Here’s an excerpt from our Procurement Quarterly Market Update for the second quarter of 2015.
The second quarter of the year brought a UK general election and further concern about the economic stability of the Eurozone. At Edbury Daley, we saw a drop in the number of new procurement vacancies coming to the market prior to the election. With opinion polls predicting a hung parliament and political commentators speculating on which parties would be capable of striking a marriage of convenience to create a majority, uncertainty was rife in the business world.
For many businesses that uncertainty manifested itself in delayed hiring decisions with positions pulled or postponed. The unexpected Conservative majority provided a considerable boost to business confidence but also introduced the prospect of a referendum on the UK’s membership of the EU. For those businesses reliant on trade across EU member states a new uncertainty was created by the Conservative manifesto.
The wider economic landscape had a filtering effect on those business looking to hire. Those truly committed to expansion still went ahead and searched the market for the procurement people they needed. The more tentative recruiters drew back and waited. The impact at Edbury Daley was a surge in conversion from job instruction to placement.
Those businesses which still hired enjoyed the benefit of a window of opportunity whereby the strongest candidates briefly had slightly fewer potential career moves to choose from. Coupled with our advice on salary and talent attraction they were able to strengthen their procurement team during Q2.
The more tentative recruiters made little progress with sluggish recruitment processes and weak financial offers to the strongest candidates leading to offer rejection. The candidate market proved too competitive for those businesses unable to adapt to changing conditions and many still have unfilled vacancies that are months old. Specifically, these business recruitment processes’ were too cumbersome with excessive timescales and too many interview stages which results in a poor candidate experience. Several also suffered from wider company issues such as hiring freezes and changing corporate goals.
To address this issue directly, Edbury Daley conducted a survey amongst one hundred procurement professionals gauging their response to various components to a typical corporate recruitment process. Using the results as a basis for best practice, we have advised a number of clients who have been agile enough to implement a number of changes to improve their time to hire. You can see the results here. Procurement leaders who had endured multiple offers and rejections over the past six months are now getting the people they need in to the team.
The overall picture remains that the very best performers in procurement are hard to attract away from their existing employers. Post recession, businesses are more willing to provide basic salary increases and bonus payments to their best people. In addition, we are witnessing an increase in the counter offer on resignation. This last ditch attempt by the current employer is often too late to prevent the valued member of the team leaving but is a clear indication of the perceived difficulty of recruiting a high quality replacement. This trend is seen in the wider jobs market:
“our own survey indicates that three-quarters of organisations have struggled with recruitment challenges in the last year, particularly when filling skilled or niche roles” Mark Beatson, Chief Economist at the CIPD
If you would like to receive a copy of the full report please contact Simon Edbury via email@example.com
We started our quarterly reports on the job market for procurement professionals back in the tougher economic climate of 2009 and since then we have regularly reported gradual improvements in market conditions albeit with a few notable exceptions.
We are pleased to say that Q4 of 2013 has been a very positive period, and coming on the back of a strong third quarter, the second half of 2013 has showed the most notable improvement at any time since we started formally observing the trends. In fact in some areas there is now a genuine full blown battle for the best talent as we suggested in the Q3 report. The key indicators of this are:
- Strong candidates regularly have three or four good roles under consideration at any time, particularly in the most popular areas of indirect spend (data to follow) such as marketing and technology.
- Significantly increased evidence of companies using recruitment suppliers outside of the preferred supplier list.
- There is also less reliance on outsourced or in house recruitment teams for procurement roles that are difficult to recruit for because of the need for specialist market knowledge in a competitive market.
To view the Q4 indirect spend data and read the rest of the report please download the Procurement Quarterly Market Update & Indirect Spend Index Q4 2013
Help to Buy is dominating the headlines at the moment, dividing opinion as to whether it is helping speed up the economic recovery or simply laying the foundation for another property price bubble. Regardless of which side of the argument you agree with, there is no question that the scheme is helping sales directors of housebuilding companies all over the UK meet or exceed their growing completions targets.
Interestingly, a number of sales directors were sceptical of the impact of the Help to Buy scheme when it was launched earlier this year. Their reasoning was simply that there were already a number of mortgage products available for the buyer with just a 5% deposit so Help to Buy wasn’t going to be a difference maker. However there is no question that the scheme has been highly effective in bringing more buyers to market. Interestingly, it may well be the controversy over the long term effects that has kept it in the news and therefore the potential buyers mind. The initial announcement was in the 2013 budget so right from day one, the message enjoyed a high profile platform and the ensuing debate over its merits has acted like a consistent marketing campaign through recent months. So in short the national profile of Help to Buy has been a huge driver behind it’s success.
