Australia and the global recruitment industry

I recently returned from overseas, where I met with recruitment industry colleagues from the UK, Ireland, Singapore and Hong Kong. And like the curate’s egg, the global economy is good in parts. It is apparent that European economies are in worse shape than Australia, and Asian economies remain in a better place.

Ireland, just a short time ago the darling economy that drove growth through outsourcing opportunities, is in recession and even public sector spending has been dramatically cut, affecting recruitment companies there.

The UK is in a similar position, with the financial sector in disarray and the flow-on effect impacting other service companies. But like Australia, there are sales in the retail sector, particularly as London gears up for Christmas. When times get tough, it is said that women buy more lipstick!

I spent some time in France and Germany in 2004 and again in 2006 and the highly regulated nature of the temporary hire industry in those two countries, coupled with the fact that permanent placement by employment providers in still in its infancy, means that labour hire companies will be dramatically affected by economic downturn. We have already seen some announcements from the large global companies about downsizing operations in France, and I would expect Germany to be close behind.

There is no doubt, particularly in European countries, that the recruitment industry is in a state of flux – just as it is in Australia. Some organsiations are failing, many are undertaking redundancies and right-sizing activities and have declared decreased revenues and profits.

However taking their cues from Ronald Reagan’s 1986 statement, “if it moves tax it, if it keeps moving regulate it and if it stops moving then subsidise it”, major developed economies have moved to shore up their economies and protect citizens and some industries.

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