'Under Recruitment' - The new Vogue or just Age Prejudice?

I am an older member of the UK workforce so I can comment with some experience on a thorny matter.

If I had a pound for every time I have heard the phrase, 'You are over qualified (or too experienced) for a job' I would not be having to apply for jobs again.

It isn't necessarily a money thing although I am sure that plays a part. What is very surprising in all this is that most companies in the UK now have Human Resources or Capital Departments or even Talent Management rather than good old Personnel Managers. These new names are to show just how seriously companies take the quest for the best people.

Then the oddest of things occur. The self same companies tell candidates that they are too experienced or over qualified for jobs. That seems to argue straight in the face of the quest for the best talent for specific roles. It often means that 'Headhunters' who comb LinkedIn each day contact skilled people only to see them turned away. It incentivises such recruiters to pick candidates who are not 'too experienced' or possibly not over a certain age.

Now it could be that recruiting managers fear hiring people who may be as skilled or more so than themselves. If so, then the company has a problem as such managers suppress the potential for new generations of equally or better skilled people coming into the company.

Or perhaps it is good old age prejudice coming into play in a fairly unsubtle way. Maybe 'Too experienced' or 'Over qualified' are the new euphemisms for wanting people between 25 and 35, the old-style 'golden age' for employees. I wonder what the average age of Google or Microsoft new starters is but that is not to suggest they are doing anything wrong - it's just an esoteric question. The internet age is very geared toward to young, tech-savvy who rate their reputations on the number of likes they get on their Facebook page.

Whatever it is, I have had many debates with companies I work with about hiring talent versus warm bodies. In the strife to become the best in your particular market, it pays to over recruit not under recruit, in my book.

Recruiters, HC/HR/Talent Management and hiring managers have roles to play here but mostly it is a scene set by CEOs and Directors. If you want the best, don't kid yourself when you recruit.

New Year, New Job

According to research from US 'Retention Firm', Finnegan McKenzie, this is the traditional time of year when firms ramp up their recruitment.

It's a bit of a 'No sh*t, Sherlock' moment as lots of firms have year ends in December and so new budgets are agreed for the new year starting in January - on both sides of the Atlantic. However, 2010 is not just any year. For the UK this will be the first quarter, hopefully, of growth since we lurched into recession and so firms are still very tentative about investment plans and unemployment tends to lag the recessionary quarters. So it may not be the bonanza of new opportunities for career change that traditionally happens this time of year.

From the candidate's viewpoint, it is also a time when many people will be looking for a new job. According to Finnegan McKenzie's research this is very prevalent in senior management. They claim up to 51% of senior executives in the US will have actively put out their CV with the intent of changing job or perhaps to test the water by 1 January. This may be as a result of new year resolutions, a desire to increase year on year money, or just a stark evaluation of the previous year and a realisation that the job was not fulfilling or they did not like their boss. Whatever, I think many people in the UK would identify with this 'New Year, New Job' enthusiasm.

In a good year, this would be 'fish in a barrel' for recruiters. Fresh new CVs from highly paid and experienced senior executives to match to a plethora of new opportunities would be the time for a feeding frenzy of fees. I think that will not be the case this year - recruiters are still down on their luck and many are still suffering as the volume of openings are not rising very fast. Still, it has to be a period of hope.

I would argue though, that this is the point where many companies investing in growth make big mistakes. Because the recruiters match the fresh CVs to openings, corners are cut. Only that 51% of senior executives are moving and they are actively after a job - easy prey for recruiters and, I would argue, not the cream of the crop. In fact, I would wager that if Finnegan McKenzie drilled down on their research, then of the 51% of senior executives that put out their CVs at the beginning of a new year, there would be many of the same names as last year. I even wonder how many are people who actually moved jobs last year and want change again?

I always strongly argue, it is those who are not looking for jobs, who are delivering year after year in roles, who are the ones worth chasing. There is a band of senior executives and senior salespeople who are perennial job-hoppers who have great looking CVs but have delivered little sustainable difference to the companies they have been employed by. You can bet that their names will be known in the industry as that is their real skill, networking. I have been involved in the computer industry for many years and time and again the same names crop up. The daft thing is that many companies will mobilise themselves at the mere mention that one of those names are 'available' and they will be snapped up via clever recruiters masked as 'headhunters' who claim they have 'enticed' that name to move. Easy money.

It's a time to be wary. The growth that will be gained this year will come at a heavy price and will not be for the fainthearted. For many of us who have lived through recessions, there will be a period when firms may 'shoot their bolt' and try to get growth too early. This is a period of cagey moves and it also a time for reassessment of old markets and discovery of new as many firms will have learnt in the last two years that much of their business was tied up in too few companies at too low a price and exposed how little differentiation they have. Recruiters themselves have found that particularly revealing over the last 12 months in particular.

The good news is that many computer distributors are bragging of a very strong close to the year and this is a good barometer as technology will almost certainly lead the way in private sector growth. The consumer end was reasonably strong, accounting for good growth and part of that will be spurred by the VAT change, it is thought. But there was also brisk business in the banking sector.

This month sees the end of the first quarter for computer giant HP, December marked the year end of many large firms, notably Cisco. The first signs are there that technology sales are on the road to recovery and that will mean a general return to growth will follow. However, watch out for the 'Usual Suspect' CVs. There will be a mass exodus from firms at senior level - though be very wary that this year it will be for different reasons and the usual bragging rights associated with senior executives will not be there after a recession. Most will be leaving because they have been found out rather than before they have been found out. Recessions tend to do that.

Again, good luck in 2010 - growth may just be round the corner. I hope you find your fair share.

The Recruitment Industry Is Broken

Recently, on announcing sharply decreased profits, the CEO of high end recruiter, Heidrick & Struggles (H&S), L. Kevin Kelly, dourly warned that the recruitment industry's 55 year old business model was broken.

Citing the growth in DIY recruiting tools now available to firms and the waves of online search facilities at companies like LinkedIn, there is no doubt that there is a huge squeeze at the mid-market and low end. Finding candidates is no longer hard and the best value recruiters can be is an external sifting resource on generally available candidate information rather than having CV repositories as in the past. It certainly means that the age-old James Caan mantra of 30% of the first year remuneration as a fee per hired candidate is no longer a viable structure in this market and, as the recession bites, companies have not only reined back on recruiting activities but are now shopping around a great deal more.

It was inevitable really - recruiting in its regular form has had a good run for the money and the money has been exceptionally good. Even at the high end where H&S headhunt highly remunerated Board positions the market is also experiencing an erosion of fees as web based matchmaking services come onto the market to compete at much lower prices. H&S is a super, debt free and cash rich company and can survive but it now sees its future in a radically changed market model. In the past, search has yielded around 90% of its fees - in the future it will shrink to only 50% while 40% will be taken up by executive retention and coaching services, another 10% on tools to support this. For this to change, H&S is actively seeking acquisitions with its $183m cash war chest.

That sounds fine for companies like H&S but for smaller players, heavily exposed to the contingency recruiting market, this is impractical. Few have the cash resources to acquire such services and skills while many are still clinging desperately to an increasingly valueless model. There is no way companies will pay 15-30% of first year remuneration for a few clicks of a mouse and a first interview at best. Few recruiters have 'skin in the game' like performance linked fees and few come from the industry they are recruiting into, let alone have done the roles of the people they are identifying as talent.

Value is the key to the future for recruiters or volume, and the latter means more streamlined, web based service. Clients in the industry haven't helped the process with many driving the value out of recruiting by hammering on fees to the extent of running web based reverse auctions for volume placements. The whole recruiting industry is being squeezed from both ends in a market in recession. With the credit crunch to boot, it has been the 'Perfect Storm' and many recruiters who have suffered badly may never regain the lost ground as the market must change to deliver greater value to clients.

Companies like H&S are moving in the right direction when it comes to their high end market. But for mid to low end salary ranged specialists, life will get ever tougher as they are at most risk by the low cost, high volume models from the web. Even James Caan's golden touch has tarnished as his latest investment has struggled badly and only the agents in the City have done well recently.

