Employment firms hope tough times are nearing an end
A dozen years ago Paul Drummer thought starting an employment agency in Washington would be a sure-fire success. In that city where ''words and paper prevail,'' he thought a steady stream of clients would beat a path to his door.
But now Mr. Drummer, owner of Old Dominion Personnel Service in suburban Arlington, Va., is not so sure. ''We've had an extremely tough year,'' he says, and his words are echoed by personnel consultants from New York to San Francisco.
''In today's economy, where business is off and cash flow is down, businesses are tightening their belts,'' says Ward Thomas, manager of Edwards Employment Service in Philadelphia. ''Now companies aren't always looking to replace employees who leave. Sometimes they try to spread the work out over several other employees, or try to fill the position on their own, thereby saving the agency's fee. Our service is one of the first to be affected when the economy is bad,'' he adds.
Employment agencies all across the country give similar reports. Because so many people are unemployed or insecure in their present jobs, these agencies are being inundated with resumes and calls from people seeking work. But because of this corporate belt tightening, they are having less success placing people.
Despite the problem this presents, ''employment agencies are in a better position than they were in the recession of 1974-75,'' asserts David Strachan, executive vice-president of the National Association of Personnel Consultants. Since that time many personnel agencies have made the effort to specialize - to serve those job markets that are still hiring strongly. Because 80 percent of the nation's employment agencies receive commissions directly from the hiring company, they have had to adapt to the changing market.
One agency in Philadelphia that specializes in jobs in data processing finds its market holding steady. Similarly, jobs in industrial sales, marketing, finance, electrical-based services, and health care are hiring well in many regions. In some instances, personnel consultants say they are having problems finding well-qualified applicants to fill these positions.
Ironically, demand for executives in these industries has fallen off, in some cases substantially.
''Traditionally, senior management is most immune to the negative effects of recession, but this recession is proving to be somewhat different,'' says Alan Towers, spokesman for the Association of Executive Recruiting Consultants (AERC).
Executive recruiters work under contract to fill companies' executive-level job openings and are paid whether or not they are successful. Statistics show that assignments filled by AERC members declined by 24 percent over the last year. Demand for general managers fell 44 percent, and even the need for chief executive officers was down 9 percent.
Companies with job openings are finding that this is a buyer's market. Margo Berk-Levine, president of Margo Berk Personnel in New York City, finds that businesses are taking much more time to fill open positions. ''A prospective employee used to be called in for one or two interviews. Now he may be called in three or four times, and in some cases as many as seven times,'' she says.
''Companies will not staff up again. They will tend to run as lean as possible while remaining productive,'' she adds. Employers are looking for the most qualified applicants, and are waiting to hire until they find exactly the person who meets their needs.
For this reason, it's become easier to place older workers. Firms realize experience and productivity go hand in hand.
Ms. Berk-Levine feels the challenges affecting her business portend some fundamental changes in the US business structure. ''Employee productivity is the big thing,'' she says. ''There has got to be a change of attitude (on the part of workers). Job seekers must be better trained and willing to work harder. Also they may have to accept less.''
She says attitudes are changing already - perhaps grudgingly, but in the long run worker productivity should rise.
In the meantime, personnel consultants remain surprisingly optimistic. They're doing everything possible to be more effective. In one Washington agency , several consultants have taken college courses in various technical fields to relate better to the needs of specialized businesses. And employment agencies are seeking better rapport with companies' personnel departments.
Several agencies surveyed reported a recent upturn in their activity. The past few weeks have been more promising than the first six months of this year. Some attributed this to ''working harder than ever.'' Others hoped that a better economic scene was around the corner. Still others felt that businesses, previously hesitant to fill positions, were finally finding it necessary to add personnel. Personnel consultants hope this recent trend continues. How the demand for executives has fallen off by industry Industry Net decline: 1st half '81/1st half '82 Government 6% Commercial banking 6% Media and communications 14% Insurance and diversified financial 27% Education 29% Electronics, high technology, telecommunications 32% Automotive and related 42% Utilities 42% Energy and petroleum related industry 50% Aerospace and aircraft 52% Source: Association of Executive Recruiting Consultants Inc.