Who’s swimming naked?

April 2024

It’s only when the tide goes out that you see who’s swimming naked, said Warren Buffett.

And recruitment firms are often among the first affected by a falling tide. They can be the first to sail ahead when conditions are favourable too, of course.

Navigating all this successfully requires constant vigilance to make the most of the winds and tides.

In business, it’s vital to be alert to the weather that affects you, and to be ready to take advantage. It’s part of what separates management from leadership.This comes to mind after seeing the gloomy numbers from Hays, Michael Page, and Robert Walters in the past few days. Q1 fees fell and confidence is low among clients and candidates.

The market conditions and the underlying reasons should not be a surprise.
•⁠ ⁠The stagnant UK economy and the need for cost controls by clients.
•⁠ ⁠Pre-election stasis. Stubborn inflation - higher today than expected.
•⁠ ⁠Instability caused by the Gaza and Ukraine wars.
•⁠ ⁠Concerns over the impact of AI on jobs.
•⁠ ⁠A post-pandemic structural shift to fewer people in employment or looking for work.
All this will dampen the jobs markets and create headwinds for recruiters, large or small.

I’ve always advised my leadership teams to factor things like this into their strategic thinking. It’s part and parcel of what’s needed for a business to be resilient, and to grow and thrive.
I’d be counselling recruitment firms to look to their strengths in niche markets. To focus on the specialisms and relationships that reap the most consistent results. Play the percentages.
It’s not the time for speculative moves or wild goose chases.
Firms with a clear long-term strategic plan will have a competitive advantage over those without. It’s never too late either to do the planning and adjust.

To return to Warren Buffett, I hope most recruitment businesses have the strategic foresight to ensure they’re well covered up in case the tide goes out too far.