Nigel Young has worked in the interim industry as a consultant, client and candidate over the last 20 years. In this article he assesses the impact the economic crisis is having on the interim management industry and the wider UK economy and asks, is recovery on its way yet?
As a rule of thumb, I have always seen the interim industry as a reflection of what is happening in the market generally. If the interim market slows down, then it usually coincides with a slowdown in the recruitment industry and the marketplace overall.
Additionally, activity in the stock market can also be a key indicator and these factors are linked to that key measure: confidence. If there is general confidence borne out by companies and brokers, then businesses will be willing to invest in recruitment, interim management and other services and the market will move forward. But in these unprecedented times of economic uncertainty, is recovery for the UK economy imminent?
The Path to Recovery for the UK Economy
Cutting Through the Crisis
When the economic crisis first took hold, companies were looking for professionals who could identify efficiencies and implement them fast. This approach called for a particularly tough line from finance, procurement and HR leaders and we saw an increase in demand for interim support in these areas. As in most recessions, functions such as marketing were particularly affected and experienced a significant decrease in demand. Five years on, the market cycle has moved forward.
Bumping along the Bottom
Most of the companies that survived the downturn are now leaner with a tighter overhead structure. Further cost reduction is less of a priority. The emphasis is on top-line growth spurred on by business confidence. However, for every, positive market indicator, unemployment fall, stock market rally etc. there seems to be a counter force in the form of an unstable currency or negative opinion poll standing in the way of progresss. So what is the solution? Where is the road to recovery for the UK economy?
Spend, Spend, Spend
Simply, history teaches us that an economy has never come out of recession until consumer spending increases – and the will does appear to be there. Although austerity has become a bit of a buzzword, consumers can spend when motivated to do so. Look at the record year Comic Relief has just had! We need to identify the ways in which government can make it fashionable for the population to spend again.
Ironically, this may not be achieved by what Cameron and Osborne have put in the budget, but perhaps more by how we feel collectively as a nation. Either way, It’s only when we are successful in getting the country to spend again, will we be able to start climbing the curve to recovery for the UK economy together.
What do you think the UK economy needs in order to get back on the road to recovery? Share your thoughts with us in the comments.