|
September 2008
Light at the end of the tunnel?
As we enter our 21st year of trading, we can confirm that whilst we have seen many changes in the industry over the last 20 years, market conditions are very similar now to how they were when we first started. House prices are falling, offices are closing and staff are being made redundant in numbers. Having experienced challenging conditions back in the late 80’s/early 90’s similar to those of today we believe it has stood us in good stead. To win business in such a difficult market, and more importantly to then retain it, means that our levels of service and professionalism have to consistently be second to none. Reassuringly, many of the clients we recruited for back in the beginning are still clients of ours today.
Whilst vacancy numbers in residential sales have been falling consistently throughout this year, the demand for staff in lettings and property management has been strong. On a brighter note, since the beginning of September we have experienced a slight uplift in opportunities within residential sales as clients are surprisingly struggling to fill their vacancies. With redundancies being commonplace throughout all sectors of the industry, one would have thought that it would be easy to recruit right now, but this is quite simply not the case. We would estimate that up to 80% of people either losing or leaving their jobs in estate agency are changing career paths.
With on target earnings significantly lower than when the majority of sales negotiators joined the industry, many are now either moving into lettings or other property related roles, or leaving the industry altogether. Popular alternative career choices are recruitment and field sales, but with many industry staff still in their early 20’s, a number of these are taking the opportunity to go travelling or return to higher education.
We are pleased to report that demand for staff is stronger than we would have expected considering the market conditions, and we are still placing people in jobs. Here’s to our next 20 years in business!
Anthony Hesse Managing Director 15th September 2008
April 2008
The current message coming from the market is consistent in all sectors of the industry. The number of sales transactions taking place is significantly down year on year, with reports of 40-60% being the norm. Many of our clients have worryingly low sales pipelines, with little light at the end of the tunnel. Lettings departments, in contrast, are doing well in most organisations.
Sales vacancies are down year on year, but only by about 15%. There has been a marked increase in confidential vacancies with companies looking to replace under-performing staff. The majority of our clients realise that a large percentage of their sales staff have never experienced such conditions and are used to order taking rather than actually selling. It therefore comes as no surprise that the most sought after candidates are those more experienced staff with a proven sales track record.
Lettings vacancies are up compared with this time last year, with Administration & Property Management vacancies significantly up year on year.
Despite the poor trading conditions, estate agencies are still recruiting sales staff. Whatever the market conditions, companies still need good quality staff to maximise opportunities and gain market share, irrespective of how large that market may be. With the market in its current state, the main driving force behind the demand for staff is not one of expansion, but one of replacement. Employees are either leaving of their own accord or being ‘managed’ out of their current roles. If employees are leaving under their own steam it is either to join a more successful, more secure company with better prospects and pay, or to get out of the industry altogether.
Interestingly, when taking on sales vacancies and asking why the outgoing employees had left and where they had moved on to, about 8 out of 10 of them seem to have left the industry. This very much mirrors what happened in the late 80s / early 90s and perhaps helps to explain why there is still a shortage of candidates, even in such tough times. Many of the newer recruits to the industry were attracted to it on the basis that they would be earning at least 25-33% more than they are actually going to earn this year. This, tied in with the lower basic salaries and long working hours, probably explains the exodus of staff from the business. Quite simply, they can find alternative employment in other industries where they can earn more money with bigger basic salaries, work shorter hours and not have the stress!
Although we have seen a decrease in sales vacancies registered (c.15%), we would have expected candidate availability to increase significantly, especially in view of the market, but this is not the case. Tied in with this, the average time to recruit new staff has increased markedly, demonstrating the caution in employers’ and employees’ attitude. Employers are aware that the recruitment of experienced staff is expensive, and we believe uncertainty over the length of this slowdown is leading to retention of staff despite the challenging conditions. What the employers also realise is that these experienced staff are the most likely to be successful in this market. We believe this explains why there have only been a limited number of redundancies to date, and another reason for candidate availability being so low.
