THE GOVERNMENT has plenty of money to plough into the current economic situation and should act quickly to avoid any severe damage, according to Bill Evans, chief economist of Westpac.
Speaking at a recent RCSA (Recruitment and Consulting Services Association) breakfast, Evans said the economy was guaranteed to slow substantially – led by business and consumer confidence being at an 18-year low – however if the necessary action was taken now by both the government and the reserve bank, recession could be avoided.
“We are in a hugely positive fiscal position and [Prime Minister Kevin] Rudd and [Treasurer Wayne] Swan have plenty of money to throw at it,”said Evans.
He also said the Reserve Bank seemed shocked by the slowdown it had helped engineer and it needed to cut rates by half a per cent to get things moving.
“This rate cut is to avoid recession,not to create another boom,” he said.
Evans joined a panel of leading chief financial officers from the recruitment industry to share their insights into the financial year ahead. They said that while there was a cold wind blowing in the economy, good recruitment consultants could use it as a time to shine.
“It’s an excellent time for good recruiters,” said Mohit Prasad, CFO of Hamilton James & Bruce. “The good consultants are doing well, working well with their candidates and clients and making themselves seen as not just a cost for their clients but an integral part of their strategies.”
Duncan Thomas, director of Finite IT said that with a lot of new advanced technology coming on to the market to assist recruiters and candidates, the recruitment industry was still in a strong position, but the government must act to stop further downturn.
“We need some positive leadership from the government – they need to come off the fence and steer us out of recession’s way,” said Thomas.
Kevin Levine, CFO of Rubicor, said that Australia was in a good position and that while the economic conditions may soften, recruiters still had to assess how they conduct business and look to new innovative solutions for their clients and candidates.
“I believe the next big thing for recruiters is to take on the role of ‘talent lifecycle managers’,” said Levine. “This will mean managing candidates’careers rather than placing them in ad hoc roles.”
The panellists also looked at broader financial issues affecting recruiters,including the amount of business that consultants should be generating per month to keep their head above water. The general figures of $30,000 to $40,000 for junior consultants and $60,000 to $70,000 for senior consultants were cited.