There is a desperate need for a daring change in the business proposition and model in the recruitment industry that needs to resonate with clients and deliver real value. The days of large contingency fees for a few hours work are long over. Who will deliver the new model? Will clients respond?

The next year is crucial to the recruitment industry.

Unemployment Of A Different Kind

Last month we were told that unemployment reached 2.4m and many now speculate that it will peak some time in 2010 at around 3m or more. There are some who believe that these figures do not tell the whole story and that the real unemployed figure is as high as 6m.

Certainly, I know of a whole raft of people who do not register and so do not figure in these numbers. Many are former executives in sales, marketing and general management as well as senior sales and marketing people, who have been left by the wayside of mainstream employment. Many, if not most, have created their own limited companies or sole trading units to ply their trade as contractors, ‘guns for hire’ or interims – mostly working on short term engagements and projects with specific end points or goals to be achieved. In reality, this is what I do. You can dress it up in fancy language, have a few ‘smoke and mirrors’ but my ‘new’ career is being hired by companies to do specific jobs on a short term basis which are 100% results orientated.

In these recessionary times, there are good benefits for companies to get access at short notice to a pool of highly experienced general skills which are flexible, adaptable and highly geared to results on a short or long term basis. There are no onerous employment laws to encounter, no long term selection processes, no costly recruitment fees and the remuneration can be easily geared to results – you pay as you go, you can ‘try before you buy’ and you pay for what you get. Equally, you can end the arrangement as and when you please without fear of costly grievance procedures or compromise agreements. On the face of it, this is very flexible for companies to put the power where it is required, when it is required, without incrementing headcount or taking on long term liabilities or paying more in terms of benefits like pension contributions or private health.

For me, it has certainly been an exciting time these last 3-4 years. It took a while to get going and there was a gap in between contracts in the middle but I have managed to make a decent living out of it and I have had the satisfaction of working with a diverse set of companies, focusing on delivering on a variety of goals and have has given me the buzz of really achieving.

Take Theorem Inc (www.theoreminc.net), as an example. They are a dynamic digital marketing outsourcing company with an innovative model that had worked well for clients like Google and Digitus in the US. The CEO, Jay Kulkarni, wanted to launch his business in the UK and Europe and I worked with him to help set up that bridgehead and find highly talented people. They now have a London office serving Europe and are expanding off the back of new contracts wins in the UK and the Continent with some excellent, high profile new clients. Jay is very buoyant about the future and the partnership with me and this week we will be discussing potential ideas to expand the business through channels in Continental Europe. I am currently working with the UK manufacturer of Interactive Whiteboard solutions, Promethean Ltd (www.prometheanworld.com), and have helped them target and acquire new strategic partnerships in Europe which has directly contributed to their Southern European team having the largest quarter in their history and added more than €3m of new business in two partnerships alone in just around 16 weeks. That’s the sort of contract that really gets the adrenalin going. The last 5 weeks has seen a new relationship with anti-virus vendor, AVG (www.avg.com), get off to a great start also with 6 new major partnership potentials across Europe.

But it isn’t all rosy. One of the issues always is finding the next such client and I find that it means you burn the candle at both ends as once you have finished your day’s work with a current client you have to start work on prospecting for a new one. It means that my wife and I have not had a holiday for over two years – that’s par for the course. I find sleeping at night is not as easy as it is a constant worry as to where the next pound of revenue is coming from. My plight is the same for all those others who work the same way as I do. When we finish one contract and have a gap for the next, we do not register as unemployed – if the others are like me, I would be too proud for that and would rather pilfer my dwindling savings than become one of Gordon’s growing army, but in reality there are far more people who need the support of those payments than I do and I would rather people who really need it get access to the support than people in my position.

Would I change it? I am honestly not sure. In a way, the daily challenges are so variable and the things I can apply myself to so wide and interesting that I find the work far more stimulating than plain old employment. But I do miss several things. Camaraderie is one – I work mainly from home, on the road and am a worker of the digital age. There is an awful lot of international travel which can wear thin after a while because I get more crotchety about delays and not being able to be productive as every second counts in this kind of contractual work. If you are not delivering, you are of no use – and the old adage of ‘You are only as good as your last sale’ in this business simply does not translate – it is all about the here and now, and results.

My peace of mind and security says it would be great to be employed and have a straightforward package with all the trimmings and protection of the law. After all, I am now, like many of this growing band of flexible, contractual workers, closing in on 50 too fast for my own comfort. I know, no matter what the law says each day I am not employed as an employee going forward is likely to be another reason never to be employed directly again. As much as I would love that such prejudice does not exist against ‘more experienced’ individuals, it is the way of the world.

Some studies have shown that there are now two categories of ‘employed’ people – 1) those in full time employment as defined by the laws of employment and 2) contractors similar to me. The studies show that as time goes on, there will be greater difficulties and less protection for my types, while those currently full time employed will be effectively ‘there for life’. Also, if you are of a certain age and outside the full time employed zone, it less likely that you will ever get back in. Personally, I do have a sneaking feeling that talent will distill out in the end. If the recession has taught us one thing it is that you cannot rely on donkeys in your business and the focus on quality recruitment will come to the fore after successive years of commoditising one of the most important functions of any business – but is something I have bleated on about to companies for some time, even before the recession.

I have a suspicion also that as the markets bottom out and starts to show signs of recovery, a fast, experienced, adaptable and results-orientated workforce will be in greater demand, as it gives greater chance of ‘hitting the deck running’. I also think that companies will not easily forget the employment mistakes they have made in the past and start to think sensibly about the kinds of people they need and focus more stringently on higher quality recruitment processes rather than just getting volume and the lowest price. As always, the key priority will be skills shortages as the markets recover – we have heard it before so many times – with so many more people on the dole queue but not many possessing the kinds of skills companies require in the right geography.

This is where the growing pool of experienced, former executives can pay rich dividends. Over the past years, if there is one thing that this pool of readily available talent has proven time and again is that it can adapt to many different tasks and deliver by applying proven qualities and managerial experience. Direct technical or product or even market knowledge is of less importance if you have experienced the key problems companies have faced, applied you skills in a variety of situations and delivered for clients.

It’s why that, even though I am a born worrier, I know that I have been through a whole variety of situations including two major recessions, tremendous growth, started up several businesses and turned around an equal number across a wide variety of technologies, markets, geographies and disciplines, having managed teams and companies large and small and just myself. These are qualities, skills, values, disciplines and principles that many companies will be interested in the coming months. I still may not be able to take my holiday or sleep easy at night but at least I am confident that what I have will be in great demand.

I think a great many more in my situation should be equally as confident about the future.

The Power of The Negative

Whilst sitting in the bath, I noticed two pieces of reading material we have side by side on the window sill are, '1,000 Places To See Before You Die' and Richard Wilson's 'Can't Be Arsed'. Essentially Wilson's book is a parody of the theme of the one next to it and is a torrid but funny series of reasons why not to do exciting things or see certain places before you expire. It struck me as odd that such a negative series of thoughts could be turned to profit.

It reminds me of the situation we are in right now in some ways. We are in the heart of a recession and every way we turn there is negative information, news, thoughts and people - it's enough to drive us to despair and sometimes it certainly makes me feel down. Strangely, it as at such times I get more creative, am able to channel more energy into things and get better results. Maybe that's what Richard Wilson (not of 'One foot in the grave' fame) used to be successful with his book - I don't know.

Thinking about the subject further, one of our most useful inventions uses the principle of creating negative energy - I am talking of the refrigerator. Sometimes negatives can be powerful sources for positive thoughts and energy - call it desperation, call it 'when all else fails', it doesn't matter, I like to think of it as inspiration.

Inspired By Negatives

If you want to hear one of the most inspiring talks, then sift through the Harvard Review online and find JK Rowling's address to the Graduation Ceremony last year. She talks to some of the most gifted and un-desperate people on earth to tell them how she found inspiration in her darkest hours. When she was virtually penniless, a single mum, and having lost her job she was as big a failure as she could be. What she talks of was how, at that lowest ebb, she was able to throw off all the inconsequential things in her life that had no bearing on her position and focus only on what was important - her child, her home and a big, big idea.

