The following post is a summarised extract from a report published jointly by the Chartered Institute of Personnel and Development (CIPD) and KPMG called Labout Market Outlook (Winter 2008-09).  The report is the result of surveying almost 900 companies asking a broad range of job and economic questions.

The full report can be found at: http://www.cipd.co.uk/NR/rdonlyres/3D88488C-C287-4840-8AF8-1E638E29DADC/0/4742LMOWinterWEB.pdf 

Recruitment and Redundancy Highlights:

1. Over a third (36%) of organisations in the survey expect a decrease in staff levels (Vs 18% in the autumn survey)
2. Recruitment intentions have declined significantly over previous quarters; 62% planning to recruit compared to 75% and 86% in previous surveys.
3. One third of employers expect to make some redundancies in the next 3 months.  Primary tactics to avoid redundancies are to freeze recruitment and terminate contract staff.
4. Nearly a fifth of companies have introduced short-time working.

Salary and Wage Costs Highlights:

1. The average pay rise is expected to fall over the next few months with an average pay rise expectation of 2.6% (compared to a previous value of 3.45%).
2. The factors affecting people responsible for planning pay reviews, quoted in terms of decreasing importance are; the organisation’s financial performance, inflation versus business confidence, staff retention, rewarding high-performers and, way behind, the Government’s call for pay restraint.

Economic optimism (or not!):

1. 80% of companies believe that the economic condition of the UK will worsen over the next few months, with just 2% believing that it will improve!
2. 34% of firms think that their company’s financial performance will deteriorate in the short term. With almost half (46%) not expecting a significant change.

Coping with the credit crunch:

1. Almost two-thirds of companies experienced (or are about to) an organisational budget cut in 2008.
2. Travel budgets have been slashed or new restrictions (flights, taxis to name but two) have been put in place by many employers with many companies making use of telephone or video conferencing instead.
3. Increases in communication from top executives and senior management are also popular with many firms.

I know there’s a lot of snow in London at the moment, but yesterday it seemed as if some people had stumbled their way through the back of the wardrobe and found their way into Narnia!

Enter five journalists; Robert Peston, Jeff Randall, Alex Brummer, Simon Jenkins and Lionel Barber brought up in front of the Treasury Select Committee for, would you believe it, a grilling regarding their part in the downfall of Northern Rock and the Credit Crunch!

Questions centred primarily on their responsiblity as professional business journalists and whether or not they should think first before publishing or at least delay breaking a story for a while! Utter rubbish.

Peston was asked the rather foolish but direct question,

“Were you responsible for the run on Northern Rock?”. 

His answer after a brief crowd-pleasing pause was

“Given it a lot of thought, and no!”  

Firstly, the MPs accuse the journalists of “over-reporting” and then in a dazzling turn-around towards the end of the interrogation, change their mind and the journalists are accused of not publishing enough about the crisis.  Sorry but you can’t have it both ways!  Either way it is now extremely difficult to hide the truth from the public these days even in an industry which is fairly impenetrable by outsiders.

Aspersions are also cast on the journalists’ so-called shady sources.  The journalists counter this by saying that they have multiple sources and cross-check their sources stories to ensure accuracy of reporting. I suspect that several of these sources are likely to be MPs, perhaps even, heaven forbid,
members of the Treasury Select Committee!

Peston fought back against the MPs saying,

“It was fairly clear that the Government, knowing it was about to acquire large chunks of these banks were, I sense, using the press to force down the share price.”

Really? It had never crossed my mind!  

Just for good measure the subject of media regulation popped up again.  This was an easy ball for the journalists to catch with their repost along the lines of - well actually this is a catastrophic failure of the banking system that we’re talking about.

To end with, in a rather farcical fashion, the journos were asked what they thought would happen in the future.  Perhaps the MPs were hoping to get some tips and try some short-selling for themselves but no such luck.

I also caught a few brief minutes of Jeremy Paxman interviewing some economics bod (sorry didn’t catch his name as it flashed on the screen) on Newsnight about the discussion between the journalists and the Select Committee.  He seemed to think that the journalists (although obviously being fine upstanding members of the community and great reporters) were attributable for at least some of the blame.

When asked what Peston could possibly benefit by bringing down major financial institutions through his spot on the BBC and his infamous blog, the economist replied,

“Fame!”

I rest my case!

You’d think that buying a “quality” newspaper at the weekend would mean that if you hold it by the main fold and shake it, some “quality” items might drop out of it - but you’d be wrong.

Take last Saturday’s Telegraph as an example…..

What fell out of it was a glossy booklet sponsored by the Reader’s Digest proclaiming…”1,000 Ways to Save Money and Time”.  Obviously this sparked up a bit of interest as in the current climate we’re all looking to save a few bundles of cash and saving time is always a neat trick when you don’t have any to start with!

