The global economy has slowed. In Singapore, GDP growth for Q1 2023 was 0.1%, which was less than the predicted growth rate of 0.6%. When comparing Q1 22 and Q1 23 growth, GDP growth has actually contracted by 0.7%.
What does this mean for recruitment?
Reduced job flow across multiple desks
We’re not in a recession, neither are most countries around the globe but what the economic growth does mean on a macro scale is that companies are hiring less.
This is having an impact on various recruitment desks. Which desks are performing well and which are struggling?
Technology has taken a major dip. The Crypto hiring wave between 2020 – 2022 has changed from a rapidly expanding industry into a slower slump between mid 2022 to early 2023. This has been exaggerated specifically for Singapore with the movement of jobs and investment from Asia to Dubai.
The early-stage startup and VC-backed space has slowed significantly as well. Most recruiters have diversified away from this sector to focus on more traditional industries such as larger MNCs including Retail, FMCG, even Education to fill Tech roles.
Banking & Financial Services in Singapore is still going relatively well, but the same desk in Hong Kong has been affected by roles moving regionally from Hong Kong to Singapore. Despite a slowdown in job flow in both locations, Singapore is benefitting from the movement of business. This has been prevalent not just recently, but for the past 4 years just before Covid-19.
Healthcare & Life Sciences, Legal as well as Insurance are still performing well, as the two industries are known to be ‘recession-proof’ – the services will still be needed despite the average consumer spending less. For Legal, as there are huge amounts of movements across certain industries like Tech, it does create more Legal dispute amongst companies, hence more work for Private Practice firms.
EGS & Sustainability has been a new area of focus for most agencies with companies such as NextWave, Michael Page and more investing into growing these desks.
Consumer, Industrial, Supply Chain, Sales & Marketing, Accounting & Finance and more are performing relatively well in the market.
Mixed performance by different agencies
With the major shifts in hiring trends over the past year, we’re seeing mixed performance from agencies in the same desk areas.
For example, in Tech, there are some agencies, mainly boutiques, who are still performing exceptionally well and hitting good numbers. They’re not quite as high as last year, perhaps 5 – 15% behind budget, but still very well considering the environment they’re operating in.
Other agencies with desks in the same markets, mainly global players, are struggling to hit budget and numbers within the same desks.
One of the major reasons for this is because of the hiring strategies agencies employed last year. We saw many agencies scale up significantly, hiring huge numbers of graduates into the industry and training from scratch.
This was an understandable approach when the market was performing well, as there were so many jobs that most agencies could not possibly deliver. It’s not possible to hire so many recruiters with experience to meet the demand, so agencies hired graduates and trained them up instead.
When economic growth slowed, the junior – mid level struggled heavily because they lacked skills in both account management and business development, as this was not a focus of training last year.
Agencies who went down this route are still struggling to manage the imbalance of skill set in their companies today. We’re seeing agencies who are very bottom heavy at the junior end, as natural attrition at mid to senior level is still happening. These are quite stressful environments to work in currently.
Agencies who didn’t go down this route are the ones who are performing well today across the business as a whole. They have a good balance of skills in the firms with more of a balance in seniority.
Demand for fully-fledged 360 recruiters
With the above considered, the Rec2Rec market is still very busy. There is certainly a slow down from last year, but most agencies are still hiring. They are however focussing on recruiters who are fully-fledged 360 with strong account management and business development skills.
Recruiters who are 360 individual contributors and billing above SGD 300 – 400k per year are in a decent position to move. Recruiters who are billing more than 400k are in a good position to move. Recruiters who are billing more than 500k are always in demand and will never struggle to find a role. In fact, they’ll be fighting the agencies off!
Recruiters who are billing between 200 – 300k may struggle as the agency may not want to take a risk with the cautious outlook in the market. It’s not a performance that is considered to be under par, but it does indicate that this person may not have enough clients or business to bring over, to hit the ground running and become profitable quickly for the agency.
There is a reduced demand for non-billing managers. These roles are typically only in large agencies where they are managing very large teams over say over 15.
Most agencies this year are going down an approach where all recruiters, if you’re a manager or not, are billing. Billings will certainly be reduced when you move into management and there is no doubt about that, but those managers would still be expected to contribute. All hands on deck!
Caution across both candidates and clients
Naturally with a slowed economy, both sides will be more cautious when moving which does create slightly less movements in the market.
Candidates want to ensure that the agency they’re moving to is stable and profitable so they have enough time to become profitable themselves. They also want to be certain that they’re working with an experienced manager who will be able to mentor them.
Agencies want to ensure that the investment they make in a new hire now is less risky, meaning that if they’re hiring someone, ideally it will be into a market they have experience in. If not, that candidate should have a very solid track record of business they can develop in the new agency.
As a result of this, there are lots of interviews happening between candidates and clients, but a higher rejection rate from both sides throughout the process.
Signs of positivity
More often, candidates are sharing positive updates with us on a daily basis, sharing that their market is picking up and business is going well.
As shared in this article, there are certain agencies who have built structure to enable them to perform exceptionally well, even in a tough economy. In our client base, we work with a sizeable group of clients very closely who are in this bracket.
The market is active, and in fact, at the time of writing this article, we have over 80 live active roles we’re working on (all of them are specific gaps shared by clients where they’re looking to hire).
If you’re open to finding out where these roles are, please feel free to connect with me on LinkedIn for a confidential chat.
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