In such difficult trading conditions we appreciate companies need to look very closely at their overheads and wherever possible look at ways of saving money. Consequently, we anticipated some of our clients trying to recruit by their own means. Indeed, since the turn of the year we have had 8 companies telling us they have put their use of recruitment agencies on hold. Frustratingly for 7 of them, they are now using us again because they are finding it extremely difficult to find staff.
As always, good quality candidates are extremely fussy, but they are currently more discerning than ever. The best candidates will only leave their current employer to work for the best. As ever in such a market, financial security is high on their agenda, again mirroring the late 80s / early 90s. Such companies are perceived to have higher market shares, pay larger basic salaries, work shorter hours, and be financially more secure.
We are witnessing a number of office closures across all geographical areas. Our belief is that these are offices that have always been marginal, and have been closed on the basis that if they can’t make money in a good market how on earth are they going to in today’s! Again, we would have expected increased candidate flow due to these closures but it appears the staff are either being re-housed internally or are leaving the industry.
Anthony Hesse Managing Director 14th April 2008
May 2006
"You just can’t get the staff these days!"
Time and time again we are hearing from our clients that instructions are hard to come by in the current market. Interestingly, in recruitment we have the opposite problem with applicants/candidates being in short supply, and jobs plentiful. Anyone responsible for recruiting staff in their organisation will undoubtedly confirm that quality people are a rarity in today’s market. "In our 18 years of trading, we have never experienced anything like this" quotes Anthony Hesse, managing director of leading recruitment consultants Property Personnel. "The current shortage of good candidates is the worst we have ever seen. With a record number of vacancies registered this year alone, it is extremely frustrating for both us and our clients that there is quite literally no one out there!"
"Whilst this is great news for job seekers with many quality vacancies available from trainee through to director level, there is a real shortage of candidates in the market right now. This is causing a considerable headache for companies looking to recruit. It is probably no surprise, therefore, that over 33% of the vacancies registered this year alone are for clients quite happy to consider people from outside the industry, a trend that we believe will continue to rise as long as there is this huge supply and demand imbalance."
So why is there such a shortage? According to Anthony, there is no straightforward answer, but a number of factors influence the availability of candidates. "With the exception of the last proper recession of the late 80’s and early 90’s, the market has always been like this. I can remember discussing this issue with clients back in the early 90’s when we were coming out of the recession" confirms Anthony. "Finding good quality staff willing to work long and anti-social hours on low basic wages in what is a pressurised and uncertain environment has never been easy, and now there are more and more service industries (including recruitment!) fishing in an ever-decreasing candidate pool. It probably comes as no surprise to those responsible for recruitment to learn that it is now difficult to recruit even trainees in to the business, people who it has historically always been easier to find than experienced staff. Not any more! And herein lies another problem. In an industry renowned for high staff turnover and for losing staff to other industries, our clients are quite simply not investing enough time recruiting the best candidates in at grass roots level."
Even slight falls in the property market can exacerbate this problem. Less than 18 months ago our clients were experiencing difficult trading conditions. A direct result of this downward trend was that candidates registering with us were frustrated with their earnings, and bored because they were not busy. As a consequence quite a few left the industry. This was especially true of new starters; people who have only experienced one market, an easy one!
At Property Personnel we found ourselves spending a great deal of time managing our candidates' salary expectations, and having to educate them to become more realistic in the existing economic climate. Now the market is so much more buoyant we are experiencing a different pressure on candidate availability. Estate agency staff are busy again, and motivated, and most importantly, earning more money. These people don’t need or want a new job right now. They are happy where they are.