The second phase of Help to Buy has been brought forward enabling the government backed equity loans to be utilised on second hand property. In theory this is bad news for the UKs housebuilders as the buyers previously were restricted to new build property if they want to participate in the scheme. They now have a choice. So will 2014 see Help to Buy purchasers drifting towards the second hand market and the positive impact on housebuilders diluted? Not necessarily. The number of buyers taking up the scheme may simply grow sufficiently to sustain both the ambitions of the new build and second hand market simultaneously. As the scheme becomes more and more widely used tentative potential buyers may well be drawn to the market. In property most buyers are also sellers. So any process which facilitates a quicker sale enables the seller to become a buyer. For example a family with a home with little or no equity may be able to more easily sell it to a first time buyer who needs the Help to Buy scheme to make the purchase. The family themselves can then utilise the same scheme to purchase another property which could be new build. In other words, by extending the scheme the chancellor is further unlocking the property market which ground to a halt during the recession. For everyone involved in the property industry that is very welcome news.
Simon Edbury is a specialist in the recruitment of experienced house building staff. His recent work has focused largely on sales positions in the new homes sector and he has successfully appointed people with existing house building industry experience, and those with transferable skills from other sectors.
If you need staff for your developments why not advertise on www.careersinhousebuilding.co.uk or contact Simon for advice on industry trends and how to recruit the staff you need in challenging market conditions.
Predicting the future in any industry is a precarious business, in housebuilding it is almost impossible. The past ten years have seen huge amounts of volatility. Since 2008, anybody involved in housebuilding has been pre-occupied with the credit crunch so it is easy to forget the mergers and acquisitions that preceded. For those who worked for Westbury, Beazer, Wilcon, Alfred McAlpine and many others the pre-recession years were full of job insecurity despite the prevailing market conditions. For those that were on the wrong end of redundancy several times before 2008, the recession was the final straw. Having found gainful employment in other sectors they will never return to housebuilding.
The three and a half years that have defined the recession have, unsurprisingly, put a halt on acquisitions. Banks have been licking their wounds and repairing their battered balance sheets so loans for acquisition have been hard to come by. For those builders who were highly geared pre recession the last few years have involved constant dialogue with banks to restructure debt, avoid breaching covenants and generally staying solvent. However, as the new homes market shows early signs of stability the odd rumour of who might be buying who is beginning to resurface. Further consolidation of housebuilding companies seems likely as the institutional investors like to see clear market leaders enjoying substantial market share and benefitting from economies of scale.
The mortgage market is showing signs of easing with an increasing number of 95% LTV products becoming available. This should re-open home ownership to the first time buyer which in turn allows increased movement further up the chain and will put an upward pressure on house prices as buyers begin to compete for individual properties. The next two years is likely to see the mortgage market find it’s balance point between managing credit risk and profitability. It is worth bearing in mind that default rates in the UK never grew beyond 1% even at the peak of lending which suggests that there is plenty of head room for high LTV products at sensible rates.
All of the largest UK housebuilders closed offices during the recession, particularly where they had multiple offices in one geographical region. This was all part of the rationalisation of capacity to enable them to make profit at half of the 2007 production volumes. However, if the mortgage market does encourage the first time buyer back to the market housebuilders will have two growth options to fulfill demand. They can either grow organically by opening new offices (or re-open previously closed operations) or go down the acquisition route and purchase an established competitor in the target region. The former method will lead to recruitment of staff and may force the industry to be a little more open minded about where it sources it’s new employees. With fewer competitors to plunder for staff and many of those made redundant now lost to the industry forever, housebuilders will have to look at transferable skills from other sectors and improving their own training and personal development to make the most of these individuals.
In January 2008 someone turned the lights off.
There had been rumours during 2007 that housebuilding sales were slowing up but after ten years of boom it was hard to take them seriously. But by spring the following year national housebuilders were closing regional offices and make redundancies on a mass scale. Eighteen months later most residential developers only employed between 30% and 50% of their pre recession workforce. Thousands of experienced professionals had been laid off. Many will never return to the industry but what about those who want to recommence their career in residential development? If this sounds like you, here is an action plan to make the most of the job opportunities in the market today.
First of all there is some good news. There are more jobs in the UK housing market now than there have been for three years. The slash and burn approach to staffing overhead seems to be over. There is little growth in housebuilding and sales rates are not materially higher in 2011 than they were in 2010 but, and this is the crucial point, builders are prepared to recruit in order to replace leavers. UK based new homes developers have spent the past two years restructuring their businesses to be profitable on roughly half the volumes they operated on in 2007. For most, they have arrived at that point and do not want their businesses to contract anymore so when someone leaves they recruit a replacement.
So now we have established there are jobs to pursue, how do you go about it?
