Recruiters latest victims of global IT slowdown

The dot-com fallout from the US is claiming another set of victims: recruitment consultants.

The dot-com fallout from the US is claiming another set of victims: recruitment consultants.

It is understood Candle IT&T Recruitment has reduced its 25 Auckland staff by seven, including New Zealand chief Mike Hogg. De Winter International has lost most of its seven staff in recent months, but the company says that this has happened by chance through natural wastage and that it is once again recruiting. Other recruiters confirm a tight economy.

The industry blames the situation on IT firms, particularly overseas-owned corporates, imposing recruitment freezes. Recruiters see little sign of an upturn. Many agencies have also made preferred supplier arrangements with large vendors, offering discounted rates, and these are generating little revenue or losses.

Candle Auckland chief Christine Fitchew won’t talk exact figures apart from saying her office now has 20 staff. Fitchew confirms “very few redundancies”, staff not being replaced and Sydney-based chief executive Geoff Moles now managing New Zealand in place of Hogg.

“Everybody is downsizing. The vendors are downsizing. [But] it’s not downsizing. They are sizing themselves to fit the market,” Fitchew says.

Candle’s predicament is highlighted in Australia, where its share price has dropped from around $A3 last year to around $A1 today.

Hogg told Computerworld his departure was amicable, but declined to confirm redundancy or any payoff. “It was an agreed exit. I did the job I was taken on to do. I will be back,” he says. London-born Hogg plans a family tour of Europe, before returning to New Zealand next February.

De Winter director Michael Green says several staff left his business for “personal reasons” and were not replaced. “We have not deliberately downsized,” he says. Staff numbers went from seven to three, though Green is now seeking a fourth, as De Winter “refocuses” on consultancy. “We are finding we have more work we can shake a stick at. We are working six days a week,” he says.

TMP Worldwide Auckland IT manager Neville Andrews says his agency is still hiring but the industry is suffering “winter blues”.

“The market is consolidating, mid-players are struggling and there is pressure on margins,” he says. Other recruiters, he says, have “got into trouble” with preferred supplier arrangements and are not getting much business from them. TMP, he says, has turned them down, when it realised they offer no profit.

Spherion regional director Grahame Bilby confirms a tight market. “We are battling on. It’s not as easy as it was three months ago,” he says.

Spherion has four consultants in Auckland and five in Wellington, and says one Auckland departure was not replaced. “We haven’t deliberately cut back. New Zealand is being affected by what’s happening overseas. We are affected globally,” he says.

Steve Green of Aacorn says small, director-staffed firms like his are little affected. But managers increasingly look at how to avoid replacing staff instead of replacing them automatically.

Enterprise Recruitment has cut staff numbers from six to five after a graduate recently went overseas. “We are just holding our own. The market isn’t flash. It’s not buoyant. All over there has been a slowdown,” says Barry O’Brien.

However, Lacey Lee advertised for two consultants several weeks ago, claiming its “best months ever” in May and June, and that it was the “fastest growing” recruiter. Last week director John Lacey was apparently so busy he did not return Computerworld’s calls.

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