The good, the bad and the ugly – The HB RIDA SME snapshot

SME recruiters were given the chance to give a snapshot of market issues at a recent round table event hosted by James Caan.  The ‘masterclass’, run by HB RIDA, the investment vehicle Caan set up with Helen Reynolds, is to become  a regular event for HB RIDA partner clients.  “While the recruitment sector has an estimated turnover of over £27 billion, the majority of operators within the industry are SMEs – and 95% of those have a turnover of less than £5m”, said Reynolds. “Consequently it’s important that they get a chance to share their views – they are after all the future of this industry.”

Delegates were asked to discuss the good, the bad and the ugly issues facing them at the moment. Uncertainty over the coalition government, public sector spending cuts and a lack of churn in the market among candidates were common themes. Another major issue was that of debtor days – particularly for recruiters with a large contractor base. “It’s hard to get clients to realise that we are not a bank,” said Duncan Bartlett, Operations Director of One Way Resourcing.

In the IT and telecoms market there was some very positive news: “After a period of downsizing through the recession, commercial managers and sales professionals are back in demand as organisations are winning more orders but haven’t got the back up needed to maximise their revenue potential”, said Mike Jones of Emerald Technology. 

“Uncertainty in the economy is the sort of sentiment that can really affect the housing market which has really picked up recently ,” said Paul Payne, Managing Director of One way Resourcing, a specialist construction recruiter – “so we could be seeing a double dip depending on how secure people feel after the emergency budget. However, I have to say that the contractor market is very healthy and we are seeing some excellent figures.”

This was a sentiment echoed by Jenna Barnes, Director at Cocoabean a generalist commercial recruiter based in Norwich. “We have really seen our temp numbers picking up over the last couple of months – and we are expecting to see an upturn in temp to perm as organisations begin to get sign off to increase permanent headcount.”  One of the big issues facing Jenna – and many other delegates around the table was the driving down of margins by competitors who were ‘buying’ business – but not delivering the service.

While public spending cuts may be at the top of the new government’s agenda, the education recruitment sector is seeing healthy activity. “Obviously providing education is at the very heart of government policy and so we are unlikely to see swingeing cuts in this area,” said Sharon Sperrin of Simply Education. “However budget cuts have meant that the cover supervisor area is very busy – cover supervisors are obviously cheaper than fully qualified teachers but the quality is questionable.  One of the problems is that unfortunately there is a very low barrier to entry to work as a cover supervisor – which is why we only supply those who are degree educated.   Staying with education, Ben Goldsmith of ANZUK Teachers – an agency that specialises in placing teachers from Australia New Zealand and Canada reported that March 2010 was his busiest and most profitable month on record. “The demand for good teachers is still high, especially in specialist subjects like  Maths, English and Science”, he said. “As the majority of our candidates are teachers and travellers, situations like snow days and volcanos disrupting air travel has a huge impact on our business. I would say that 50% of our workforce including internal staff missed a week of work due to the flight restrictions!”

The energy sector is another that has been a recent political hot potato. Neil Daly of Hamilton Consultants feels that while it’s clear that the nuclear power programme is definitely going ahead, the lack of skills within the area is worrying. “While clients all talk about looking at transferable skills – few of them actually commit.” Daly also feels that the government has to make a firm commitment one way or another to the renewables sector – and again – the clients need to look at transferable skills.  “If you’ve built a turbine engine you can build a wind turbine he says.”

“The recruitment industry is one of the most entrepreneurial industries this country has”, said Helen Reynolds, Managing Director of HB RIDA “I’m looking forward to trending some of the good bad and ugly issue facing recruiters as we meet on a more regular basis”.


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