Which staff to cut? Ask a recruiter first

Wednesday, December 10th, 2008 - credit crunch, economics, Employer, Employment


Which staff to cut? Ask a recruiter first

The quarterly Manpower Employment Outlook survey was released this week, showing employment trends for Q3 2008 and predictions into Q1 of 2009. To say it doesn’t look good is an understatement, with hiring globally down at least 90%, with it set to slow further in the first quarter of 2009 most notably in Singapore, India and Taiwan.

The Manpower survey is the most extensive, forward-looking employment survey in the world with interviews of over 71,000 employers, with this report showing that employers in 25 of 33 countries and territories still expect positive hiring activity in Q1 2009; however, those in 30 say they will slow the pace of hiring from three months ago. Year-over-year hiring forecasts are also weaker in 25 countries and territories; and employers in 21 countries and territories are reporting the weakest hiring plans since the survey was established there by Manpower.

Jeffrey A. Joerres, Chairman and CEO of Manpower Inc. comments: “The global employment picture for the first quarter of the new year is noticeably weaker and the vast majority of employers are telling us that they will take a ‘wait and see’ approach before hiring or further reducing staff. Unless they see more positive economic signals they will not add employees and, until then, it will be a rougher road for job seekers. Interestingly, the number of U.S. companies planning no change in their hiring intentions is considerably higher than during the 2001 recession. This may suggest a much needed pause in downsizing in the first quarter.”

This tends to suggest that companies have made their first and probably second stage cuts in preparation for 2009, and now are just waiting for a sign from the economy in late Q1, post the inauguration of Barack Obama. Having cut to the core business, where next?

I suspect a lot of first stage cuts were associated with implementing long-term consolidation plans into the now phase: hence the cuts in distribution at both Matthew Clark and what was Scottish & Newcastle, those in production at Borg Warner, etc. The second stage was probably trimming away the not-needed excess capacity, and removing most of the under performing staff. But where next?

I suggest the first call for a stage three downsizing exercise should be to a recruiter, as part of an information finding exercise as to which trades are considered skill-short, or under supplied. These are the skills which there are presently not enough of in the economy, even in a downturn – making them very hard to find when the market bottoms, let alone up turns. They are also often long-lead training skills, where the time alone to train a competent employee runs to at minimum five years.

Manpower themselves in April 2008 issued an annual 10 Hardest Jobs To Fill Survey, using those same 71,000 global employers, suggest that the 10 Hardest Jobs to Fill as reported by U.S. employers for 2008, are:

  1. Engineers
  2. Machinists/Machine Operators
  3. Skilled Trades
  4. Technicians
  5. Sales Representatives
  6. Accounting & Finance Staff
  7. Mechanics
  8. Labourers
  9. IT Staff
  10. Production Operators

In the UK, our own Borders and Immigration Agency released their Tier2 thru 5 list of skills short sectors in October. Now, if you want to employ a non-EU resident, there is a points system to allow entry, with more points for skills-short sectors. I would suggest any employer seeking to downsize looks at the Tier2 list before making any redundancies – for instance, did you know we as a country are short of chefs?

As an insiders tip to any company thinking of down sizing: if you ring a recruiter who is a specialist in that sector (no one can specialise in more than four sectors), and even now and after a bit of bartering they are still asking for a fee of more than 25% of annualized package, it is still a skills short sectors.

The global credit crunch and resultant recession are not pleasant for any employer, but wise choices made now in which people and skills to be cut in which proportions will make a difference when the up-turn occurs. Then, organizations looking to expand and needing these presently skill-short trades will know what skill-short really means.

Good Luck!

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