I opened the booklet and flicked through it eagerly.  Here are a few of the “top tips”:

1. Separate toes when applying polish Get the comfort of a salon treatment when giving yourself a home pedicure. Just place marshmallows between your toes to separate them before you apply the nail polish. Make sure your feet are completely dry though or they may get sticky!

Sorry but I don’t get this…..what woman in their right mind is going to think “I must get some marshmallows from the supermarket so that I can paint my toenails”?  It’s just never going to happen, plus who gets to eat them afterwards?

2. Make a facial mask Pat your face with mild yellow mustard for a bracing facial that will soothe and stimulate your skin. Try it on a small test area first to make sure it will not be irritating.

This sounds highly dubious to me and brings a whole new meaning to hot flushes!

3. Wash lettuce in washing machine If you are expecting lots of people for an outdoor lunch and have lots of lettuce to wash, place one pillowcase inside another. Pull apart the lettuce heads and fill the inside case with lettuce leaves. Close both pillowcases with string or a rubber band and throw the whole package in the washing machine with another large item, such as a towel, to balance it. Now run the rinse and spin cycle. Your leaves will come out rinsed and dried more effectively than in a salad spinner. 

Hmmmm…..first of all, no matter how big your party, nobody eats this much lettuce especially after you tell them how you “cleaned’ it.  Secondly, aren’t you meant to carefully pat lettuce dry so it doesn’t bruise?

4. Make an extra grill If you have a big party or barbecue planned and the grill is not big enough to handle all those burgers, sausages, steaks and hot dogs, improvise a second grill by building a fire in an large old pot. Cook on a wire cake rack placed over the pot. After you are finished, put the pot’s cover on to put out the fire and save the charcoal for another outdoor cooking session.

Or in true knokknok style, ask a friend if you can borrow his!

5. Make cut flowers last longer Don’t throw away the last drops of a bottle of soft drink. Pour about 50ml into the water in a vase full of cut flowers. The sugar in the drink will make the blossoms last longer. Note: If you have a clear vase and want the water to remain clear, use a clear drink, such as Sprite or 7-Up.

Yes, I can see it now…..children all over the land topping up their glasses of pop and, instead of emptying the last few dregs, they miraculously hold the last bit back to keep for their mother’s cut flowers…a likely story!

I had expected to read a few gems that would help make the credit crunch a little more palatable but this booklet is a joke and a complete waste of time (even more so than this article)!  I wonder how much it cost to produce?

I shan’t be buying the accompanying book.

Who and what is safe in the current recession?  Are there certain industries and jobs that are recession proof?

Recession Proof Jobs

1. Healthcare - think doctors, nurses, surgeons, therapists, other healthcare workers etc…. (do more people get sick during a recession?).  Conversely though, jobs such as dentistry may not be as recession proof.  People will tend to put-off or avoid visits to the dentist in case there may be “hidden costs”!

2. Education - teachers (full and part-time), lecturers etc… people still need to send their kids to school although there is likely to be an impact on private schools as parents juggle their finances and save on school fees by sending their children back to state schools.   For higher education there will be a lot of people looking to hide from the recession by retraining.  So, anticipate an increase in demand for educators and trainers.

3. Other Public Sector - if you’re working on an infrastruture project that is government funded, the finance for the project is extremely likely to be cut.  These are the projects that the government is trying to use to kick the ailing economy (with steel toe-capped boots on) into life again.  You should be safe here! 

4. Computers and Technology - well, it’s the future and every firm (just about) relies on technology to underpin its business functions.  Good people (”Do-ers”) that are properly qualified are also hard to find.  I’m not totally convinced that all job types in computer and technology are safe as IT is still seen as a huge expense by a lot of companies.  New developments are likely to be shelved.  Whether or not you think the IT industry is safe also depends on how you are employed.  The ratio of contractors to permanent staff is important….contractors are a lot easier to shed in times of trouble than permanent staff.

5. Environmental Jobs - as concerns about global warming swell, more and more companies are turning green.  There’s scope here for employment for green engineers, scientists and consultants to help firms become much more eco-friendly, save money and comply with new government regulations.

6. Matters of Life and Death - surely all midwives and funeral directors are safe in a recession? Ditto for good cheap hairdressers!?!

 7. Despairing Urges - as we move further into recession many of us will sink into depression hence there will be a boost in chocolate manufacturers’ sales (think Eddie Murphy style logic in Trading Places). :-)  Ditto for breweries I think!

8. Accountancy - Boom or bust, the world still needs accountants.

Recession Prone Jobs

1. Foreign Travel - Due to certain weak currencies and a weak economy people are less likely to travel abroad whether on business or for a vacation.

