The market for senior managers and directors has been markedly depressed during the first six months of 2009, so when is it going to get better? The mainstream media has recently offered contrary interpretations of the UK’s economic health; some claim to be seeing the much hoped-for green shoots, others predicting that we have some way to go before recovery begins.
Executive recruitment tends be an early indicator of economic decline, tapering off as the economy weakens, but it is also often slow to respond to an upturn, as caution prevails.
The response of many companies to this recession has been interesting - and rather different from last time around. Business leaders have clearly recognised that wholesale redundancies at senior level can prevent companies from managing effectively through a downturn and leave businesses very weak when the upturn comes.
Chief Executives and their HR Directors are trying hard to retain their senior management assets; this in itself is encouraging, as it marks an appreciation of the costs of replacing executive talent and the perils of having key posts unfilled at critical times.
Stuart Spindler sums up the reaction as, “We don’t want to lose our good people, but we are not confident enough to hire new ones, so batten down the hatches.”
Many companies are keeping a tight lid on recruiting new people, with a very strong emphasis on making the best of what they have got. The team at Spindler has heard of many instances where senior vacancies have been filled by an internal transfer, perhaps with some reallocation of responsibilities within the existing management team.
Stuart comments, ”In some cases these internal transfers are the lesser of two evils, with people not necessarily well suited to roles and being cajoled to take them, knowing that the only other option is redundancy. Sometimes these transfers work better than might be expected, but other times there is definitely a case of ‘forcing a round peg into a square hole’ – which is not a long term solution!”
Autumn will be interesting and could well see the blocks coming off in some areas. By October, the UK’s executives will have lived with the credit crunch fallout for a year. We can confidently predict that while trading conditions will not have returned to the heady days of 2007/8, smart managers will recognise that there is some stability, albeit at a lower level.
Most importantly, the more ambitious companies will be looking at the opportunities that are created by the new conditions, be they weakness of competitors, changing buyer behaviour or public investment in infrastructure, to name but a few. They will realise that operating in survival mode is not the best recipe for late 2009 and early 2010 and open up to the possibility of hiring new people.
They may also be recognising the shortcomings of some of the ‘square pegs’ referred to above - and start to redeploy and replace. In conclusion, Stuart says, ”Over the years, September to November has normally been one of the periods of high activity in executive recruitment, as companies gear up for the new calendar year. Autumn this year could just mark the turning point in demand for executives and the beginning of a return to a healthier executive jobs market.”