From this lowest point, Harry Potter was crafted, having already had the idea some time earlier, and it became the focus of all her energy, turning negative energy into an incredible, powerful positive.

I have also read some articles from a chap called Richard Fenton whose mantra is 'Go For No!' in sales and he advocates that you should up your failure rate in sales. His perverse logic is that you need to fail regularly to be successful in sales. I can understand the gist of what he means as the more you fail, the more your desire to succeed should compensate - but that is not common to all people in sales or business. Sometimes failure drags them down.

At this point, the recession looks very negative. Wishful thinking people who have not heeded warnings have literally Hit The Wall and gone from having a successful business one minute to abject failure the next - simply because they had not failed enough in the past to sense it careering up into their faces. When it strikes, they simply abdicate all responsibility to cost cutters and pretend that it is the only way forward - in fact, they have already ruined their business by that point.

So the point of my article today is how negatives can be turned into positives - and how to take the recession by the horns and turn it to your advantage making it something from which to survive and, indeed, to thrive.

Hitting The Wall

When companies Hit The Wall, as I call it, they actually find that, in a very short cycle, just about all of their key business indicators have turned negative on them. I used the example of Norwich Union/Aviva lately who consumed a £multi-million budget to advertise that they were changing their name - yet, with some of the adverts still running, they have reported heavy losses, seen 33% wiped off their share value and shedded 1,900 jobs. They ran straight into a recession while spending more money on advertising in a single period than a good share of the combined sum of the salaries of the staff they have just made redundant.

That's what I mean - it is the idea that one minute the garden is rosy, sales are buoyant, the forecast looks good and you believe that you have a recession-proof business as everyone needs things like insurance. Suddenly, you are in the depths of despair and the only way out is to hand the business across to professional numbers-people and hack the heart out of the business.

For small and medium sized (SMEs) businesses, this can be far more damaging. Too many SME firms have either a one-track business or have too many eggs in too few baskets. When the recession arrives it can be like an absolute bomb going off, literally wrecking the business overnight. I know a recruitment firm that in one quarter went from record sales to 50% drop and had to shed 50% of its workforce. They are not alone, even the mighty Dragon's Den hero, James Caan, has a latest venture which is suffering while Michael Page has seen its worth drop dramatically from the point at which it turned down a bid from a would-be suitor.

Recessions pay no respect to egos or reputations - they can ruin anyone.

Turning Negatives Into Positives

The most common issues faced by firms right now is dwindling order books and low or negative cashflows. The answer in most cases is to dramatically cut costs and try to eek out longer terms with suppliers while voraciously collecting cash. These are the answers from the numbers-people and they make sense. However, it would help if sales went up and cashflow became more positive - but that's the point of a recession, they go the opposite way.

Too often in the recession, the above action is the limit of the thinking. Batten down the hatches until the market gets more buoyant. The sales-driven executives have handed the reins to the finance guys and that's that. When the negatives get too much, too many executives are happy to 'walk away' from their pulpit of success, hand over the power to finance and snipe from their background position about the company's long term prospects.

It's a pity they don't mobilise that negative energy into a powerful force for the positive - if nothing else, the negative attitude will rub off on staff and things tend to spiral from that point.

Here's a thought. If cash is tight and sales are low - how can you find more sales that bring in cash quicker? The first step is to ensure you know enough about your current sales to make an intelligent decision. The decision needs to be about the product or service you want to sell, what its value proposition to the customer is, who would be interested and how you are going to get that message to enough people in a short time to make it successful.

The heart of the decision is to make an attractive incentive for cash payment for the proposition, but the most crucial part is the value proposition - it has to resonate with the customers you choose. Messaging is vitally important here and everyone in the organisation must be word-perfect on the message and spot on in execution.

Very often, the answers to tough questions can lie right in front of you - only the negative thoughts stop you from seeing them. If you have a product or service that is valuable, then make sure the value is realisable fast and compelling - then make sure you know who would be interested, why and make sure you get in front of as many of them as possible, with as many of their objections thought of as you can, and as fast as you can.

A recession will kill those companies who stand still - mobilise your thoughts and people with cohesive messages and actions to turn negatives into positives.

Blue Ocean Thinking

It is always a surprise to hear that many successful companies started during a recession. Dave Hewlett and Bill Packard (HP) started their business in a garage in 1939 building a device used by the Disney Corp. on the film Fantasia - it was not what you would call ideal conditions for a start up. Cisco claims to have started in a recession, as did Facebook. The key to success in a recession is to find a part of the market where there is less turbulence from competitors or is simply an unaddressed need.

In the teeth of this recession, car sales in the US and the UK have dropped dramatically and there is a real risk that many car makers will either not survive or not exist in the same way as before. While sales plummeted 30% in the UK over last year in the peak selling month of March, in Germany they rose by 40% and in France by 10%. In these countries, in conjunction with the Government, a scrappage incentive was offered direct to consumers and backed by a vigorous sales and marketing campaign by the vendors and their dealer networks. The results were spectacular while in the UK we are still considering what to do.

The fact is, there are an awful lot of old cars out there, the dealer network has switched to secondhand selling and the car makers are in too much trouble to see what to do. By the time we do something, it will be too late.

What has happened is that while most car models have dropped in sales, small cars have bucked the trend by selling up 80% on last year - the Ford Fiesta leading the sales charge for the fourth successive month. Here is the plan for the future right in front of people's faces - swap production skills and tooling into making more smaller cars with ultra high fuel economy or new eco fuels and cut mid and high end cars to a minimum and charge a huge premium for them. It is the ideal time for better, more environmentally sound, vehicles to be made and a chance to shape the industry for the future. By using the scrappage incentives in a targeted way, swap out the oldest cars for the new small ones now.

It calls for a concerted line of thought and actions - we have the chance to build a new, better car industry from the ashes of the old, and the opportunity is right here and now.

Blue Ocean Thinking is all about re-invention and in a recession there is no time like the present. The recruitment industry has been cruising for a bruising for some time. In the sustained boom, it grew fat on high fees, low value for money and has spawned a new, valueless level of service on the internet. Recruiters have been very hard hit as companies have cut back on headcount and not replaced those who leave voluntarily. For my example firm, with too few large customers, the effect has been crippling. Correspondingly, large companies have devalued the recruitment process, outsourced it to foreign shores and introduced reverse auctions for placement - how on earth can companies get good people in a recession by using such a valueless selection process? Now is the time to re-invent the whole industry.

I have long held the belief that recruiters should share the pain for poor recruitment. I believe there should be performance related incentives for recruiters so that fees are lower up front and are earned over time according to the success of the recruit and their clients, and I am not talking stock options here. Instead of having salespeople in the recruiters, have professionals who have recruited and managed the kinds of people they are trying to recruit for clients. It will bring back the value in the industry, reduce the costs due to bad recruitment, create more value for recruiting clients and, long term, more profit for recruiters.

The firm that breaks the mould today and offers this kind of model will take the high ground - I know, I have already worked it with clients like Theorem Inc of the USA, and we are both better off for it.

Channeling The Negative Energy

JK Rowling created the most successful series of books in modern times which have also produced a string of fabulous films and merchandising - so becoming incredibly wealthy in a matter of just 10 years. The whole concept was built out of failure and despair. Sometimes you have to fail to realise what its like to really succeed and certainly success tastes that much more sweeter after a failure.

Rowling's message is simple - when you are at the lowest point, you can shed all of the things which are not important and focus only on the things that mean most. It means you can channel all your energy on the things that will bring you most success - by having that single-mindedness you can increase your creativity and make something far more powerful than you could ever do if all you have is success. For many firms, the recession will mean a re-focus on something new or an innovative change to their norm.

If there is one message out of all of this, it is to prioritise. Sit down, think what is important and, quite literally, forget all that is unimportant so that all energy, investment and skills can be applied only to what is important. Don't do an Aviva - now is not the time to blow a lot of money on nice-to-haves. Make sure every penny brings a return.