First of all get your CV up to date. Don’t wait for a job to come up and then start the CV. Be in a position to react quickly. There is a lot of literature available regarding the style and science of CV writing but don’t get lost in the nuances of it. A good CV in housebuilding is no more than three pages of A4 with a clear chronology of work history and any relevant qualifications and training. Concentrate on the last ten years of your work history and highlight successes and achievements in each position and support with evidence. Be wary of simply replicating your job description as this tells the reader what you were supposed to achieve not what you actually achieved.
So now the CV is ready, you need to find job opportunities to apply to. There are four main sources of housebuilding jobs as follows:
1. Traditional media advertising: You will find housebuilding jobs advertised in Housebuilder, Showhouse, Building, Estates Gazette, and occasionally in regional newspapers. The recruitment pages of the industry journals have dwindled significantly over the years but it remains a viable source of jobs.
2. Online advertising: Building and Estates Gazette have both developed an online presence for careers as an extension of their traditional recruitment advertising. In addition two specialist housebuilding job boards have been created: careersinhousebuilding.co.uk and housebuildingcareers.co.uk.
Uniquely www.careersinhousebuilding.co.uk only features jobs directly advertised by developers rather than recruitment agencies.
You will also find housebuilding jobs on generalist job boards such as Reed and Monster. The downside of the generalist sites is that, due to their huge scope, it can be difficult to find what you are looking for in amongst the hundreds of other industries and sub sectors. If housebuilding follows industries such as accountancy and IT expect online job advertising to expand massively over the next few years.
Social Media: In such a competitive construction job market its worth considering every possible advantage over other candidates. Time is often a factor for recruiting builders so get your application in quickly. One way to keep up to date with the latest online jobs is through social media like Facebook, Linked In & Twitter as they are usually updated regularly. You can follow the online housing job boards here http://twitter.com/HousingCareers http://twitter.com/#!/housebuildjobs or join the Facebook page here http://www.facebook.com/pages/Careers-in-HouseBuilding/309948313624
3. Recruitment Consultants: Before the recession, they were probably calling you about positions they were working on. Now it is up to you to be proactive and make yourself known to them. Make a phone call to find out which consultant is the most appropriate one to speak to you for your region and particular discipline. Speak to that person and email a copy of your CV. Aim to cultivate a reciprocal relationship whereby you share contacts and news from the industry with them and in return you can expect to gain knowledge on current and forthcoming job vacancies. You are much more likely to have a positive impact than simply phoning around the recruitment consultants once a month to ask if they have any jobs to put your CV forward to.
The key players include PSD Group, Thomas Gray Assoc, www.edburydaley.com, SPR Search & Selection and Potensis.
Temporary job market: There are some temporary and interim jobs in the housebuilding sector but not as many as you might find in other areas such as IT. However one area that has a thriving temporary recruitment market is that of site based Sales Negotiators as builders strive to maintain their sales force.
Temporary sales jobs can be anything from a day to 6 months and can offer some flexibility around how often you work. Developers often need short term cover for holidays and sickness, or to cover whilst they recruit permanent staff.
Amongst the key players in the recruitment of sales staff are Maitland Selwyn , Fusion People, Team Sales and www.zed-sales.co.uk It’s important that you find the right agency for you because each of these businesses have there own regional strengths and weaknesses, supply different builders and pay different rates.
4. Networking: This has always been a helpful strategy in any industry but is particularly effective in the tight knit community of residential development. If you think networking means trying to make new contacts at industry functions, think again. You can start from the comfort of your PC by creating a profile on UK House building job updates from Linked in
It is free to use and is gaining real traction in the housing construction community. You can link to people you already know and then see who they know and develop your network that way. You can also get the latest updates on jobs by joining the Careers in housebuilding networking group.
However, don’t forget personal contact either by phone or face to face. You need to make the effort to stay in touch with former colleagues because they are your route to the industry grapevine and plenty of vacancies are filled without ever reaching the open job market.
So your have efforts have been rewarded with an interview? To make the most of it simply get the basics right. Is your personal presentation impeccable? Have you been on the company website to get some company information? Have you visited a site to see the product for yourself? Is there any background information online about the person you will be meeting? You need to score four out of four here or you will be at a disadvantage to the other candidates and in the current climate the other candidates will be strong and numerous.
So, to conclude, here are some general tips on your overall approach. Be positive and proactive. The more avenues you pursue the greater the chance of you finding employment. Having a clear plan of action encompassing all or some of the points above will give your job search organisation and impetus. Be pragmatic by taking part time or temporary work. Apart from providing some income it will get you closer to the grapevine and increases your chance of finding a more desirable position. It also demonstrates to any future employers that you were prepared to make the most of opportunities available at the time.
Simon Edbury is a specialist in new homes jobs
He and Andrew Daley regularly produce information relating to the UK house building job market