Am I going to lose my job?

12 October 2008
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13 October 2008

Does the downturn mean your role is at risk or does it give you a chance to shine? Paul Snell asks recruitment firms how the economic situation is affecting procurement roles and what advice they can give if redundancy looms

The economy is likely to experience an "avalanche of redundancies" in the coming months, according to the Chartered Institute of Personnel and Development (CIPD).

But according to the latest SM Poll, nearly 60 per cent of buyers are not concerned about their job security (News). Recruiters are also urging people not to panic.

According to the latest quarterly labour market survey conducted by the CIPD and KPMG, 27 per cent of firms are planning to make redundancies in the next three months. Although this sounds grim, and is an increase of 5 per cent compared with the previous survey, it is far below the 38 per cent of firms that planned to make cuts last winter.

As a result of increased operating costs that cannot be passed onto consumers or customers, many firms are reducing head counts to offset rises. But the CIPD and KPMG maintain firms are only considering cutting jobs as a last resort.

Some sectors are likely to be hit harder than others. Firms in the financial services sector expect a "significantly bigger reduction" in jobs in the next three months. The CIPD and KPMG also report the likelihood of job cuts is rising in the manufacturing and third sectors.

In recent years recruitment in procurement has been booming. Demand for talented buyers has outstripped supply and skilled purchasers have been able to charge a premium for their abilities. But will procurement's growth become a casualty of a tightening economy?

The response from most recruiters in the profession is a short-term "no", but the future is less certain. Some employment firms have seen limited change in certain sectors, but overall the market remains strong. Julie Harris, head of interim at recruitment consultancy Purcon, says: "We're not seeing any change whatsoever. It may be a bit early to tell, but on both the permanent and interim side there are just as many opportunities."

Julian Ward, consultant at Engage Resourcing, agrees: "The current state of the purchasing market is still buoyant. Rather than seeing actual redundancies, there is certainly more a fear of redundancy."

Others have noticed changes. Christina Langley, managing director of Langley Search and Selection, says a number of financial services firms are closing or downsizing their procurement functions.

But Stephen Fletcher, director at recruitment firm PSD, says while banking is going through a period of consolidation, he has noticed other firms in financial services, such as insurance, are still in "recruitment mode". He adds the retail, FMCG and defence and aerospace sectors remain steady compared with a year ago.

Other recruiters have noticed the hiring process slowing down. As Mark Badley, managing director at recruitment firm Ronin, says: "I have never known such significant uncertainty in eight years, it is slowing down the process." He adds firms are considering the impact of possible mergers and acquisitions - and staff they might get as part of the deal - and far more signatures are now required to get posts approved.

Cheryl D'Cruz-Young, managing director - US at Diversified Search Ray & Berndtson, has also seen an increase in the time it takes to sign roles off as firms consider the current uncertainty, which is frustrating for line managers who need new staff.

On the other hand, most recruiters do not expect to see wide cuts across the profession. "I don't think any company would take procurement out completely," says Badley. Purchasing teams are also perceived to be quite lean, so there are fewer "excess" staff to get rid of.

And it seems for most employers the problem is not getting rid of current staff, but trying to find new talent - especially as purchasing's contribution to the business comes under greater scrutiny. Most recruiters SM spoke to believe buyers are in a good position to demonstrate their worth. "Across the whole market procurement will be one of the best places to be because businesses are desperate for cost-savings," says Harris. "It will drive out the ineffective procurement teams and performers."

Andrew Daley, director at recruitment consultancy Edbury Daley, adds: "There was evidence from the last downturn procurement people could survive if they demonstrated significant savings to the bottom line."

So is the fear of redundancy greater than the reality? Many recruiters report more interest from candidates who are beginning to "hedge their bets". But the expectation is that even if there is an influx of candidates on to the market, demand among employers will remain high. Some report interest from candidates outside the profession, while D'Cruz-Young says firms will be keen for experts from other departments to move to purchasing so as to retain their best people.

In recent years salaries have boomed and although firms will still be willing to pay premiums to hire the best candidates, most recruiters believe there will be a "correction" and different rewards will emerge for the best and worst of the profession.

However, they are more equivocal about the impact the downturn will have on the interim market. Rates in the market have already fallen because of competition (News, 3 July). Some believe there will be more interim work available, as companies reduce permanent head count and make more use of temporary staff to fill the gaps. However, others think as companies begin to put projects on hold, the amount of interim work will dry up. Malcolm Carr, associate director at Hays Purchasing & Supply, adds lots of interim candidates are considering the security of a permanent role.

But good interims needn't worry. "There is always a pool of talented interims who can name their rate and are in demand. New interims need to be flexible on rates," says Harris.

So how can buyers hang onto the job they already have? "It's time to be proactive and look at the value you can add to the business," says Badley.

"Looking at the financial strength of vendors could be a massive issue. And looking at how buyers could help with, for example, payment terms or contingency plans."

"The downturn will sort the wheat from the chaff," Badley continues. "The best candidates can capitalise, not necessarily in terms of salary, but in terms of reputation."


So what advice do recruiters give if you do lose your job?

• Don't panic. Be realistic and flexible about what you look at and resist the urge to jump into the first role you come across. John Mayes, senior manager - procurement at Michael Page, says: "You've go to find a business that suits you and your skill profile".

• Look at your career and your achievements. "A lot of good work is taken for granted. Take a micro-look at yourself and break it down", says Badley.

• Present yourself well. D'Cruz-Young always looks for factual, data-driven resumes: "Really, back it up in terms of substance".

• Draw on relationships with recruitment firms, contacts at other companies, former colleagues, friends and family. Carr says: "Exhaust every opportunity because in 12 months you don't know what the market will look like".

• Think positively. "Good people won't be out of work for long", says Badley


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