Make the recession work for you.

Fighting Recession - Increasing Margins

Revenue is vanity, profit is sanity. Or something like that - that's the old business adage which was recently regurgitated by Duncan Ballantyne in his top tips on surviving a recession.

Well whoever said it is right. There used to be a massive emphasis on revenue in the IT industry in particular with the theory that big was beautiful and that every new piece of revenue could be served by only a marginal increase in cost. In the Internet boom this was the mantra - get revenue, profit will come later.

Of course, we are all older and wiser now and we have realised that there is such a thing as bad business. Even in times of low interest rates, taking revenue at low margin puts a strain on the business. Increasing the margin on as many transactions as possible is a huge priority as it can help you survive.

So here are few thoughts on the subject:

1) Purchase smartly

If your business relies on buying in and reselling goods, then now is the time to go back to suppliers and negotiate hard - getting a few extra percentage points which can either be retained or shared with customers is vital to the bottom line. If the products are available from multiple sources, shop around or start to spread your buying according to the deals on offer. In the IT business, Distributors are always making offers or bundles, make sure you have access to all the information in a timely fashion to take advantage.

Ask Distributors what stock they have which has aged more than 3 months - often this is still viable and they will be in the process of writing the value down or willing to take offers. Make sure you have access to such information.

Compare prices and barter. Everyone is vying for your money and remember that. If month or quarter end is coming up, much bigger discounts will be on offer and sometimes extra credit - make sure you are wise to timing your major purchases to get the best deals.

Look for rebates if they are offered for loyalty which can be taken to the bottom line.

2) Keep stock levels down

Even though the cost of money is lower, having stock on your shelves is using up credit lines and bank loans - you need to have as much cash available to you as quickly as you can to be nimble and ready to take advantage. If you have already used up a credit line and need stock to fulfill an order, there can be nothing more frustrating. Most Distributors and Vendors are far more efficient at delivering so make sure you profile your stock down, decrease stock of slow moving goods and focus on the fast moving ones but decrease your holding anyway.

Sales may go down in this period and so stock days may rise very quickly - profile your stock everyday and take actions immediately and regularly as each day the stock does not move is another opportunity missed.

3) Think about Sales Commissions

In recessionary times sales are harder and can decrease to go under target. At this point assumptions on sales costs will come under pressure. Think about how you can be creative with commissions to accelerate reward for going over target and penalise for failing to meet certain thresholds.

4) Delivery and Logistics

The cost of delivering can be a big underlying cost if it is not fully passed on and a warehouse space unused is a drain on finances. Get creative - shop around for delivery methods, think about the number, weight and dimensions of shipments and profile what suppliers are offering. Think about consolidating shipments to big customers or lengthening delivery cycles to decrease small shipment consignments which can be more costly.

If you have spare warehouse capacity, think about how you can attract other local companies or vendors who might need to bond their stock and charge a nominal amount which can be used to offset.

Even look at outsourcing logistics and warehousing - there are tons of firms that do this that can offer greater capacity through peaks and troughs while you pay for only what you consume.

5) Marketing

Everyone tries to decrease marketing spend in times of recession which can become self defeating, so try to innovate and spend more wisely. The web now offers fantastic opportunities to drive more sales with relatively low cost marketing which can be analysed far more easily and comprehensively. Think about getting contractors or outsourcers involved who can help manage your marketing and take away the burden of peaks and troughs by not having to directly employ people.

6) Use the Web

The web is often a far more efficient and a lower cost method of transacting business by using ecommerce. There are some fantastic, simple methods to add ecommerce to your website and link it to an online catalogue which can rapidly move sales away from manual input to automated which can provide scope for efficiencies and cost savings. Many IT companies now have significant portions of their business online so reducing the need for order processing staff.

7) Use Contract Sales

Apart from gross margin, Sales and General Administration costs can be a large portion of cost of sale. Look to operate lean and mean and put the power where and where you need to - contract sales can help do this by paying relatively small retainers and high commission - you only really pay on results.

8) Focus on People

People are the biggest asset anytime but during a recession they are more valuable because they can help. By communicating early and fully, polling for ideas and inputs, your staff can become part of the solution. Look to get buy in for higher productivity, maybe deferred pay rises or less bonuses in the short term and the promise of higher later. Get them to audit each of their departments and think of low cost incentive ideas to motivate teams to identify cost savings and make them realisable.

9) Rebudget

Most SME companies budget once every 3 months maximum, and many just once a year. In a recession, the moment you sniff trouble, get onto the planning tools and reassess costs. Make sure that major investment decisions are reviewed thoroughly and staff recruitment is held over or delayed so that only the essential are taken on. If people leave, think long and hard about delaying replacement hires until you can see better conditions.

10) Recruitment Costs

Oh I could blog for days on recruitment costs - so many firms think they are just a cost line while others think you can pay peanuts and get good people. The fact is, the cost of bad recruitment is a huge drain on profits and while the figures look good nobody worries - in a recession it can kill.

First, review your suppliers and cut out companies that do not deliver. Second look at companies that are providing a Value Proposition that is realisable in actual monetary benefits - they need to be taking the burden of recruiting off your manager's shoulders while providing quality candidates at a fair price.

Negotiate performance related fees where possible - make sure these companies have 'skin in the game' by earning their fees when salespeople have stayed beyond a certain point or better still performed to a minimum standard. Don't accept clawbacks as they are hard to implement, deny the money up front. If they baulk, offer exclusive rights to certain recruitment in return.

It will soon sort out the wheat from the chaff, increase quality of recruitment, decrease time consumed in recruiting and give a focus on the ROI.

11) Currency Fluctuations

Many companies may purchase in foreign currencies and sell in pounds, vice versa or various combinations of currencies. It is an ever increasing risk to the cost line and is getting more complex. It is a hard pill to swallow, but it may be better to bite the bullet and trade in as few currencies as possible during a recession to decrease the liabilities. You may lose on one side but gain on the other and some times it is not easy to tell - keeping it simple helps you understand more. Talk to your bank about foreign currency accounts or buying currency ahead to hedge if you make lots of sales or purchases in foreign currencies.

12) Keep Assessing The Market

Many competitors will struggle in a recession as most customers will be reviewing costs and making harder purchasing decisions. Be prepared to move quickly when competitors stumble and take advantage. Make speculative offers to customers you do not deal with to test the water and be prepared to honour the deals. Look for parts of the market where competitors are having a good run and making money, very often such deals will be lock-ins at higher prices but with clauses for 'world class pricing' or 'benchmarking' - again make unsolicited offers; you have all to gain and little to lose.

13) Keep Reviewing

Don't stop once you have assessed your markets and margins, keep looking to make incremental savings and increases to margins whenever possible. Check all your customers are being charged the right price, you can never tell when mistakes are being made.

14) Work Hard

Once again, recessions are not for the lazy. Mobilisation of resources are key and slackers should be identified and properly dealt with. Don't tolerate inactivity and lethargy, it will hold back the good guys.

15) Innovate

Selling the same old items in the same old way may not be as appealing to customers in tougher times, particularly if they can easily be bought elsewhere. Now is the time to get creative and innovate - try to look at how a product can be 're-presented', 'repackaged' or 'presented as a specific solution' for recessionary times. You may want to make special services available designed to beat the recession like free audits or assessments or special finance options or bundles. Now is the time to position yourself to be more attractive in the recession and that requires a little thought.

16) Reviewing Sales Expenses

The odd breakfast under subsistence is neither here nor there but when salespeople travel unnecessarily or make the wrong choice over train or car, travel Business or First Class when Economy would be adequate, stay overnight when not necessary or use too higher class hotel, the costs soon mount up. Petrol costs are variable and if you pay mileage make sure you reflect current prices. Use audio, video and webconferencing where possible instead of face to face internal meetings and cut down on internal freebies like extended sales meetings. It isn't rocket science.

These ideas are not meant to be exhaustive but a stimulus for thought on how to increase margins without resort to vast costcutting measures - keep innovative and keep assessing, there are always opportunities to be a bit smarter.

