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In a Jobless Recovery, Where Do Recruiters Find Work?

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In a twist of ironic fate, they have to match themselves with employers.

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There are distinct and interchangeable variables that make ascertaining the general welfare of recruiters -- or getting exact counts of those out of work -- slightly tricky. For one, staffing agencies span all industries -- finance, medicine, retail, advertising, IT, health care, and administrative, to name a few -- so the amount of recruiters actively working in a given area is linked to how well that industry is doing.

Furthermore, because recruiters and agencies hire temporary, contract, seasonal, full-time, and/or part-time workers for clients with different needs, the data is affected by the time of year, the type of recruiter or agency, and the status of the economy.

But the myriad interviews conducted monthly at the Silicon Valley luncheon suggest the recession slammed the recruiting industry hard -- in California and across the country.

Employment agencies – as TempStar Staffing in Pennsylvania points outs -- are often measures of just how bleak (or hopeful) the job situation is at any given time:

For the job market as a whole, employment agencies are the classic canary in a coal mine: That is, the temp market exhibits signs that can show economists what's going to happen in the long term. In the dot-com bust of the early 2000s, the temp industry saw a drastic increase in requests for new workers -- followed by a quick and brutal downturn.

The translation: Employment agencies…did well as the economy began to falter, and firms were reluctant to bring on new permanent hires. Timidity ruled the market, and temps thrived. But after the bulk of the recession hit hard, the need for temps decreased, as many firms didn't even have the budgets for weekly temp services. In the current market, things look a bit grim...


Case in point:

  • Robert Half (RHI) reported third-quarter net income of $9.5 million on revenue of $725.9 million compared with net income of $65.8 million on revenue of $1.2 billion for the same period a year ago.

  • TrueBlue (TBI) reported third-quarter net income of $8.2 million compared with net income of $16.3 million a year ago.

  • Kelly Services (KELYA) reported a third-quarter loss of $28 million, compared with a loss of $14.5 million for the same period a year ago. Revenue totaled $1 billion, down 25%.


The one thing many recruiting-industry experts seem to agree on is this: The end of the recession -- when it arrives -- won't likely be a panacea for the recruitment industry, but it will provide opportunities to those recruiters and staffing agencies that can adapt.

Many innovative and creative agencies, for example, have taken advantage of the unique conditions the current economy has provided and decided to expand their business by improving the quality of their services and by entering new markets -- something individual recruiters are advised to take a cue from when considering their skills.

In a research report for Morningstar, for example, Vishnu Lekraj said "The potency of its job placement business has…allowed Manpower (MAN) to branch out into all aspects of human resources management and position itself as a strategic partner for a host of global and local firms."

Kevin Wheeler, president and founder of Global Learning Resources, Inc, says that companies and industries are changing, with many now looking for sustainable rather than rapid growth.

"To achieve this," he explains, "many more workers will be contractors, consultants, or work as temporaries or part-time." In addition, Wheeler predicts "the average age of the workforce is going to get older as Baby Boomers stay longer and fewer young people seek regular corporate jobs."

And for those recruiters who simply can't find employment right now, experts encourage making it their number-one job to acclimatize to the new environment: learn more about productivity, the labor market, and the new state of the economy.

(See also: Betting on the Temps and Six Ways We're Stifling the Unemployed.)


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No positions in stocks mentioned.

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