A quarter of the industry has already gone, say rec-to-recs

Managing recruiters · Contracts · Business planning

About 25% of all consultants have been retrenched from the recruitment industry over the past six months, according to leading rec-to-recs, who also warn that a further 25% may go before the downturn is over.

Long-term rec-to-rec specialist and managing director of Turnaround Recruitment Ben Richardson told Shortlist he believed at least a quarter of all recruiters had gone since last November and many of them would be unlikely to get back into the industry in the near future.

Richardson said Turnaround's phones had been "ringing off the hook" since the beginning of the year, with recruiters seeking to be represented to the market. Turnaround now had a general rule that if a candidate wasn't currently employed, it was unlikely to market them.

He stressed that while there were exceptions to this rule, - and "everyone you meet who's not currently employed would claim to be that exception" - Turnaround preferred to give candidates honest guidance on their prospects.

This was because it was now virtually impossible to find a job for anyone but the most exceptional consultants with long-term billing records and absolute blue chip networks.

He said in many cases, potential employers wanted to see documented evidence of a consultants' billing records over the past twelve months and in particular since the beginning of 2009.

Richardson said there had been big reductions in consulting headcount among the small to medium agencies, many of which had cut staff numbers by more than 50%.

Scott Recruitment founder Rosemary Scott agreed that there had been a massive downsizing across the entire recruitment sector, and put the figure at between 20% and 25%.

Scott, who has worked through a number of market peaks and troughs during her career, said the industry had become over-crowded with small companies which were heavily reliant on perm placement revenue, and were now shedding staff in large numbers.

"A lot of these smaller companies don't have a temp book, and that's what's keeping most of the larger recruitment firms alive at the moment - their contractors and temps."

She said that it was clear that the industry was moving through one of its periodic large-scale rationalisations, which would see the number of companies and people working in the industry reduced.

"It's not actually a bad thing, as it does get rid of some of the cowboys in the industry. Unfortunately, sometimes there are companies of quality that go as well."

Hughes Recruitment principal Paul Hamilton said he was seeing a lot of experienced recruiters who had been running their own business for two to three years, wanting to get back into a big agency.

He said many recruiters had found it relatively easy to do well on their own in the boom years, and built their business plans on the expectation of a continuing strong labour market. They simply weren't equipped to deal with the current downturn.

In a recession, Hamilton noted, small agencies and single operators struggled as clients opted for the security of dealing with large, well-known providers.

"Potentially, some clients may be looking at more established brands. They're looking for guarantees to be honoured, and probably the bigger names offer more security."

Impact yet to be felt: RCSA

RCSA chief executive Julie Mills said the Association was yet to see any drop-off in its corporate membership, but the picture would be clearer after it went through its renewals period in July.

In terms of individual consultants, she said, for each accredited professional who wasn't renewing their membership the RCSA was picking up two news ones, as industry uptake of the professional program continued to grow.

She noted that many consultants who were no longer employed in the industry were still keeping up their accreditation status because they were committed to holding out until a job became available.

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