Firms more careful before hiring staff

Sunday Business Post - Recruitment Pages - December 30 2007

Despite a severe drop in activity in the residential construction sector, there has been significant growth in most areas of recruitment over the past twelve months, writes Dermot Corrigan.

The pace of activity in the recruitment sector in Ireland has slowed, in response to fears over the state of the economy and the drop in construction activity nationwide.

Graham Morris, director of staffing with Manpower Ireland, said that recruitment in high-value sectors, including IT and financial services, remained buoyant. He added, however, that employers across the board were taking a more cautious approach to the recruitment process, with a more lengthy and in-depth interviewing and decision-making process.

"What we are seeing is the time to hire is increasing slightly - the time between when we receive a job and actually place it," said Morris. "Companies are taking their time over hiring decisions as there are slightly more candidates out there at the moment."

Sectoral trends
The most significant trend in Irish recruitment in 2007 was the severe drop in activity in the construction sector, according to Sinead Wallace, Grafton Recruitment's regional manager for Dublin.

"In the last six months we have seen a massive dip in the construction sector, even for quite senior roles such as civil engineers and project managers," said Wallace. "Previously, if they had registered with us, we would have had numerous interviews for them very quickly. Now, we have noticed that clients are really taking their time."

The president of the National Recruitment Federation, Frank Collins, agreed that recruitment in residential construction was a problem. He added, however, that other areas were taking up the slack.

"The residential construction sector is way down, but there is still a considerable amount of construction activity going on in the civil area - in road building, office blocks and industrial premises," said Collins. "The higher level skills - quantity surveyors, architects and engineers - are moving across. When it comes to people like plumbers, there may not be quite the same demand, however."

Wallace said there had been significant growth in most other areas of recruitment in the past 12 months.

"The financial sector has still been growing steadily," she said. "We definitely have not seen any slowdown. In fact, we are still recruiting internationally for banking, funds, insurance and other roles. They are still finding it hard to fill the gaps here."

"The retail and services side of our business is definitely busier than last year," Wallace said. "It has probably grown by about 30 per cent in 2007."


Industry

Colman Collins, managing director, Collins McNicholas Recruitment & Human Resource Services Group, said that the most significant structural trend within the Irish recruitment sector in 2007 was the underperformance of general recruitment websites.


“The performance of job boards has dropped spectacularly this year," said Collins. "We track all of our placements over the year, and the number of placements filled initially using jobs board has dropped by thirty per cent in one year, and that is representative of the industry. Candidates, especially those with experience, are no longer prepared to reply to job boards where the same job may be advertised by an employer and by several recruitment agencies.”


Frank Collins said that the past 12 months had seen a falling off in the number of overseas workers coming to Ireland to live and work, particularly from Eastern Europe.


"There has been a slight drop in the numbers of non-nationals coming into the economy," said Collins. "The first wave of migrants, people who had emigration in mind, have moved already, and there have been plenty of jobs for them. The employment conditions and wage rates in their home countries have also improved."


Wallace said she had seen an increase in demand for temporary staff across all sectors in the second half of 2007.


"Whenever there is a bit of a slowdown, our temp business starts to go up," she said. "Where headcounts have been restrained, organisations are now taking in temps. They actually need people, but there has been a headcount freeze."


Brian Murphy, managing director of the Premier Group in Ireland, said that in the current climate Irish organisations were more comfortable employing temporary staff.


"The Irish recruitment market is becoming more aware of the advantages of using temporary staff," said Murphy. "In 2007 we had a large rise in temporary and contract staff across different sectors, including finance and office support. There is an element of 'suck it and see', take somebody for three months and test drive them, but more than that the market is becoming more used to the flexibility of temporary staff."


Morris said that employers were looking for more skills and experience for new-hires than in previous years, even for lower-level positions.


"There is a definite trend away from low-skilled opportunities, such as call centre and unskilled manufacturing, and towards higher skilled employment,” he said. “Now, companies are looking for a slightly higher skillset, whether in technical support, team leading or managerial experience, so the mix has changed."


Wallace said that the general election in May brought recruitment activity around the country to a temporary halt.


"May tends to be one of our busiest months, but last year, with the election, it was one of our quietest," she said. "People did not know what to expect, and there was a definite dip in all sectors. Afterwards it just picked up again."


Colman Collins said the Irish recruitment sector could be set for a shake-up in 2008, if the government goes ahead with possible plans to regulate the industry.


"The new Employment Agencies Act looks like becoming law early in 2008," said Collins. "I would welcome that with open arms. There are over 700 recruitment industries in Ireland, which is madness in a country of 4.3 million people. Standards in the industry have continued to deteriorate with more and more agencies chasing fewer and fewer candidates. The new legislation will hopefully deter ‘chancers’ from joining the business and will hopefully help weed out some of the ones that are already in it."



Year ahead looks solid

Frank Collins said the signs were that 2008 would be solid for the Irish recruitment industry, despite warnings of economic trouble ahead.


"There is a lot of talk of a downturn, but, in Ireland now, a downturn just means lower growth,” he said. “The media are a bit guilty of talking up a recession, but we are still facing larger economic growth than most European countries. This will lead to net job creation in 2008. We will place a minimum of 100,000 people into permanent jobs in 2008."


Brian Flood, chief executive, PARC HR Services, agreed that Irish recruiters would be busy next year.


"We are expecting a growth in employment of about 1.5 per cent next year," said Flood. "We are expecting the economy to grow at between two and three per cent. That means more activity than we have today. From the recruitment industry's perspective I expect a reasonably buoyant year next year."


Employers questioned in the latest Manpower Employment Outlook Survey said that they are less likely to hire new staff early next year than in previous years.


"At the moment, eight per cent of employers anticipate hiring more staff in the first quarter of 2008," said Morris. "This time last year, that figure was 23 per cent. Irish employers have begun re-evaluating and it would seem that many - 87 per cent - are taking stock and hoping to sit out the ebb in the Irish economy by not making any changes to their staff numbers in the next three months at least."


Most commentators said they expected balanced growth in employment in the Irish economy in 2008, with variations from sector to sector.


"Across our core markets of financial recruitment, office support recruitment, IT recruitment and technical recruitment, we expect to see different pressures with some sectors showing above average growth in 2008,” said Murphy. “Overall we expect recruitment to slow in the first half of 2008, but to pick up again in the second half.”


"Financial services will remain strong. Hospitality will be strong," said Flood. "Much of the services areas associated with the new economy will be strong. The infrastructure side of the construction sector will remain strong, but the residential side will be where it is most difficult. I am not sure about manufacturing, the jury is still out there."


"The industries with the strongest hiring intentions for the coming quarter are transport, storage and communication sector, electricity, gas and water and the pharmaceutical industry, which has predicted an employment outlook of 20 per cent for the coming quarter," said Morris.


Frank Collins said that economic uncertainty could potentially make candidates more wary of moving job in early 2008.


"People get a little bit more conservative and, therefore, are more risk averse," he said. "But anyone thinking of changing job or getting a better career, should not be worried about what they read. There are literally tens of thousands of jobs out there and people should not be afraid to move.”