Staff losing jobs but still getting work

In the process of culling numbers, financial services firms have been found to not only be letting good staff go, but rehiring them as contractors shortly thereafter.

According to Craig Bernhardt, associate director, Robert Half, while in an economic downturn some companies “cut deep”, he has observed a trend of employers retrenching staff but two months later hiring them back as contractors because there is a lot of work that still has to be done.

“They’ll cut deep, they obviously need to be seen to be doing things,” he said.

“But those people obviously are quality individuals; they have a good knowledge of the organisation, they get them back as contractors, and I wouldn’t be surprised if a number of those people will be hired back into the permanent workforce in those organisations in the next 12 or 18 months when things return to the norm.”

Bernhardt said there is a “very small” talent pool of good candidates on the market who have been let go from their full-time employment and are being noticed by other firms.

“We’re talking to a few clients at the moment who are talking about up-skilling some of their staff and they’re aware that there is a talent pool out there, albeit a very small one, that is immediately available, that has been let go from organisations where they’re regretting it.”

Robert Walters managing director James Nicholson agreed that there seems to be a trend towards this sort of behaviour at the moment.

“What tends to happen in financial markets is people cut hard and they cut deep at the first sign of trouble,” he said. However, Nicholson added that people are still needed to process the trades and do the work generated by minor market rallies.

“There’s a definite float towards people having non-permanent members of staff at the moment, where there is more flexible arrangement there and they’re not appearing on a [profit and loss statement].”

Nicholson also said when boom times return, contractors are likely to be offered permanent employment by these companies again.

“The deeper the cuts, the more impact that’s going to have when it does bounce back,” Nicholson said.

“All my experience to date has been that at the first sign of recovery and volume’s improving, people get hired back en masse and the whole wage price fight continues in earnest.”