How Much Is The Government Spending!?

The usual go when the blog falls on awards nights is to give it the old college try at guessing the winners. It’s a tap-in of a blog, light-hearted, congratulatory, with a constant preface that I’ve no idea how they’re judged. So, there’s zero need to take umbrage. The only thing is, I’m not usually in attendance after my predictions. This was not the case for the RCSAs the other month. I’m sure the F-you's and middle fingers aimed in my direction from one of the winners made more sense in their head, as if they were Biggie and I was that Teacher that told him he would never amount to anything at the beginning of Juicy. As a result, I’m a little put off putting my c on the b. Luckily for me, news broke last week of something that was way more relevant to our industry. The Herald released a list of the top 10 consultancies providing consulting and contractor services to public service agencies, with how much they are spending! Making the $6 subscription for Herald Premium worth every cent!

They did point out that there is no data that aggregates how much each firm has made across the public sector, but they’ve made a limited tally. Looking at the 10 core public service agencies (Education, Health, Corrections, Internal Affairs etc.) with the highest contractor and consulting spending and totalled the 10 most highly paid providers to those agencies. I’ll put the list below but not the amount, I don’t think it’s necessarily accurate how much money they are supposedly generating. When you take pay rolling into account along with the actual output. I mean, the Big 4 are the ones really creaming it as they are charging more for their time and market knowledge as opposed to purely labour.

1. Robert Walters

2. H2R Consulting

3. Inside Executive Search

4. Momentum Consulting

5. Price Waterhouse Cooper

6. Beyond Recruitment

7. Accenture

8. Ernst & Young

9. Deloitte

10. KPMG

The numbers were eye-watering, but they were designed to be. Enough to make you look at the pothole outside your house and focus your ire squarely on the recruitment industry. With everyone from Act, National and Labour on the campaign trail vowing to slash public spending are Recruitment Agencies just an easy target? It’s a talent short market, speak to any recruiter who has worked on an AOG account and ask them if they think the margins are a true reflection of the candidate’s worth. Cards were shown this time last year when a new model was proposed for a new payment structure, it’s clear there’s a real desire to pay as little as possible for top talent. Thankfully, the RCSA valiantly took up the fight and won for the sake of common sense. The reason why AOG is a hot ticket is that while the margins aren’t great, there’s the promise of steady work and plenty of it! Not to mention that there are a finite number of suppliers you’re going up against and once the decision is made, it’s final. Unless you don’t get on the panel and then buy an agency that is. The concept is sound. But, with government spending scrutinised more than ever, what is next year going to look like for agencies who rely purely on their partnership with public sector agencies?

Like a babysitter in a 90’s horror who’s just had the phone line cut, a slashing is imminent. Certain agencies such as the Ministry of Business, Innovation and Employment, which have grown substantially in a very short period of time will be primed for a culling. Other areas will fare better. For the Consultants working in our capital, I would be looking at where the work comes from. Are all your eggs in one basket and is that basket likely to withstand the bluster that the Windy City can produce? Consultants and Talent Managers alike should be looking at the next 6 – 12 months and asking themselves, am I in the right place to do my best work? Now, I’m not suggesting that the market is going to fall off a cliff. The reality is that the demand for skilled labour will be as high this year as it is next. You just may be in a position where the flow of work reflects the more stop-start nature of recruitment we've had to contend with this year.