will be symbiotic with the success of these clients. No doubt, many will be nervously following their clients in the financial pages throughout 2012.
Companies are going to demand increasing flexibility in their workforce and recruitment companies will not be immune to this trend. But those recruiters who have worked to cultivate more innovative and efficient workforce solutions should see dividends from this investment as difficult times persuade more clients of the value of modern solutions. At the same time, most clients will continue to adopt initiatives targeting savings in headcount, most likely resulting in vacancies for interim staff and contractors falling more slowly than those on the permanent side.
With the public sector stubbornly failing to bounce back and the banking sector resolutely cautious throughout 2012, many recruitment companies will cast hungry glances towards new sectors and niches, unable to resist the lure of 'specialising' in them. Those that do invest in new sectors will need to be serious about it – planning long-term and able to offer innovative value-added propositions – if they are to gain a worthwhile foothold. Remember that there is still a talent mismatch between employee skills and employer needs in the UK, so opportunities are there in 2012, all that’s required is sufficiently educated and driven recruiters to take them.
Boutique and international recruitment companies will continue to diverge in 2012. Those recruiters left in the increasingly stretched middle will be forced to decide which camp they belong to and align their boardroom strategies before market pressures to be one or the other pull them apart.
Money and margin pressures in 2012 will continue to drive consolidation in the industry, and we are likely to see casualties even among well-known brands, as competition grows ever-more fierce. On the plus side, the future for good, ethical, innovative and financially stable organisations should remain bright, just so long as they remain good, ethical, innovative and financially stable.
This article was written by Geoff Smith, MD of Elan UK, and first appeared in The Grapevine Online
