Legal Recruitment from Ten-Percent Legal

Monday, November 03, 2008

Credit Crunch Affecting Nine Out of Ten Employers

It has been reported in a survey that 90 percent of employers have said that the credit crunch is affecting their business. The survey by Peninsular Law has found that 74 percent of employers have implemented a recruitment freeze and 64 percent have not ruled out making some of their staff redundant.

Whilst there are no indications of the number of employers surveyed for this report, it is certainly fairly gloomy. The idea of a recruitment freeze is a fairly quick fix option as usually staff wages are the highest cost to a business.

The problem is though that as soon as staff are made redundant, the whole business is threatened, firstly because buyers are aware of the redundancies when they phone up to speak to staff and secondly, when work does come in, the staff that are left find that they have to cope with increased volumes and it has an effect on their productivity as well.

Some of this is certainly a panic on the part of just about everybody with the threat of the words credit crunch, but there are serious concerns in some parts of the economy about the effects of the collapse of banks and the overspread of mortgages to very high risk recipients.

It is a damning indictment on our society that in the good times a lot of companies have not budgeted or allowed for the bad times. The Labour government has been very beneficial over the last ten years and has enjoyed periods of growth and a balanced economy, something that the Conservatives never quite managed in their time in office. This has been to the benefit of a lot of businesses, but now it looks like we may be entering lean times for a while and companies need to start waking up to the fact.

One way to save money is to review all current procedures and contracts and see whether anything can be removed without the company being affected.

Ten Percent Legal Recruitment has removed an out of hours telephone service, for example and instead opted to answer telephones internally through to a certain time and use an answer machine after hours. This has saved us considerable amounts of money in the last two months alone. We have also reviewed our advertising budgets online and offline and because the advertising is attracting candidates when there are fewer jobs, we have reduced these proportionally.

Both of these measures, we hope, will make us leaner in the long term and able to cope effectively with the credit crunch.

Jonathan Fagan is Managing Director of Ten Percent Legal Recruitment. He regularly writes and commentates on the state of the legal recruitment and job market in the UK and offshore. He can be contacted for press comment or advice at cv@ten-percent.co.uk .