Think, Act, Review - The Art of Executing Plans

In a business meeting today, the person I met described me as 'Cerebral' in my approach to business. For those who actually know me in business, social settings and in my family, they would laugh aloud at the description.

Applying some cerebral power to the comment I could understand the person's train of thought. I had described how I go about executing, and how I believe in thinking something through, devising my plan or strategy, and then rigorously executing on it, with a final step in the process of reviewing the results before adjusting and continuing to execute. It's a tried and tested process but in the heat of a sales battle, often rapid action is preferred as any perceived dalliance is itself deemed as indecisive.

Planning - The Vital Key To Success

In the last few years it has been a feature of business to drive business through a series of short term actions, often with short term goals in mind. Monthly targets are a key driver for this and we all know these are essential in business but they can lead to poor habits. However, as we suffer a deep recession, many of the exponents of short term actions have been the first to hand their organisations over to 'cost cutting' or 'restructuring experts' because they simply ran out of ideas for the next actions. One minute the garden looked rosy, the next it went to pot.

I have blogged about planning for a recession. Many people have said that I was talking a recession up and bringing it on myself, while others have commented that a lack of a positive approach leads you away from the opportunities. The latter may be true but as a person, although I may not always show it, I am a naturally worrier. I am always thinking about where my next sale will come from and making a success of the projects I am involved with.

When I plan for myself, I plan first for survival and then next for the upside.

I may not be the world's greatest at grabbing success by the horns but I have a better understanding of how things can fail and so avoid them more effectively. In this recession, my business has gone up and I would reassure myself that it was because I worried early about how I would survive so that I put into place a plan of actions that not only has so far got me through the recession but has actually help me to do better than I expected.

I still worry each night before I switch off the light, but at least I am thinking ahead to my next day in business.

The Power of Thought

To constantly think about something and do nothing, is a plan that rarely succeeds. To just do things without thought, is a fool's game - it will end in disaster. To think and then do, is the basis for success.

I advise people, when making decisions about their next actions, to think what they want to achieve in terms of strategy and sales 3 or even 5 years down the line, because your decisions today are likely to have a profound effect on that. I worked for John Weatherhead at Frontline who always said that what you do tomorrow morning will either make you or lose you millions - because it is the effect of your decision a year or so down the line that will be an outcome of your next action. That always made me think about things rather than just jumping in and doing them.

So if you do nothing for one day, it costs you the value of a day's sales a year or more later because you pushed it away by another day.

Similarly, if you make a decision today which has only a short term effect and buys you a problem a year down the line, then you have lost the value of the future sales.

Very often, Channel sales plans of emerging companies go exactly that way. Short term goals buy long term legacy problems that hinder sales at crucial inflexion points when graphs should be shooting upwards. You may be left with a small, boutique Distributor when you need one with financial and logistical muscle to take advantage of the market a short way down the line.

Thinking that little bit more should not cost time - it is a logical process that should focus on what you need to achieve and what the path to that success looks like and with a clear view on what can impact that success positively or negatively on the way.

It's not cerebral, it isn't rocket science, but experience does help.

I would contend that the Credit Crunch is the result of short term profit focus by banks who lost sight of the 'cause and effect' of their actions. Anyone looking in from the outside could see it was a stupid strategy which had simple flaws and many single points of stress or failure which would bring the whole thing down but short term profit has a terrible lure. When coupled with a flawed earnings scheme there can only be one outcome - total disaster. The issue has been that the solutions have been executed with the vision of restoring the status quo when any fool would know that you have to sort out the fundamental flaw first, restructure the system and ensure that banks focus on their core skills of supplying capital and credit instead of making money out of nothing.

Planning Through a Recession

Many of the bullish, sales-orientated CEOs who have handed their companies to accountants to sort out the mess, are those who have weak planning skills and the inability to think ahead properly or at least more than just when the graphs all point upwards. Recessions, if faced up to and planned for properly, can be times when new opportunities arise which fundamentally change companies and give them new, sustainable profit opportunities. For those who do not change, they can indeed get caught out.

Warren Buffett famously describes it as being caught with no trunks on when the tide goes out - i.e. a lack of strategy. Many retail businesses have collapsed because of this as they relied solely on the amount of money in people's pockets being large enough so that their products would be bought by the law of statistics rather than product differentiation. For many businesses in business to business sales, it has been the failure to strengthen and prove their Value Proposition which has caused problems. It is a dumb assumption to make that a business is either recession proof or customers always need your products. In recessions, everything changes and no assumption is always right.

Recruiters are one of the most vulnerable businesses right now. Open vacancies have slumped to a low while unemployment has risen to 2million and is expected to reach 3million by the end of next year. Even Dragon's Den heroes have their mettle tested in such environments and I have heard rumours that one of James Caan's proteges is suffering, as are the mighty Michael Page and many others. Yet companies like Intramezzo are actually innovating by focusing on where there is investment. They are looking at emerging businesses and ideas and matching experienced entrepreneurs with new money as VCs actually have plenty of it for new ideas but don't want to pump more into current businesses. It's that kind of clever thinking that will seed a new business opportunity for long after the recession and it came about through planning on how to make money in a recession.

Old Adages Die Hard in Recessions

'Half a plan, badly executed tomorrow, is better then doing nothing at all'. Tell that to the brainiacs rescuing the economy. Thinking does not take a long time but can save an awful lot of failure and money if done in conjunction with the proper devising and execution of a plan. Nothing beats a good plan, well executed - and it is always worth waiting for.

If that's cerebral, then call me Einstein. I think it's just learning from bitter experience and comes with age.

Fighting The Recession - Increasing Power without Headcount

Being lean, mean, flexible and adaptable are all admirable qualities to have during a recession - but how can you achieve it on limited resources and headcount?

One of the problems of any business in tough times is that the market, and how to service it, is a moving target. Putting resources where they are required and when become crucial decisions to take advantage of opportunities or even shoring up existing business.

How can you be both adaptable and resourceful without an increase headcount?

Professional For Hire

There has never been a bigger pool of available, experienced, skilled and very willing sales and marketing people who are willing to contract and deliver results.

It is commonplace to hire in or outsource skills to do specific jobs whether that be temping at administration or finance, outsourcing payroll or accounting, IT, project work, cleaning, Management Information, web management, Telecoms or other functions. But it has never been vogue to hire in sales or marketing people to do specific jobs or for specific campaigns or projects.

But markets are changing. I have had the privilege to work with innovative skills companies like Theorem (www.theoreminc.net) who help companies who do digital online marketing to flex and scale their organisations on demand by having a vast pool of multi-skilled resource available.

The trick is to put the power where you need it and when you need - and pay for what you need.

The Issues

In tougher times, headcount is a heavy load. Further, flexing it is not easy. For every new head you need to make a leap of faith in terms of the role to fulfill even though the market may change rapidly or the opportunity is transient. There are associated recruitment costs, management time consumed in the selection process, potential guarantees of commissions for significant periods, employer taxes and then the potential back end costs if the individual does not perform or perhaps the opportunity passes by and you have to scale back. The responsibilities in law are rightly onerous and each new headcount is a heavy cost and responsibility. For small to medium sized companies, each new headcount or backfill is a considerable risk.

And what if the market changes and the resource you have just punted on is not actually what you need? Suppose you take on a Field salesperson and in 6 months you actually need a Telesalesperson instead? The cost of change is huge plus the time lag in the process for due procedure.

The concept of Professionals For Hire is having access to a significant pool of experienced people with a variety of skills and seniority to fit your requirements - as and when you need them.

Imagine having such resources available at short notice, pre-vetted for experience, skills and suitability, and willing to work on daily, weekly, monthly or specific duration projects and assignments. Not Interims but flexible professionals for specific tasks.

