Madison [Recruitment Sector]
Personal service put Madison at fore
by Graeme Kennedy [NBR]
Madison Recruitment is thriving and seeking opportunities for expansion through acquisition as many rivals struggle or go out of business in the economic downturn.
Directors Wynnis Armour and Marisa Fong are not surprised that daily listings with online job search service Seek have halved to 10,000 while applicants for each position had surged from 20 to 200.
“Companies are not hiring as many permanent staff since the recession began,” Ms Fong said, “although in the current conditions contracted and temp work is increasing.
“Businesses have naturally become cautious in taking on fixed head counts with their associated costs so while a lot of people are looking for permanent jobs there are more candidates for fewer positions.”
Ms Armour and Ms Fong said their Auckland-based company had been recession-proofed over its 10 years of operation through a strategy of personal service and long-term Preferred Supplier Agreements with equally strong clients.
“The retail — non-PSA — recruitment firms have been most affected,” Ms Fong said. “They didn’t consider the agreements but we took them on from day one to give us strength.”
Ms Armour said in five years of “extraordinary” growth Madison successfully sought central and local government work to diversify the business in a move intended to spread risk if the market turned down. She said the company now had around 50 government and commercial PSAs including 10 of its original major clients.
Madison topped the recruitment sector in The National Business Review’s monthly Exciting Companies series with a 73.7 rating in surveys conducted by strategic business consultancy New River. It was followed by Metro Recruitment on 58.5, KP Solutions 52.9, industry organisation ITCRA (the industry training organlsation) 52.7, Alpha Recruitment 52.5 and Salt 50.1.
Ms Armour and Ms Fong started Madison after leaving an Auckland-based multi-national recruiter unhappy with some issues affecting the local market.
“Their understanding of recruiting came from a North American boardroom,” Ms Armour said. “New Zealand didn’t matter at all. And the glob als tend to ha e a lot of client chum, which is frustrating as you need time to understand their culture and needs.
“We built Madison on personal service and our knowledge of the market — we have the global capability but the passion of a boutique and becoming partners and friends, with clients through PSAs is our point of difference.
“There is something very satisfying about visiting a client-company and knowing every second person.”
Madison, the country’s biggest New Zealand-owned recruitment firm with six offices and 65 staff, has a consultancy and specialist delivery teams including legal, financial, insurance, IT and sales and marketing.
Winner of Seek’s best New Zealand company award for the past two years, it has a database with 210,000 names of potential candidates for jobs ranging from secretarial to top executives.
Ms Armour said recruitment firms offered an independent service selecting people who would fit an employer’s culture and requirements — “It is very much a diagnostic process,” she said.
Ms Fong said the industry was the first to feel the effects of economic downturns and recoveries.
“We are at the coal-face,” she said,” and there are small signs of an upturn now with more temps and growth at our provincial offices,” she said. “Auckland, the hardest hit in terms of business confidence, will probably follow them.
“We are optimists but commercially very real and believe the market will be a different story by the end of the year.”
TOUGHING IT OUT
The economic downturn is hitting the recruitment sector hard with firms reporting 50-80% reductions in their business as client companies stop taking on fulltime workers.
Research by strategic business consultancy New River indicates that while a small number of recruiters describes trading as stable, others are being shut down, merging or cutting staff.
Business conditions were rated either difficult or very difficult by 71% of survey respondents while 29% were neutral.
“This indicates a general downturn in recruitment with declines in most areas,” New River said, “and no significant growth segments in the market.
“Companies in many cases have reduced staff or intend to, others have put hiring freezes in place and turnover is down with staff less willing to move as job security is currently low.
“The effect on recruitment firms is falling client spend and a decline in market size — one top executive said there was a big drop in the permanent market worldwide.”
New River said the situation had changed from employers having a shortage of skilled people to a flood of candidate applications for a heavily reduced number of vacancies.
“One risk several respondents mentioned was that the quality of recruitment services might fall under the pressure of the downturn,” the consultancy said. “This was seen as a difficulty although it could be an opportunity to lift ethical and quality standards for the future.”
Business conditions
Respondents’ rating of current business conditions in the RECRUITMENT Sector
Very buoyant =0%
Buoyant =0%
Neutral =29%
Difficult =33%
Very difficult =38%
Top nine RECRUITMENT firms
Rank / Company/ Excitement rating
1 Madison 73.7
2 Metro Recruitment 58.5
3 KP Solutions 52.9
4 ITCRA 52.7
5 Alpha REcruitment 52.5
6 Salt 50.1
7 Alignment 49.0
8 TradeMe (recruitment) 48.4
9 QJumpers 43.0