Recruiter Magazine: Recruitment Industry & Global Economy

I participated in a piece of research carried out for an article written for Recruiter magazine, so thought I'd comment on the subject here; and the original article can be found online at http://www.recruiter.co.uk/Articles/336422/Selling+out+or+staying+put.html

The article was to discuss the impact of a possible slowdown on the recruitment industry, and what will happen for those trying to sell a recruitment business. My comment which you can kind of see in the article was that recruitment business owners are seldom brilliant at creating value in their own businesses. Too fee own patents, markets, IP, methodology - and too much is dependant on either business coming in or reputation.

What's interesting from the article is that amongst the 4 or 5 of us who were interviewed, whilst there are a couple of related points, we mostly had different views. Some felt a downturn represents an excellent time to sell a business because the fewer buyers on the market are generally seasoned buyers in the recruitment industry. True possibly, but I doubt they'd be buying in a down market unless they thought they could get higher ROI on a reduced purchase price - which basically means; bad time to sell if you're the seller. Certainly credit availability is drying up, and that will impact M&A activity. Whilst my view is that firms should spend more effort on creating barriers to entry, differentiation, focus on specialist sectors or emerging market high growth countries - another participant felt the best way to ride out a downturn was to be a generalist and make sure you have service offerings in temp recruitment, contract, perm and search. Eggs in many baskets.

Personally I think there is worse news to come out of the financial industry than the sub-prime concerns; however I think Europe & Asia will largely do unscathed, and most pain is gpoing to be felt in North America. The Middle East, with a barrel of oil hitting $106 yesterday, has huge excess in liquidity and I cannot see a slow down anytime before 2010.