Advantages

• 'Pay As You Go' - only pay for as much resource as you need when you need it in a flexible way.
• Multi-skill availability - Have access to a wide variety of skills to pick which you need for specific tasks and when.
• 'Pay For Results' - It is easier to gear payment to success as these resources are far more orientated to reward for success.
• Mitigate costly guarantees and get access to highly motivated, results-orientated people who have everything to prove and much to lose.
• Mitigate onerous employee related costs such as tax, holiday pay, sick pay etc. Professionals For Hire are independent business people measured only on the time they work and the results they deliver.
• Decrease management time - these professionals are given specific tasks and require less management.
• Mitigate recruitment costs - screening has been done in advance and there is no cost for recruiting just time consumed in post.
• Decrease recruitment time - Professionals For Hire are available at short notice, it's their profession.
• Put the Power where it's needed and when. If you require Telesales first followed by Field Sales visits, get access to two specifically skilled and costed professionals to maximise results rather than hiring one person and trying to fit square pegs in round holes.
• Only use the resource you need for as long as needed - why hold onto resource beyond their period of worth? Conserve cash and costs by applying resource when you need it for the specific duration of the requirement only.
• Make your workforce more adaptable, flexible and powerful without all the associated employment costs.
• Be able to scale up your organisation quickly and efficiently to take advantage of market opportunities without the normal time lags.
• Be able to scale back your organisation when times are not so good without onerous employment responsibilities and costs.
• Put the Power exactly WHERE you need it - if your requirement is in Scotland or Germany and not the UK, have the ability to not only access resource quickly and easily when you need it but where you need it.
• Get market experience and knowhow fast and easily - Professionals For Hire gives access to a wide range of skills and market knowledge.
• 'Try Before You Buy' - one of the great advantages of having flexible, hired resource is that you can evaluate their skills and suitability at first hand and in the job. When you are ready to make the investment with better knowledge of the market opportunity, you will have 'field-tested' potential candidates

Beat The Recession And Be Ready For The Upswing

The economic news is not good with Mervyn King telling us the obvious and worse today. Many businesses are 'Hitting The Wall' and having seen their markets collapse in a matter of weeks not months. Think ahead to how you can conserve cash, cut costs but be able to pick off the opportunities in the market when they arise by scaling your organisation up and down as you need to. Be ready for the upswing which will come as we emerge at the other side and scale up to meet the new opportunities, faster and more efficiently than your competitors. Above all, make sure you take this recession in your stride rather than Hit The Wall and struggle, making hard decisions too late and after the worst of it.

Professionals For Hire is a reality. Call me for more details on +44 (0)207 193 2356.

US Emerging Hi Tech Firms - Is now the time to invest in International Expansion to the UK?

'Sterling slumps to lowest in 16 years,' was yesterday's Business headline in one UK broadsheet as the value of the pound against the dollar plunged to just $1.7863. A far cry from the heady $2.00 to the pound experienced not so very long ago.

Lower Value Sterling Presents Opportunities

Over the last year or so, emerging US Hi Tech firms have shown a distinct ambivalence to investing in expanding into the UK and Europe markets as the value of pound and Euro have made the spending power of the dollar weaker. In my own survey of US Hi Tech firms in the last year, I have found that CEOs of emerging US Hi Tech companies concerned at all levels about the cost of entry into Europe. All costs are escalated from recruitment, salaries, fuel, overheads, office rentals - everything appears expensive plus there is the psychological problem that particularly UK salaries expressed in dollars may actually exceed those of the executives hiring them - a mental blocker if ever there was one.

Now sterling has swung the other way. Partly, it is because the OECD (Organisation for Economic Co-operation and Development) believes that the UK is already in recession though strictly speaking growth has ground to a halt in the last quarter not yet receded according the the Treasury, but also the OECD was concerned about the UK's pledge of £600m to bail out the housing market. It has been housing, with over 160% growth in the average price of a UK house, that has pretty much fuelled the boom in the UK in the last 10 years as house-owners leverage equity for cheap money to fuel the spending boom.

The interesting prospect for emerging US Hi Tech firms is that now Europe is looking much better value as the currencies move downward and the UK in particular is offering some unique opportunities to act as the launch platform for European Expansion.

Market Conditions

A recent survey by the KPMG and the Recruitment & Employment Confederation showed that the number of permanent jobs available has fallen at the sharpest rate since late 2001.

• There will be a richer pool of executives and staff to chose from in the UK due to the slowdown of the UK economy
• The average salaries of these people will be more affordable as the dollar gains strength against sterling

As the property market cools rapidly (average house prices in the UK fell over 10% in the last 12 months and analysts suggest a further fall of 18% or more is likely before the market bottoms out), so too will the average office space rental and lease costs ease. There is already an abundance of available office and warehouse space in the UK and as the economy slows or even goes into recession, the costs of office set up and rentals will fall also.

• Available, high quality office space is widely available in major, attractive city locations throughout the UK and prices are coming down
• Again the growing strength of the dollar to sterling will increase the effect

Some Great Examples

As the economy cools in the UK, businesses will be looking to save costs. This can be achieved in many different ways but companies offering innovative solutions in identifying significant revenue reclamation such as in Revenue Assurance or Billings Integrity will have a significant advantage, particularly if the solution is innovatively priced and easily deployable, making the benefits accessible faster - one way to get growth in a shrinking market is to identify what you are not billing today; it's simply lost money reclaimed. Telecom companies, insurance companies, the NHS - all are companies who miss opportunities to bill all their customers for all services consumed.

Companies with high productivity advantages such as eCollaboration which can dramatically reduce the need to travel, the cost of which has soured in Europe as fuel costs rise, will have a distinct advantage. Companies offering ways to consolidate compliance and governance for financial and safety regulations will look to use to tools to mitigate cost exposure in terms of insurance, fines and accidental costs.

• Teleonto - A Revenue Assurance Solution aimed at Telecom providers and carriers of all categories which is Saas based, with no upfront costs or capital spend, helps fast identify all forms of revenue leakage and provides immediate and rich ROI
• ActionBase - a clever Action Tracking solution which is tightly integrated with Microsoft Office helps companies translate (and track) paper based processes into Human Activity and have full audit trails for compliance and governance. The solution is gaining much traction in the Oil & Gas sector but also in Finance, Manufacturing and Telecoms increasing management efficiency but up to 30% and decreasing compliance issues such as HSE, SOX or FSA regulations.

Corporations will be looking to re-budget and re-plan as the markets change and they make sure they have anticipated growing costs and potential less revenue. Those who plan ahead will adapt easier, faster and not be surprised by 'holes' appearing in their forecasts. Companies looking to consolidate spend on services like IT, Telecoms and recruitment will look to innovative suppliers who can quickly identify and realise savings. Once again, outsourcers look like good value.

• Intelligentcomms - an independent platform and consultancy specialises in helping companies identify and save costs across their entire Telecom spend, without a tie to any Telecom vendor to get impartial advice with a risk/reward method of payment to ensure fast win-win
• Adaptive Planning - an innovative SaaS based platform which is easily deployable that can help organisations streamline budgeting and planning to ensure companies plan more frequently and deeper to anticipate changing market conditions and adapt quicker
• Workday - a new SaaS based HR Management solution from the people behind PeopleSoft has already attracted the largest ever SaaS software order at Flextronics.
• Taleo - another innovative SaaS based in-house recruitment management system that helps smooth the process of managing recruitment and contractors

Those companies who look to drive growth through other methods like the internet can take advantage by rapidly expanding their online activities by outsourcing their Ad and Media Operations to companies who have deep market expertise and scalability enabling fast market traction and negating the need to hire staff or expensive contractors for peak requirements only.

• Theorem Inc - is rapidly expanding its footprint in the UK and provides outsourced Ad and Media Operations to companies wishing to take advantage of market expansion via the internet without having to hire staff for peak periods only, providing an ongoing partnership for scalability

Outsourcing is again back on the agenda - as costs are of a concern and staff levels, companies are again looking to leverage clever offshore companies who are experts in BPO, application management, consolidating enterprise applications and data and customising applications.

