How can companies survive and stay ahead in the current climate? Bo
Although a European recession has not yet been officially declared, clear
signs of the economic downturn are evident throughout the region. One of the
most telling suggestions that the boon period is over is the number of
companies continuing to lay off staff.
According to the Careers Advisory Service of Trinity College, in the UK:
"Financial services have suffered with job cuts of almost 5,000 this year
as activity in the financial markets has fallen." And Germany is not
faring much better. A recent victim was BASF, which announced job cuts because
of reduced demands for products."
Further east, things are not much better. The US Department of Commerce
predicts: "Slovakia is probably about to enter into a recessionary period
with a return to double digit inflation, higher levels of trade protectionism
and requirements for international financial assistance."
Downward trends such as these significantly affect the recruitment and
retention policies of most European companies. But is it as bad as some people
make out? Not at all.
Although severe, today’s economic slump by no means implies there is a
dearth of top talent on the market desperately looking for work, or that
companies are now back in the driving seat hiring and firing at will. The
market is still very much candidate-driven.
Explains Amanda Evans of Jobpartners, a company that provides strategic
solutions for HR management: "Businesses will always hire people, even
during an economic downturn. They may reduce the number of employees they take
on, but they will still be recruiting right across the board. People who have
the skills to carry out cost cutting, help companies streamline or organise
outplacements will be particularly in demand," she adds.
Jean-Marc Benker, director of Robert Walters, a global recruitment and HR
outsourcing business, concurs. Although he has seen no significant change in
the number of people being hired, he notes: "There might be a small
transfer from more business development-oriented candidates such as M&A,
business developer, consultants, to more ‘pure controlling’ profiles such as
cost analyst, experts in restructuring or credit controllers.
"In addition," he says, "candidates are expected to be more
stand alone as less money is available for training."
Antoine Morgaut, in Robert Walters’ Paris office, has seen similar changes.
Asked what skills she considers to be most in demand at the moment, she lists
"accountants, business analysts and international finance
In France she has seen a change in hiring policies, which she describes as
"widely frozen for the moment." This is especially true in telcoms,
IT and consultancy, she points out.
For Jobpartners’ Evans a more important issue for companies now "should
be how to manage talent in preparation for the economic recovery. At the end of
a downturn, there is always a rush to recruit highly skilled people", she
Her advice for companies looking to get ahead is to "assess what talent
will be vital to their competitive position when market confidence returns and
get ahead of the game. This entails a combination of strategies to recruit and
retain talented people in key areas".
However, there are certain limitations as to what companies can do. During
the economic upturn, recalls Robert Walters’ Benker, "due to the war for
talent, companies adapted their remuneration structure. It would be very
difficult for them to go back on this".
He adds: "When they recruit today companies tend to be more prudent in
terms of remuneration versus the added value of the candidate. There is no more
‘hire at any price’ strategy."
An inventive solution comes from Germany, where Electronic giant Siemens is
upbeat about the future, according to ISS Financial Network. It reports:
"The company thinks the lean times won’t last. Although Germany has a high
level of unemployment, skilled labour is scarce and Siemens wants to hang on to
its key personnel. The war for talent continues, albeit on a narrower
According to ISS Financial Network, to prepare for better times ahead,
Siemens has introduced a scheme whereby employees in Munich and Berlin who work
for its mobile communications division will be able to apply for leave of between
three months (on 50 per cent pay) and 12 months (on 20 per cent).
How long it takes for the future to brighten, no-one can predict. But Evans
of Jobpartners believes firms should already be taking a number of actions.
"Companies will need to improve the way they recruit people in order to
cope with changing economic conditions. During a recession they will need to be
able to handle the increased number of job applications. When markets start to
recover, firms will need to be in a position to hire talented people quickly
and keep hold of their current employees, who may be tempted away by their
To accomplish this, she predicts: "Companies must increasingly look at
ways they can streamline and automate traditional recruitment practices. More
and more," she continues, "they will adopt technologies that can help
dispense with paper incentive systems. This will leave HR departments free to
tackle more strategic issues, such as skills shortages that will inevitably
Scandinavian-based CIP has already taken this route. It has introduced a way
of automating its recruitment practice to meet an immediate challenge of hiring
100 highly skilled consultants at the same time as streamlining the whole
process and cutting costs.
No matter what measures firms take to hold on to their top talent, some
people will eventually leave. What will be important is keeping in touch with
these ex-employees so that, ultimately, they can be encouraged to return.
Evans foresees an increase in popularity of alumni networks for former
staff. "Networks provide former workers with an easy way to recommend
talent even find a way of returning," she says. "We will see a
particular growth in these networks once market confidence returns and the race
for talent begins," she concludes.