2009 Predictions with Jeff Weidner

I think 2009 is going to be a great an interesting year. The thing about recruiting is that in good years you can do much better than almost most anything you are qualified to do and in bad years, well it goes the other way sometimes. It's the good years though that keep the lips smiling and the warm and fuzzies in your gut. In the tough times, it's real important to remember the good. Sometimes it's not so easy but nevertheless it's necessary and certainly we need to think always about the next 365 days - good or bad.

I was talking to Jeff Weidner and we were talking about some of this stuff before you know it, we had a plan so instead of me continuing, Jeff is going to take the floor here with this post.

There is no doubt that the end of 2008 definitely made an impact on a lot of people. And since the holidays fell in the middle of the week, plenty of people have had time to look back and reflect on everything that went on throughout the year. There was plenty to remember, 2008 was a busy year. If December is the time of year to look back and reflect on the year that has just gone by then January is definitely the time to look forward. It has been promised that 2009 will be year for “Hope and Change” and I’d like to share my predictions for 2009.

Prediction # 1

Recruiters that built their social network originally to locate and identify potential candidates will be looking for more ways to leverage those relationships and turn them into job orders and placement fees. So if you are a member on any social network, you can expect to get a lot more phone calls, e-mails, resumes and forward requests from the contacts you've made off all your social networks. Recruiters will be utilizing those networks more efficiently not only to locate and identify potential candidates but also customers. They’ll also be looking for new and innovative ways to reach out and engage with their networks as email campaigns are only so effective and it’s the organizations that can not only attract the membership base but also keep them engaged and coming back that will eventually retain the business.

Prediction # 2

Recruiting and Sourcing fees will decline. Fees will be reduced by two main factors:

a. The first factor will be competition, as it becomes more competitive in the marketplace recruiting firms will become more aggressive in their pricing strategies to win business away from their competitors.

b. The second factor will be a matter of candidate supply and demand. As the candidate supply goes up companies will inevitably lower salaries and contingent fees based on those lower salaries will follow that trend. In most markets, I’d expect about a 5% drop in salaries but it could be as high as 10-15% in some of the most competitive markets. Contributing factors will be A) fewer positions available in the marketplace and B) because of a big increase in highly skilled and qualified candidate to fill the positions due to layoffs. Consequently, those companies that are hiring will have the pick of the litter at a much lower salary cost per employee hired as compared to a few years ago.

Prediction # 3

Since the financial crisis facing the USA is also one that is hitting the entire global community across all sectors and industries I’d expect to see some consolidation/M&A activity of recruiting companies that have a good client and asset base in late spring to early summer. Expansion at the earliest signs of a recovery will be largely dependent on loosening of financing strings that are currently tying up markets but could provide a lot of benefit in stabilizing the marketplace.

Prediction # 4

The baby boomer retirement wave that many recruiting firms (and future retirees) have been waiting for will be delayed at least 1-2 years. The Social Security Administration stated that the first set of baby boomers became eligible for retirement benefits in 2008. But with the financial market vaporizing stock and mutual fund retirement portfolios many baby boomers will have to delay retirement a few years to catch up risk locking in those losses when they rebalance their accounts in preparation for retirement. Many baby boomers that were not prepared for the financial meltdown may need to obtain part time work during their retirement, at least for a time, to offset major losses in the market. This could actually help US corporations that are willing to implement flexible schedules for their aging workforces.

So there are my predictions for 2009. Please remember 2008 is in the past, all things in life are temporary and it’s up to us to create that new life in 2009 that is full of “Hope and Change”! On behalf of HTC Research Corp I’d personally like to wish you a happy and prosperous 2009!

What do you think will be in 2009

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Replies to This Discussion

Permalink Reply by Bryan Starbuck on January 9, 2009 at 3:58pm

These productions look exactly on target.

