The recruitment to recruitment market in Hong Kong and Singapore is notorious for being a candidate-short market. Employers would go head-to-head and compete fiercely to secure great talent. With COVID-19, the market has been flipped on its head. Here’s why:
Decline in revenue and hiring freeze
As early as February, companies across a majority of industries started to freeze hiring. It’s self-explanatory that recruitment agencies were and are at the forefront of the effect this has.
The decline in revenue and worsened financial predictions has shifted focus from growth to retaining current employees and in some situations, survival. Contingency plans started to take effect.
Recruiter cuts
With any potential recession, it’s the junior end that suffers first, especially in recruitment. Junior consultants who need time to become profitable were the first to be cut. This happened between February to March.
Moving into early April, the cuts started to creep into the middle to senior end, where the crisis was still not only on-going, but escalating. Some employees with high salaries are finding it more difficult to win enough business to justify their costs, and understandably so. In some cases where employees are managing and not billing, there has been delayering. This is consistent with a trend over the past few years as more firms aim to become more lean.
The decision to cut is often down to the company. Firms who are lean, cash-rich, with solid contingency plans, have been able to retain and guarantee the safety of their employees’ jobs so far. Other firms who are not as lean may not be able to offer the same security.
Pockets of opportunity and hiring activity
It’s not all doom and gloom. There are a handful of recruitment agencies who are holding up well and willing to pull the trigger on a hire if a plausible business case is made. Some companies are performing in small pockets of opportunity, whilst others are using this time to take advantage of great talent available in the market. These companies make up about 10% of the market.
There are some companies who are not ready to pull the trigger on a hire but will interview candidates so they’re ready for when the market picks up again. These companies make up about 30% of the market.
The remaining 60% of companies are focusing on retaining staff and are not ready to hire or pipeline.
Positives
The recruitment market has been hit hard but there is good news. Hong Kong and Singapore have employed effective containment strategies and with the gradual planned lifting of restrictions, there is light at the end of the tunnel. When cases start to decline on a global scale, recruitment is one of the first industries that will bounce back in full force.
Albeit with a few cuts and bruises, we’ll be back in business!