Another reason for candidate shortage in Anthony’s mind is that employers have finally woken up to the fact that good employees are worth looking after. Gone are the days of estate agents using and abusing even their top performers. "Staff retention is an important issue to more and more of our clients today, and rightly so" says Anthony. "It never ceases to amaze me how much time, energy and money companies are prepared to spend on luring a high achiever into their organisation, only to then assume that their job is done"
"In an industry where the quality of staff in an office can quite simply be the difference between its success and failure, we have also noticed that our clients are getting fussier and fussier about who they will recruit. But it is not just our clients who feel this way. Candidates registering with us realise they are in demand, and have a huge choice. Once, any old job in agency would do as long as the salary and the car were right, but now job seekers are much more discerning. Career opportunities, training and development, management support and working conditions are all more important to our candidates than money. It may surprise you to know that money is rarely the reason people come to us wanting to change jobs" continues Anthony. "This actually bodes well for the future, and in the medium to long term should help to reduce staff turnover in our industry as more suitable matches are made."
Anthony Hesse Managing Director 18th May 2006
January 2006
Having had a well-earned break between Christmas and the New Year, we returned to our offices in January with a slight degree of trepidation, fearing a market similar to that at the beginning of 2005; a stagnant one.
We are now two weeks into the New Year and we can report that the ‘following wind’ of the autumn market seems to still be with us. Having spoken with many of our clients already this year it appears that most are experiencing positive trading conditions, both in sales and lettings. There are also well reported hot spots in the property market, with the 2012 Olympics seemingly having a significant effect on transactions and prices in parts of east London, and the return of some huge bonuses for the ‘city boys’ affecting the top end of the London and country market. Feedback would lead us to believe that there is still uncertainty in the first time buyer market, though even this appears more active than a year ago.
With many of our clients adding to their teams to maximise business opportunities, we have registered a record amount of live job vacancies in the first two weeks of 2006 – a staggering 205 of them!
Whilst this is great news for job seekers with many quality vacancies available from trainee through to director level, there is a real shortage of candidates in the market right now. This is causing a considerable headache for companies looking to recruit. It is probably no surprise, therefore, that over 25% of the vacancies registered this year are for clients quite happy to consider people from outside the industry, a trend that we believe will continue to rise as long as there is this huge supply and demand imbalance.
Anthony Hesse Managing Director 16th January 2006
Autumn 2005
The majority of our our clients found trading conditions particularly tough during the last 6 months of 2004. This was reflected with many organisations coming into the beginning of this year with poor pipelines, and with sales reportedly down, on average about 30% year on year.
A direct result of this downward trend was that candidates registering with us were frustrated with their earnings, and some even left the industry. This was especially true of new starters; people who have only experienced one market, an easy one!
At Property Personnel we found ourselves spending a great deal of time managing our candidates' salary expectations, and having to educate them to become more realistic in the current economic climate.
This created an interesting recruitment market for us, probably a very similar one to the property market (with vendors and purchasers poles apart in their expectations), and there is no doubt that it was putting pressure diirectly on salaries. As house prices were falling or stagnating, so were estate agents' salaries.
With respect to recruitment activity, confusing messages were coming from our client base. Whilst some estate agents were laying off staff and others not replacing those that were leaving, others took a more proactive approach. Some clients beefed up their teams to try to steal some market share from weakening and vulnerable competitors. Many of our instructions at this time were confidential ones, with employers looking to replace poor performers with higher achievers.
After an initial dip in the number of vacancies registered with us in the first quarter of 2005, the second quarter saw a dramatic increase in vacancies registered. In fact, quarter 2 was an all time record for us in terms of instructions and successful placements, proving the recruitment market at least was far from dead!
As the summer months approached we witnessed the usual seasonal slowdown, with many clients and candidates away, and although quieter than in April/May/June, we were busier than the same period last year.
As autumn approaches and the schools have re-started, many of our clients are telling us that they are extremely busy, and as a consequence looking to recruit extra staff to cope with the increased activity levels. This is excellent news for job seekers, particularly both experienced and inexperienced sales and lettings negotiators, with many fantastic opportunities with quality clients currently available. Let's hope the recent reduction in interest rates has brought confidence back into the housing market at long last.
Anthony Hesse Managing Director
|