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Permalink Reply by Marney Reed on January 9, 2009 at 5:48pm

I don't think we should even be talking about cutting our fees. We work hard for our money, I'm still going to work hard for my money, I'm not going to cut any part of my service, so don't think I should be having to cut my fees! It's not wise to focus on the negative!

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Permalink Reply by Robin Gillman on January 15, 2009 at 3:11pm

Considering Donato Diorio's posting, item #3 and my understanding of Jeff Weidner's reply to the unlikelihood of the HR Dept being integrated with Staffing & Recruiting, I am uploading an article on what I call, Seamless Recruiting. I understand that the mindset of HR and Recruiting are much different and how integrating the two might seem difficult if not impossible. This of course might be true except for Donato's prediction regarding ATS's and technology. The only part which might stay separate for HR might be actual payroll (accounting practices) and benefits administration (might go to a third party). Of course, I could be looking too far into the future regarding this integration prediction or too myopically thinking that technology overcomes all.

Jeff Weidner said:

Ken and Robin,
Funny enough, I almost made the same prediction in my original post and I think that trend may be true for some industries (such as Healthcare where margins are thin) but I think overall across all industries The Recruiting Dept and the HR Dept will never recombine. HR and Recruiting depts have been on diverging paths for the past 10-15+ years and I don't see that changing except in very specific circumstances.

Staffing Departments, especially in Silicon Valley, have finally extricated themselves from HR and earned a seat at the table.I doubt many Dir or VPs of Staffing would be willing to give up that seat. If for no other reason than because they are a major cost center of most larger corporations they were "expelled "by HR because HR did not want to manage the budget:-). Instead Staffing Depts they will find new ways of being more cost effective and more efficient.

HR has been more of a avenue to side step costly litigation and liability surrounding employee issues and recruiting has always been a big drain on the purse. This is obviously over simplifying things and certainly not meant to stereotype anyone or devalue their contribution just trying to make a point. That HR and Recruiting at most larger companies were split for very specific reasons, a few of which I point out here, but if a company is still hiring and has plans for growth then splitting out HR and Staffing in most (maybe not all cases) does make sense.

Which kinda brings me to the final point that I'd like to put out there and that is if the argument you are making for recombining HR and Recruiting Dept is reliant upon longer term workforce planning then why are many companies creating new departments specifically to address Talent Management, Workforce Planning and Organizational Development.

It seems to me that it's becoming more and more commonplace for larger companies' HR departments to be split once again creating 3 separate and distinct departments.
1) HR
2) Staffing/Recruiting and
3) TM, WFP and OD ( I'm not writing all that out again:-)

And I think that if it can be justified either through a cost analysis or a employee skill set analysis or through hiring/retirment projections then it makes perfect sense. TM, WFP and OD will have a mach larger seat at the table as baby boomers retire en mass, but if you refer to my Prediction # 4 I think that baby boomer retirement will be postponed a bit.

Also this split between HR and Recruiting is taking place much the same way that the split between Recruiting and Sourcing has happened. Many companies are setting up Sourcing groups within their Staffing department in an effort to reduce costs.

So my final analysis is I didn't include the prediction cause though I believe it may be a financially needed and plausible outcome I don't think it will be adopted across all sectors and industries. No doubt, some will be early and adamant adopters of "Combine or Recombine HR with Staffing Strategy" but ultimately I don't see it as being very viable long term for most corporations across industry sectors.

Interesting twist though thanks for adding that...it may actually come down to how deep and bad the recession turns out to be. Companies may have their hands forced and without longterm plans for recruiting in place (due to layoffs) they may opt to fold them back in to HR. Time will tell.

Jeff Weidner

Robin Gillman said:
If I were to add a 5th prediction, Ken's would be it. My reasoning for this is not only efficiency, but the need to go from stop gap recruiting to more long term workforce planning.

After all is said and done and the playing field is cleared (all the layoffs) and everything settles, companies will be asking questions like: .... This trend , I believe , will cross all industry lines ... with HR having more of a say in how recruitment , by outside firms , is conducted & compensated .

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