Recession and online recruitment - 10/2001

ëRecessioní seems to be the buzzword of the moment. Everyday we are faced with headlines claiming thousands of job losses and the looming threat of recession. City firms are asking employees to take year-long sabbaticals in order to avoid redundancy and graduate trainees are being sacked days before they are due to start work. The ramifications of an economic chill for online recruitment are considerable, particularly if we slide into a full-blown recession, as national media would have us believe.

When looking at the future of online recruitment and how it would fare in times of recession, it is essential to look back over the history of the industry. When online recruitment fully took off in the early nineties, it was largely to service the IT and Telecomms industries who were the earlier adopters of the Internet. Subsequently, a myriad of new sites began to emerge in the market place to serve the IT and Finance sector. These sites offered a welcome alternative to those employers fed up with paying the traditional agency placement fee. The big names, such as Monster and Jobserve, were, however, serving a very specialist market place and offering predominantly high end and middle management jobs. None of the plethora of sites offered positions to the mass market, reflecting that the latter were not yet online and therefore not yet a viable target market.

Today the Internet has been embraced universally and yet online recruitment still largely serves the high-end permanent market. The IT and Telecomms industry has slowed down dramatically; the telecommunications industry has cut close to 345,000 jobs worldwide this year alone. Demand for staff in these sectors is shrinking.

Many of the big names in online recruitment have realised the need to diversify their offering. Some have introduced new channels such as graduate jobs, others have added a range of HR solutions to widen their appeal. Within this context the semi and unskilled sector have continued to grow, expanding over 400% in the last decade.

During any recession, the ratio of temporary to permanent positions will increase more dramatically as a growing number of employees are taken off the permanent payroll. 900,000 people are placed in temporary work each week compared to only 450,000 permanent placements in a year.

The online recruitment industry has undergone a seachange in the last 12 months. Countless sites have fallen by the wayside for not grasping the needs of their jobseeker or being able to match the opportunity to the skill set. To survive the next year, with or without a recession, online recruitment must demonstrate a comprehensive understanding of the client and candidate, whilst operating within a working model which allows for both a healthy revenue stream and multiple product offerings across the entire HR landscape.

Online recruitment has already firmly secured its position as a valued medium for employers looking to access quality candidates. And as all are forced to respond and streamline in the face of an uncertain economic future, one thing is for certain, itís not online recruitment companies who should be worried but the traditional high street agencies whoíve had it far too good for too long.

www.hotrecruit.co.uk