• Ephlux - is one a new generation of sub-continent based companies who are driving savings to companies by off-loading critical back office processes, applications and data
• Accexperts - is a China-based outsourcing company expert in Finance and Accounting with deep technology experience and expertise in all aspects of accounting and financial governance across a wide range of markets

Now is The Time to Act

So if you are an emerging US Hi Tech firm and you have an innovative solution that can help companies mitigate costs or realise extra profits fast, then now is a great time to enter the European Market and specifically via the UK. There is a rich experience in the sales, marketing and technical workforce, costs are more affordable and the timing is just right. Calx Europe is the experts in the field in helping manage your expansion in Europe and driving sales.

For more information on any of the companies mentioned above or on how to enter the UK and European Market to expand, please drop us a line at info@calxeurope.com or call on +44 (0)207 193 2356.

New Employee Background Checks - Good Practice or Breach of Privacy?

'Criminal records on sale for just £37', was the headline on Page 7 of this week's Sunday Times.

The article referred to the growing practice by employers and corporate investigators (numbering 50 between them so far)buying access to files at the Criminal Records Bureau (CRB) to do background checks on new employees. The CRB was set up 6 years ago to carry out checks on prospective employees whose work would bring them into contact with children and vulnerable adults - i.e. to find out if the prospective employee was unsuitable for that kind of work.

However, certain recruiters and employers are now getting access to CRB files to check the background of employees who are applying for jobs which do not involve access to children or vulnerable adults.

These agencies are now offering these unlawful checks to cover potential business partners and staff ranging from clerical staff to web designers.

Is Enhanced Disclosure Good Practice or Unlawful Prying?

One firm mentioned in the article offered to carry out 'Enhanced Background Checks' of administrative staff for companies claiming they were justified, caveatting this with the employee's consent should be sought although the firm's director admitted that they had not 'thoroughly checked' whether such permissions were given.

Another firm specialising in the same practice operated out of Essex but was headquartered in New Zealand claiming its Essex office was 'registered' with the CRB to have access to such records, although it confirmed it was not 'accredited' by the CRB.

The question may be arising - is this such a bad thing? After all, it is very important to follow up references given by employees rigorously and I would always recommend employers do this diligently and, if possible, cross reference the information. In this I mean, if possible, test whether a claim in a candidate's CV is spurious or not such as attending Chairman's Club or winning a specific deal etc when asking the referee. Of course, the referee may exercise the right of no reply which should not be taken as a denial but most referees will usually corroborate true facts.

So would getting access to the CRB files be further good practice or diligence? To give an example of the downside, the article claims that one such background check found that a complaint made to the information commissioner revealed a CRB check on an individual had shown the person had stolen a packet of meat worth 99p in 1984 when the person was just 16.

Where Does The Law Stand?

The article cites the landmark case of a gardener who was fired from their job after an 'Enhanced Background Check' had revealed two spent offences. He claims the checks were unlawful and unwarranted. The information commissioner has supported his claim which goes to court seeking compensation.

The CRB helpline was found to aggravate the situation as when one complainant called the person was told it would be prudent to comply to have the check done or face not being employed.

The fact is that the law is cloudy rather than clear. Such checks are specifically designed to stop sex offenders having jobs which involve children or vulnerable adults. If there is no suggestion of either being involved, then such checks are not justified.

What Ifs?

So if an employer suggested that a gardener may come into contact with children whilst carrying out their duties, would that be justified even they 'stretched the truth'? And what if a sales manager were to be in contact with unmarried young ladies, would that be justified on the grounds that the employer might want to know if the prospective manager had a history of sex offences, and in doing such checks just happened to find out the person's misdemeanour 20 years ago involving persistent apple scrumping?

What the report did reveal is that detailed financial checks can be made for as little as £20, police files for about £40, driving for £20 and identity at around £20.

Where Do You Stand On This?

As a person making decisions on behalf of a company that will cost significant money in terms of recruiting fees, compensation but also opportunity cost for making a wrong decision would it not be good, if not, even best practice to do as thorough as possible background check to minimise risk?

I remember a famous incident of a quasi-government Agency (Note how vague I am being) who employed a Finance Director with apparent impeccable credentials and background. He subsequently allegedly hired a hotel room to 'interview candidates in bikinis' for the post of Assistant. The person subsequently flew to Chicago via Concorde to New York, checked into an expensive hotel and found that his meeting had not been confirmed and so flew back again. It was later revealed the person was bogus.

Closer to home, when I worked at a computer reseller, we employed a Scottish salesman who shared a name with a rather famous Spaceship Captain. He was larger than life in many respects including the fact it was not his real name and he had no fixed abode - we only found out when police popped by asking questions about him for various other reasons. There was also the recent case of the chap who passed himself off as a Forensic Scientist for many years and participated in many trials as an expert witness only to find he was just the local lad from a pub.

The fact of the matter is that employers should be able to mitigate risk as much as possible and protect themselves from potential 'rotten employees'. However, you have to also to temper this with the fact that a minor misdemeanour involving alcohol and some clumsily broken glasses in an Indian restaurant 23 years ago really was just a one off piece of high jinks that should have been settled with a cheque for a few quid, a dustpan and brush.

Information in the 'Information Era'

We do live in an era of unprecedented amounts of stored data. Much of this can be more easily accessible than we think even if we use the most sophisticated firewalls as more and more data is actively lawfully and not sold by agencies holding the data or even lost by daft employees getting their laptops or memory sticks stolen or even archive agencies flogging their old PCs on eBay. Our information is freely surrendered to all and sundry and can be accessed far too easily. And the embarrassing misdemeanours of the past can be more easily brought to light.

But is it fair for your employer to know you might have had a telly repossessed 15 years ago when times were hard or that you served a driving ban 10 years ago even though you don't have a company car in the job? Or is it sound information to have at hand when deciding on candidates to know one was arrested outside the House of Commons in a gay Rights march and the other was not?

I would be really be interested to hear your views.

Crisis? What Crisis?

It is not quite the same parallel to the famous period in the 70s when the then Labour Prime Minister went on holiday as the country literally disintegrated around him with rubbish piling high and uncollected in the streets and blackouts started in the evening as energy strikes bit. However, I can't help raising an eyebrow when people insist we are in a 'Credit Crunch' or 'Economic Slowdown' and not a recession.

What does 'Economic Slowdown' mean?

The technical definitions by economists are a few quarters of successive lack of growth and recession is the same but with negative growth. That's a pretty simple definition but of course to the average person in the street, we see the signs of such monsters a little earlier.

Inflation is the first thing to hit us. I struggle with Government definitions but I only have to look at petrol prices, the average weekly shop and energy prices (it now costs me over £1,800 per year to power and heat my home - a semi-detached 4 bedder) to know that inflation is rising. House prices are coming down and the market is stagnating - I know people who have had their property on the market for over a year, yet it was the sort of house that would have sold very quickly before that.

And then there is business.

How are you feeling the Business Pinch?

At a recent event, a good friend of mine who runs his own Hi Tech Recruitment Business, said he had not experienced any slowdown. In some respects I agree. My business is dependent on outside companies wanting to expand and grow in the European Market and I have certainly seen greater reticence by US companies wanting to expand but equally I found Israeli and Indian companies to take up the slack.

However, his comments did intrigue me. We all know that one of the direct outcomes of a recession is lower corporate profitability, moves to cost cutting and inevitably, job losses and higher unemployment. I read recent newspaper articles which show that the number of new headcount positions across industry generally peaked some months ago and is now falling dramatically, while the same articles predict unemployment in the UK to rise to over 2 million.

It may be that some sectors, like Hi Tech, do not see such effects so rapidly. Much of their revenue comes from capital spend rather than operating costs and so maybe that is still healthy? It shouldn't be - as capital raising and availability is one of the major consequences of the credit crunch. In fact borrowing in general for overhead funding should be harder. So why is the Hi Tech market apparently bullet-proof as we experience marked slow down factors like rising fuel and energy prices which affect the cost of manufacturing and transportation of Hi Tech goods?

Head in the Sand Management

One of the prevailing factors that led us to the Credit Crunch was 'Head in the Sand' management at banks and finance companies. No Black Swans in the system were required, it was common sense that all the assets could not rise harmoniously and endlessly - there had to be a debit somewhere, and we certainly got it. The same management will survive and talk of new financial models as if they learnt a lesson but ultimately it will be people like us who pay the cost of it through mortgages, loans and general lending products.

