Employment market picks up but caution is the watchword

Jan 13 2010 By Karen Dent, The Journal

THE employment market is picking up pace but there are still very real concerns that the economy may relapse in the first half of this year, according to a North East recruitment company.

Kelburn Recruitment, which has finished a rebranding and taken on two new staff after a difficult 2009, says it is now handling around the same levels of business as it was before the recession.

But the Newcastle firm’s managing director, Kevin Maughan, says it is too early to say whether the economy is completely out of the woods.

"The problem people have with predictions is that there is always the chance of the unexpected," said Mr Maughan. "There are still question marks over how robust the economy is – are there more problems to come? Everybody is very worried about another dip in the second or third quarters."

The level of public sector recruitment is also a concern in the industry. With a general election due this year, there are widespread worries that public jobs may be slashed if a new Government is elected.

However, Mr Maughan said that Kelburn Recruitment, which was started by Doxford Hall Hotel developer, entrepreneur and philanthropist Brian Burnie, is currently experiencing "a lot of positives".

"The market at the moment activity-wise is on a par to prior to the recession. But it is whether that is sustainable," said Mr Maughan, who sits on the board of industry body the Recruitment and Employment Confederation.

Recruitment companies regionally and nationally are now reporting a growth in demand for both temporary and permanent staff.

Mr Maughan said: "Last year, recruitment and employment people pretty much shut up shop. For about six months, there was virtually no significant recruitment. People were downsizing.

"But since around about the summer, people have slowly been bringing more staff in on a gradual basis. There has been five consecutive months’ of increasing numbers of temporary workers."

Kelburn kept its head above water by reducing staff numbers from a high of 22 to the current 15 during the first half of last year.

"We cut costs where we could. In the service sector, your people are your biggest costs," said Mr Maughan.

"We had to downsize our numbers, we cut staff back through natural wastage and we had to make a couple of redundancies. Most of my clients were doing the same thing as well.

"Staff numbers are now the same as they were four years ago. We are keeping a tight rein on costs until we see the recovery is more sustained. We are at a level where we can handle a second dip."

He expects to recruit a couple of extra staff on top of the two already taken on at the turn of the year but he is in no hurry to expand. The company is instead aiming to work smarter by offering more services and received help from Business Link to offer two new online services for clients, including psychometric testing.

Mr Maughan said: "We are building a wider portfolio and offering to keep recruitment costs as low as possible. Clients are looking for clever ways to reduce overall recruitment costs."