This article first appeared in Inside Recruitment: www.insiderecruitment.co.uk
In the six months that have passed since September 11, there is little doubt that for the vast majority of the US recruitment industry, particularly in New York, it has been batten down the hatches time.
TMP's director of recruitment in New York Oren Klaber told Inside Recruitment: "The volume of work given to agencies has been dramatically down since September 11. I don't know that anybody has actually gone out of business, but from a recruitment business perspective, it's been very, very tough."
Since September 11, thousands of jobs have gone in New York. In November alone, job losses were 22,500 while 250,000 US jobs went in a single month. Although nobody is suggesting that that is about to change dramatically, a sense that the market has bottomed out is emerging following this week's news that non-farm payroll jobs were up by 25,000 in February. Also the latest Manufacturing Institute of Supply Management index for February shows for the first time since July 2000, positive growth. Chairman of the Federal Reserve Alan Greenspan has also claimed that the economy is on the up.
Gradual recovery
Greenspan told Congress that the central bank expected growth to resume this year and described the economy as "close to turning point". However, he warned that recovery was likely to be gradual.
His views, though welcome, are contradicted elsewhere. A survey by the Business Council in the US, an association of chief executives, found that a massive three-quarters still believed the US was in recession. However, the same number also predicted the recession would end in 2002, with half stating that it would pick up by the middle of the year at least.
TMP itself conducted a survey of HR directors in the tri-state area which showed that 73 per cent of companies that are currently not recruiting expected to be recruiting again within the next six months.
That is heartening news for a market that has suffered nothing but pain in the last six months. Not that TMP's Klaber is over-enamoured with the results.
He says: "It's been very flat this quarter and we expect it to be the same in the next quarter. Although companies are saying they will recruit in the next six months, I think it will be a case of battening down the hatches for the next year. New York in particular is financial services-orientated. That market is yet to pick up."
Elsewhere the report concludes: "Companies are much more cost conscious, spending more time evaluating internal talent before going outside for recruitment." It adds: "HR executives are redefining their roles. Since they are doing less aggressive recruiting they are taking a more proactive role in reviewing their internal recruitment processes."
TMP's view is corroborated elsewhere. Adecco's senior regional vice-president of New York metro region, Kathy Cavanaugh said: "Members of the New York Association of Temporary and Staffing Services (NYATSS) report revenues in the temporary staffing industry down by 20-30 per cent. "Small companies, especially those that specialise in staffing the financial industry, have been the hardest hit. Some of these have been closed or bought by other companies in the region."
She said there were 'hopeful' signs of a pick up and said: "Companies are still keeping an eye on their bottom line - cutting costs, laying off people when necessary and outsourcing functions such as accounts payable and human resources. She said: "In the New York region, home health care and pharmaceuticals have been relatively steady throughout the overall downturn. Some companies within each industry are doing better than they were two-three months ago."
It may be straw clutching, but given some of the scenarios depicted in the immediate aftermath of September 11, there is a change in recruiters' attitudes. And if the US economy does gather a head of steam, the bounce-back might come sooner than we expected.