And so in the Hi Tech sector. Perhaps the apparent buoyancy of the Hi Tech recruitment market suggests a 'Head in the Sand' syndrome within management of these firms - a belief that they have not yet experienced a slowdown in revenues and so they may believe they will be immune to its effects? It would be interesting to see what such managers think and understand their logic.

Certainly, as the dollar-pound-euro exchange rates ease, US companies are going to feel a little more bullish about Europe and its possibilities. There has been a strange logic prevailing for the last year that says while the dollar rate is high, such companies did not want to employ local European staff as their salaries in dollar terms were often far in excess of equivalent jobs in the US or even of the hiring managers. Yet the same firms seem to be equally happy to pay agencies fairly huge sums to do some 'Market Testing', which usually involves a short term project at quite a substantial premium to the market rates. It has certainly been a curious time.

If you judge the general market for jobs as shrinking due to the almost non-existent Recruitment Supplements in the quality papers, the Hi Tech market seems to be getting stronger and stronger as new adverts appear on Linked In and Job Boards by the minute, new email alerts and now even text alerts. It seems business is not slowing down in the Hi Tech market - on the contrary, it appears to be booming. And recruitment is at the forefront as only a week or so ago Michael Page rejected a £1.3bn bid for its business, clearly reasoning its price will rise in the current market rather than shrink.

So is this a 'Credit Crunch', 'Economic Slowdown' or 'Recession'?

Between all the doom-mongering, reactionary talk, and alarmist commentary then laissez-faire management, Black Swan random event theories and economic cycles there must lie the answers to the questions of what is it we are experiencing, how far will affect us and for how long? It would be helpful to business planning for most of us although I would advocate a policy of Prudence. Some questions on LinkedIn recently have asked what should you do in slowdowns or recessions - gear up or cut cost? Knowing what we are in would help answer that question because the two schools of thought have merit but I would suggest the art of execution is all in the timing.

For those companies who cut their cloth, pull in the reins or chop out unprofitable business to focus on core, may well be in the middle of these activities when the upturn arrives and so they actually magnify the effect of the slowdown and often irreparably damage some of their future earnings by missing opportunities. While those companies who carry on gearing up suddenly find a massive whole in their finances and jeopardise the entire business - rather like the banks have done.

Common Sense Prevails

The most sensible route is to try and gauge the market. If you are going to gear up - think about what areas of product, service or expertise are actually more needed in recessionary times and put more effort in those areas. If you are going to cost cut, be sensible about which areas you damage and try to do it one action rather than instigating a 'death by a thousand cuts' which you see so often as management misread the situation and thought a few cuts here and there suffice. It ends up in demotivating those who stay and that produces inertia and inefficiency of its own accord.

For those companies wishing to expand into Europe from outside, I would definitely avoid talking to recruiters - they do not care whether your business survives or not. Ultimately, in my business my aim is to work with my clients so as to make my services redundant to them at the earliest opportunity. This means testing the market is not about putting a toe in the water it's about achieving results against which you can make sound investment decisions for the future. So define those milestones carefully so that achieving them will tell you what you want to know and above all, work with a professional company that has a track record of understanding what emerging businesses need in order to be successful in Europe. It isn't about just getting a few sales, it's about selling in the professional image of the parent, attracting good business, representing the company in the press, at events, seminars, workshops and driving the KPIs to achieve the results. You want it exactly as if you were doing it yourself and that requires the most important element - trust.

If this appeals - we should be talking.

Do you prefer a stimulating job or more money?

Now I'm going to say something that may surprise you.

Boo!

No, it's not that. I was mildly surprised to read in The IOD Director Magazine this month that the fifth annual Happiness Index in a survey compiled by The City & Guilds revealed that workers from over 20 different occupations had ranked money as being only fourth on their list of criteria for judging happiness in the workplace. I know, you're asking, so why were Tanker Drivers missed off the list?

Highest rated was that their job must be stimulating and interesting. Second, was job security, pretty sensible in the current climate, and third was work-life balance.

Why is this of great importance?

Larger employers offer wide ranges of incentive and employee benefit options these days - some in quite complex systems which allow employees to 'trade' benefits like extra holiday for less pension contribution or similar things. These options are innovative and sensible when compared to the Happiness Index results because work-life balance is high on employee agendas.

However, small to medium (SM) sized businesses have a real difficulty keeping up. Not only are such benefit options tough to implement as the impact is not easy to quantify not just in terms of cost but impact to the business (e.g. if more staff opt for flexible hours or more holidays, how does this impact the company's ability to take orders or keep customers happy etc), but with the demands of things like maternity/paternity, keeping up with Employment and Equalities Law, taxation and many of the new costs to businesses, it becomes increasingly more difficult to tackle employee benefits and well-being as well.

The most obvious and simple way in which SM companies try to compete with larger companies is to offer similar all round salary and bonus benefits. For the more progressive, stock options are sometimes offered although they are not ranked as a 'here and now' benefit. But, the survey is saying that isn't going to compete with larger companies as money is only fourth on the agenda.

A Practical Example

I have recently been advising a lady who was offered a job by a small company - nice salary package and exactly her industry. However, after being contacted recently by a household name in media and datanetworks, the lady stopped in her tracks not because the salary and bonus was better, in fact it wasn't, but because there were a clear set of other benefits like car allowance, comprehensive private health car, a substantial contribution to a pension plan by the employer, discounts off their own brand products but most importantly was the fact it was a large firm and therefore offered greater job security.

Recessionary Times

In tougher times, larger firms offer a safer haven for many workers as the theory is that they have the capability to ride out the storm better as they are larger, offer better employee benefits and the chances are the jobs will be similar.

However, I would not necessarily agree with this assessment. We are seeing several large companies recently who have enjoyed significant success starting to hit, quite literally, brick walls. Northern Rock and the banking community don't look quite as a safe as before, Persimmons and the building sector is particularly vulnerable, while the fall out from the credit crunch will hit larger firms who are highly geared harder than profitable smaller ones who do not have massive borrowing.

For the bold, small companies who can adapt to change more nimbly and seek out opportunities faster, a recession can be a good thing as the larger firms try to shore up their positions and go back to their core competencies in the hope of weathering the storm.

Smaller companies are not a bad option but it may mean we have to break our reliance on the Happiness Index as there is an element of risk involved.

So how do smaller companies compete for talent?

Recruiters take their money where they can get it and larger firms not only pay the bills but offer greater opportunities. Smaller firms need professional recruiters who really know how to seek out talented individuals who are more likely to take a risk in their career in return for the benefits of success at smaller companies, who can 'sell the dream' of success at a smaller firm and above all help you compete against the morass of cheap adverts and database tracking systems to find candidates dominated by larger firms and help your company stand out and find real talent.

Recently, I helped Theorem Inc start up in the UK/Europe and find their first employee to drive their exciting business into Europe. Amongst the sea of adverts and agencies recruiting for large agencies and media firms, in just 6 weeks I had found, motivated and wrenched away from the might of the AOL Corporation, a superb, dynamic and highly capable Business Development Manager much to the delight of Theorem's CEO, Jay Kulkarni.

It wasn't about the pay necessarily, certainly not job security, it will be an interesting job if you call four walls and telephone that, work-life balance will be interesting as the boss is 5 hours behind, nor was it about the stock options as this company hadn't any at the time and had thrived without a penny borrowed from VCs.

It was about selling the dream.

That is tough for any recruiter as they have never experienced what it takes to do that so it is tough to know what to look for. Besides, in a world where transactions count, there is no point in wasting time worrying about making small companies successful when the big ones have vacancies.

Step this way

If you are a small to medium hi-tech business either entering the market from the US or are building your UK/European operation and finding it tough to attract exceptional talent in these times, then step this way. It takes a special approach to find and attract real talent and that's what I do.

Please call on +44 (0)207 193 2356 or mail me at nigel.dunn@calxeurope.com for an intial discussion.