2. Car Sales - Car prices are rock bottom at the moment (both new and used).  Maybe we’ll see the proper emergence of a “green car” soon.

3. Building and property - Any job title with the word “building” or “property” is looking extremely precarious.  House prices are falling, nobody is moving and few people are thinking of extensions.

4. Discretionary spending - Any industry that relies on discretionary spending is going to be badly affected.  Think of retail firms (how many high street firms in the UK will go bust this year?) or restaurants…. “eating in” will be the new “eating out” in 2009!

In the interests of fair play……here was the recent, positive statement from Apple….compared to Microsoft.

Best Quarterly Revenue and Earnings in Apple History, iPod Sales Set New Record

CUPERTINO, California—January 21, 2009—Apple® today announced financial results for its fiscal 2009 first quarter ended December 27, 2008. The Company posted record revenue of $10.17 billion and record net quarterly profit of $1.61 billion, or $1.78 per diluted share. These results compare to revenue of $9.6 billion and net quarterly profit of $1.58 billion, or $1.76 per diluted share, in the year-ago quarter. Gross margin was 34.7 percent, equal to the year-ago quarter. International sales accounted for 46 percent of the quarter’s revenue.

In accordance with the subscription accounting treatment required by GAAP, the Company recognizes revenue and cost of goods sold for iPhone™ and Apple TV® over their economic lives. Adjusting GAAP sales and product costs to eliminate the impact of subscription accounting, the corresponding non-GAAP measures* for the quarter are $11.8 billion of “Adjusted Sales” and $2.3 billion of “Adjusted Net Income.”

Apple sold 2,524,000 Macintosh® computers during the quarter, representing nine percent unit growth over the year-ago quarter. The Company sold a record 22,727,000 iPods during the quarter, representing three percent unit growth over the year-ago quarter. Quarterly iPhone units sold were 4,363,000, representing 88 percent unit growth over the year-ago quarter.

“Even in these economically challenging times, we are incredibly pleased to report our best quarterly revenue and earnings in Apple history—surpassing $10 billion in quarterly revenue for the first time ever,” said Steve Jobs, Apple’s CEO. 

“Our outstanding results generated over $3.6 billion in cash during the quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second fiscal quarter of 2009, we expect revenue in the range of about $7.6 billion to $8 billion and we expect diluted earnings per share in the range of about $.90 to $1.00.” 

Hmmm…..not many records set here! Are we in the grip of a recession?  Mind you, what’s 5000 job losses for a company the size of Microsoft?  Bill Gates probably makes that in a lot less than the blink of an eye !

REDMOND, Wash. — Jan. 22, 2009 — Microsoft Corp. today announced revenue of $16.63 billion for the second quarter ended Dec. 31, 2008, a 2% increase over the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $5.94 billion, $4.17 billion and $0.47, declines of 8%, 11% and 6%, respectively, compared with the prior year.

Client revenue declined 8% as a result of PC market weakness and a continued shift to lower priced netbooks. However, strong annuity licensing drove Server & Tools revenue growth of 15%. Entertainment and Devices revenue grew 3% driven by strong holiday demand for Xbox 360 consoles with a record 6 million units sold in the quarter.

During the quarter, Microsoft showcased significant new product innovations by debuting Windows 7, Windows Azure, Office Web applications, Windows Server 2008 R2 and Office Communications Server 2007 R2. Microsoft also announced general availability of Silverlight 2, Exchange Online, SharePoint Online, Windows Small Business Server 2008, Windows Essential Business Server 2008 and a new release of Microsoft Dynamics NAV.

“While we are not immune to the effects of the economy, I am confident in the strength of our product portfolio and soundness of our approach,” said Steve Ballmer, chief executive officer at Microsoft. “We will continue to manage expenses and invest in long-term opportunities to deliver value to customers and shareholders, and we will emerge an even stronger industry leader than we are today.”

In light of the further deterioration of global economic conditions, Microsoft announced additional steps to manage costs, including the reduction of headcount-related expenses, vendors and contingent staff, facilities, capital expenditures and marketing. As part of this plan, Microsoft will eliminate up to 5,000 jobs in R&D, marketing, sales, finance, legal, HR, and IT over the next 18 months, including 1,400 jobs today. These initiatives will reduce the company’s annual operating expense run rate by approximately $1.5 billion and reduce fiscal year 2009 capital expenditures by $700 million.

Business Outlook

“Economic activity and IT spend slowed beyond our expectations in the quarter, and we acted quickly to reduce our cost structure and mitigate its impact,” said Chris Liddell, chief financial officer at Microsoft. “We are planning for economic uncertainty to continue through the remainder of the fiscal year, almost certainly leading to lower revenue and earnings for the second half relative to the previous year. In this environment, we will focus on outperforming our competitors and addressing our cost structure.”

