One Financial Year On

Simon Kent logs on to the Recruitment Live industry discussion with business leaders and finance directors from recruitment companies.

With the one year anniversary of the first Covid-19 lockdown on the horizon, Recruitment Live, our roundtable industry discussion, took to video links to bring together recruitment professionals to reflect on the impact of the pandemic on their organisations. Sponsored by Cambridge Global Payments, the primary focus of the session was financial, and it was clear that the past year had seen many recruitment companies faring well against immense challenges, following a clear, pragmatic and professional approach throughout.

Logging on were:

Catherine Phillips, Chief Financial Officer, Spencer Ogden
Yahya Essack, Financial Controller, Cobalt Recruitment
Paul Mansfield, Group Reporting & Treasury Manager, Hydrogen
Tom White, Managing Director, Paratus People
James Soden, Director, E3 Recruitment
Adam Wooldridge, UK Director, Volt International
Steven Rawlingson, CEO, Samuel Knight International
Simon Kent, Editor, The Global Recruiter
David Earl, Business Development Manager, Cambridge Global Payments

Sponsored by:

 

 

 

The discussion began with a reflection on the initial impact of the pandemic, with the first lockdown and the adjustments that needed to be made – in some cases quite swiftly. From a practical point of view some recruitment businesses were more ready for their staff to work remotely than others. Tom White reported that their infrastructure proved flexible to cope with the challenge and with everyone ‘doubled down’ effort-wise the business came out quite well, enjoying some strong months. Hydrogen’s Paul Mansfield also highlighted his company’s recent investment in cloud-based systems and laptops as key to being able to take advantage of the shifting markets as the pandemic took hold.

Certainly agility and the ability to flex according to market conditions has been key to a recruitment business’ ability to weather the storm. But this has been backed by the readiness of staff to learn and adapt as well. At Volt, there was something of a pivoting of resource to client demands as recruiters were deployed to reflect a strong life sciences sector compared with the challenged engineering sectors. “We’re a diverse company with recruiters in both their twenties and fifties, and those newer to recruitment had to grow up quickly,” notes Adam Wooldridge. “There was uncertainty with some clients getting rid of contractors but as the business stabilised we could bring more people back from furlough. Many of the younger consultants had to grow up really quickly and as a result now manage their desks with a far greater level of maturity than before.”

Catherine Phillips also highlighted the ability of staff to respond to the situation, noting that as the pandemic eases these talents will be able to flourish more strongly as markets become easier. James Soden also added that their people had taken a more 360 degree approach to their recruitment work, with the emphasis now as much on maintaining good relationships as attention to sales.

There was a variety of approaches taken to managing the financial impact of the pandemic, with some recruiters taking full advantage of furlough and the business disruption schemes, while others found they weren’t required or could be paid back before the time they were due. Catherine Phillips explains her business underwent a ‘rebudgeting’ rather than a ‘reforecasting’ of performance. The business was not alone in analysing staffing levels as another participant said they found many recruiters weren’t actually contributing to the business’ monthly NFI, with the result that there is now a new emphasis on ensuring the right people are working for the business and are supported to make a positive contribution straight away.

One pressing issue shared across the board was that of client payment terms, which perhaps unsurprisingly became a focus for renegotiation as wider industry took the hit. This, and the ongoing financial pressure within recruitment businesses led organisation leaders to examine their own cost basis.

“We had clients who were trying to change payment terms,” says Paul Mansfield, “going to ninety days and more.” Yahya Essack notes they were also asked to extend terms which they did where they could. He says that doing so was a clear indicator that they still wanted to work with certain clients and would make this easier wherever this was possible or seemed the right thing to do. At the same time there were other recruitment companies who fired clients because the work no longer made sense in the current circumstances.

Cutting costs was also a priority for many recruitment businesses, identifying where budgets could be trimmed and money saved. For many, including Essack, rent was a particular focus to consider while others looked at shifting to shared office space or scaling back the locations of international operations. Steven Rawlinson, whose business had invested in a new office location just four weeks before lockdown, also secured rent breaks from their landlord. Rawlinson also suggested the steep decline in business expenses experienced during the lockdown – due to the lack of business trips to visit clients and so on – is an aspect every company would like to maintain as movement becomes freer again.

Rawlinson also noted that in some cases the international dimension of a business offered some protection against the impact of the pandemic. In his business’ case the wind power sector his company serve in the US grew by 140 per cent during the year, off-setting dips experienced elsewhere for example in the UK’s rail and energy sectors.

David Earl of Cambridge Global Payments, sponsor of the event, says he was impressed by a number of actions taken by the recruitment companies involved:. “Firstly, was how resilient the industry has proven to be. The ability to identify, adapt and overcome such unprecedented challenges is something that must be recognised,” he said. “Whether it be pivoting into a new market or investing more resource into sectors that may thrive, all are still confident and optimistic to tell the tale.

“Also doing all they can for their staff and consultants,” he continued. “Of course, the use of government schemes may have been required to begin with. However, as soon as possible staff were back at it ‘doubling down’ to steady the ship.

“I have no doubt that I’ll be hearing from customers that they will be working with more clients and continuing to grow across Europe, the US and APAC. When this time comes, we will provide you with the information and the options available, so you are best placed to formulate the best FX risk management strategy for your business,” he notes. “This will provide you with certainty on your foreign revenues and support future growth.”

Certainly as the hoped for easing of the pandemic and lockdown materialises, these businesses will emerge leaner and even more agile, ready to take advantage of the returning work. There is a clear appetite for doing more with less within the industry, for ensuring staff make a high level of contribution and that every pound spent by a business is worth it. Ultimately the industry may emerge from the pandemic stronger and more certain of the value it delivers to its clients.

David Earl of Cambridge Global Payments, sponsor of the event, says he was impressed by a number of actions taken by the recruitment companies involved:. Firstly, was how resilient the industry has proven to be. The ability to identify, adapt and overcome such unprecedented challenges is something that must be recognised,” he said. “Whether it be pivoting into a new market or investing more resource into sectors that may thrive, all are still confident and optimistic to tell the tale.

Also doing all they can for their staff and consultants,” he continued. “Of course, the use of government schemes may have been required to begin with. However, as soon as possible staff were back at it ‘doubling down’ to steady the ship.

I have no doubt that I’ll be hearing from customers that they will be working with more clients and continuing to grow across Europe, the US and APAC. When this time comes, we will provide you with the information and the options available, so you are best placed to formulate the best FX risk management strategy for your business,” he notes. “This will provide you with certainty on your foreign revenues and support future growth.”

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