Greg,

Your blog is the first recruitment blog that I have subscribed to and I think its great. As a 20 year recruitment veteran I have seen 2 major recessions and if there is one thing that common to both its the fact that the recovery (when it happens) happens very quickly.

Recently I read found Geoff Morgan and Andrew Bank’s book “Flourish & Prosper” in the library and decided to read it. In it they give an account of the 1991 recession. You will remember that at the time they bought back Morgan & Banks from the Select Group for $1 million (having sold it to the group 18 months before for $16 million). When they bought back the company Australia was in the depths of the “recession we had to have” – thanks Paul – and no one knew when it was all going to end. Geoff and Andrew said in their book that the recovery happened just 10 weeks – yes that’s right – 10 weeks after they bought back the company.

Last year I met some executives of Hudson who had worked with the company Morgan & Banks and stayed through to the TMP days and Hudson days, said the recession and coming out of it was the time that many companies (particularly Morgan & Banks) grew sharply. Why? Because many competitors were forced out of the market or over retrenched and so there were less players in the market place to fill the roles that were needed to be filled. And lets not forget that most of those early recession breaking roles were contract or temp roles with employers dipping their toes gently in the water not quite ready to hire permanent staff.

My concerns about the reaction of many recruitment companies to the recession are that they seem not to have learned the lessons of previous recessions and made the same mistakes again. Here at HJB we have gone to a 9 day fortnight and reduced staff’s salaries by 10%. This sounds great from a cost reduction perspective but you should see our Melbourne and Sydney offices -there are always people on RDOs. It means we are not in front of our clients enough, it reduces morale (not substantially – but enough) and we start to believe that this will never end. So that’s a major danger, believing the medicine (reduction in wages and salaries) will fix the problem with the company and the recession, it simply won’t. But getting out and seeing our clients and remaining close to them will, because when the upswing happens, it’ll happen big time and quickly.

Its also time for the Greg Savage’s (smile) and Deb Wilson’s, Andrew Banks’s etc to start talking to the press about the good stuff, planting the ideas about using contractors and temps in times of a recession or recovery to help get things moving.

I would be interested to hear your thoughts?

Thanks again for your blog – fascinating reading

Kind regards,

Richard

Richard Elstone
Manager
Accounting & Technology – Incorporating IT Resources Group
Hamilton James & Bruce