Due to the volatility of market conditions going forward, Microsoft is no longer able to offer quantitative revenue and EPS guidance for the balance of this fiscal year. Microsoft offers operating expense guidance of approximately $27.4 billion for the full year ending June 30, 2009. This information supercedes the fiscal year 2009 guidance that Microsoft provided on Oct. 23, 2008. Management will discuss second-quarter results, and the company’s qualitative business outlook on a conference call and webcast at 8 a.m. PST (11 a.m. EST) today.

The whole world seems to think that their job is the next to go and maybe it will, but people need to keep in mind that a company shedding 25% of its staff would be big news indeed, however 75% are still in a job.

It’s also worth noting that the headlines in the Daily Mail, what I refer to as the ‘Daily Outrage’ that xyz bank is shedding half its staff does hide the fact that a good number of those will work for business unit abc which is being spun off or sold to another bank, so strictly speaking the Daily Outrage is correct the payroll will shrink by 50% but not all those 50% will be walking away clutching a redundancy cheque and a P45.

In the ‘Great Depression’ between 1929 and 1935 things were about as bad as they could get but only 10% of business folded, when the economy recovered the 90% of businesses that survived doubtless divved up the trade from the failed 10% between them. In a similar vein Matalan, Primark and Game are seeing increased trade from the demise of dear old Woolies.

This period of non stop bad economic news will, like all things pass and we’ll move on to better times, perhaps we’ll all be better people for the experience. But everybody should get this into perspective it’s not the end of the world or even the beginning of the end of the world. Things have been far worse than this; 1974 Britain had a government enforced 3 day working week. Power cuts and shortage of commodities particularly sugar I seem to remember were the order of the day. The recession of the early 80’s when I was starting my working life wasn’t a particularly rosy time either, that soon gave way to the boom years of the mid 80’s and the rise of the yuppie. Early 90’s another biggie which gave way to the longest continuous period of economic expansion Britain had ever seen, you remember that – the one that has just come to an end.

In a world of instant this and instant that, people’s expectation of action and effect has become distorted; an interest rate cut on Thursday lunchtime will not lead to the end of the recession in the following month.  Petrol prices have plummeted in the past 3 months, mortgage costs will be following them down, remember many people have mortgages that the payment level is set on an annual basis. These will start to fall typically from the February payment. Gas and Electricity prices will start to come down in the spring.

All these factors will lead to people having more cash in their pockets. However, what they need is the confidence to spend it rather save it. Mervyn King and Alastair Darling cannot give people confidence it’s something that will come from within!

Seems like this lull in the recruitment industry is even taking the wind out of Google’s sails a tiny bit…..

The following entry was posted in Google’s blog a couple of days ago by their VP of People Operations…….

1/14/2009 03:01:00 PM

As we made clear during our last quarterly earnings call in October, Google is still hiring but at a reduced rate. Given the state of the economy, we recognized that we needed fewer people focused on hiring.

Our first step to address this was to wind down almost all our contracts with external contractors and vendors providing recruiting services for Google. However, after much consideration, we have with great regret decided that we need to go further and reduce the overall size of our recruiting organization by approximately 100 positions.

We know this change will be very difficult for the people concerned, and we hope that many of them will be able to find new roles at Google. They helped build this company, new hire by new hire, and we are enormously grateful for everything they have done.

Posted by Laszlo Bock, Vice President, People Operations

Maybe they’ll be cutting back on Dodgeball time in the corridors next!

If you’ve been reading the press lately you’ll know that Monster have rebuilt their website.  I found a marketing brochure describing their great undertaking.  Here are a few quotes from the Monster literature:

When you invented the game, it’s okay to change the rules.

Today, we are reinventing the Monster Seeker and Employer experience, using patent-pending technologies to create new, never-before-seen products and services. In short, Monster is revolutionizing the way you recruit. Again.

That’s pretty big words from a pretty big company.  So the BIG question is “How much of this is hype, how much is bells and whistles and how much is blind panic by the Monster money making machine?”

I’ll do an in-depth review of the new features in a later post, but at first glance their site is still very busy to they eye.  There’s a lot of stuff that either has no relevance to me (the usual “career advice” and “how to write that perfect CV”) or, well just a lot of “job noise” that I’m never going to click on.

In their advance search, for example, they still stick to the rather dull splitting of industries into vertical segments and an old-fashioned list of click and select career checkboxes.  That’s not innovation surely?

At first glance, this isn’t anything like a full body makeover but more of a facelift.  Monster still looks ugly to me!