Identifying Talent in an Uncertain Market

2019 was a turbulent year for UK businesses, with the number of companies going into administration at its highest level in five years. Many businesses rely on the Christmas trading period and a recent survey of small businesses has shown that 22% believe they will not survive through 2020 if festive sales were poor, with 1 in 12 believing they would go out of business within a matter of months. This means that we could see further casualties in the start of 2020, as those businesses which struggle over the Christmas period often go into administration in the first quarter of the year.

One of the most recent examples to hit the news is Clinton Cards and while they secured a deal to safeguard their 2,500 employees and allow the stores to trade over the Christmas period; the outlook into the new year remains uncertain. Their employees must continue to work for the rest of the month, without any guarantee of job security.

Some of the other well known cases to hit headlines include Patisserie Valerie, Thomas Cook, Debenhams and Jamie’s Italian. When Patisserie Valerie announced their administration in January last year, 71 of their outlets were closed immediately while the other 122 continued to trade while they tried to find a buyer. This meant that there were 920 redundancies as the aftermath of the first closures, with a further 2,000 jobs hanging in the balance.

In June 2019, the chairman of Mothercare wrote that the group was “emerging from a period of acute financial distress” and yet by November 2019, it was announced that all their UK stores will be closed, putting 2,800 employees at risk of redundancy. Similarly, Jamie’s Italian who employed over 1,300 people were forced to close 22 of their stores, leaving only 3 in operation.

After Debenham’s announced their administration, 4,000 jobs were put at risk, with plans to close at least 50 of its 166 stores and yet only a list of 22 closures was released.

The common theme in these cases is the uncertainty for their employees. Some have been made redundant with little or no notice because the companies tried to hide their financial struggles from the public, or perhaps worse, some continue to work without any assurances for how long they can expect to remain employed.

Some of those working for Mothercare were informed about their redundancy on Wednesday 6th November and that they would not receive the wages due to them that Friday for the previous month. Meanwhile, Thomas Cook employees protested in London after they were informed of their former company’s collapse via WhatsApp with very little following correspondence. Around 9,000 staff from Thomas Cook outlets based in the UK have lost their jobs and are calling for the directors to hand back part of their bonuses.

In the wake of these numerous collapses, focus should turn to the people personally affected. These employees have been loyal to their organisations and found themselves redundant through no fault of their own. Some companies such as Virgin, TUI and Great Western Railway have already honed in on this; tweeting shortly after the announcement from Thomas Cook to offer their condolences and reach out to any former employees searching for new opportunities.

Meanwhile, Hays Travel who have bought 555 high street shops from Thomas Cook have pledged to help as many former staff members as possible and already saved up to 2,500 jobs. While some have questioned this decision, given the heavy reliance on online bookings in today’s market, the founders of Hays have recognised the value in industry knowledge and experience. The former employees of Thomas Cook already hold the expertise that Hays would desire from any new recruit and to not utilise this would be foolish.

2020 has started off with a spate of rumours regarding a number of companies that are struggling and may not make it through the year. Moving forward, recruiters should be paying attention to the news and reaching out to those people affected by company closures. Employes should also carefully monitor their organisations especially if there is derogatory news related to their operations because they can take some ownership by planning ahead if the worst case scenario happens. From each company that has been forced to liquidate comes a newly created pool of available candidates that should not be ignored. They have a wealth of knowledge and experience which can be an invaluable asset for those ready to invest in it and it is prudent for organisations in a candidate led market to act quickly to benefit.

References

https://www.theguardian.com/politics/2019/apr/30/uk-companies-going-into-administration-reach-five-year-peak-brexit

https://www.independent.co.uk/news/business/news/christmas-sales-uk-businesses-close-next-year-2020-a9229171.html

https://www.itv.com/news/2019-12-04/clintons-card-chain-secures-rescue-deal-to-safeguard-2-500-jobs/

https://home.kpmg/uk/en/home/media/press-releases/2019/01/administration-of-patisserie-valerie-update.html

https://www.bbc.co.uk/news/business-46965761

https://www.itv.com/news/2019-11-04/mothercare-where-did-it-all-go-wrong/

https://www.theguardian.com/business/2019/nov/05/mothercare-to-cease-all-uk-trading-with-loss-of-2800-jobs

https://www.companyrescue.co.uk/guides-knowledge/news/jamies-italian-in-administration-4327/

https://www.thisismoney.co.uk/money/markets/article-6899923/As-Debenhams-heads-administration-Hedge-funds-seize-control-department-store.html

https://www.moneysavingexpert.com/news/2019/04/debenhams-falls-into-administration---what-you-need-to-know/

https://toyworldmag.co.uk/news/mothercare-office-workers-unpaid-after-retailer-goes-into-administration/

https://www.itv.com/news/2019-10-02/from-worker-to-walker-a-thomas-cook-protest/

https://www.itv.com/news/2019-09-24/travel-industry-rallies-around-staff-affected-by-thomas-cook-collapse/

https://www.itv.com/news/2019-10-09/thomas-cook-hays-travel-high-street-stores-jobs/

https://www.itv.com/news/2019-10-09/the-wealth-hays-is-getting-people/