For Recruiter Magazine back office support feature - Sept 2009
- 1. What are the major issues affecting your recruitment clients right now? The major issues affecting our recruitment clients now are sales volumes, margins and costs. Finding appropriate financing solutions for their businesses can also be a problem.
- 2. How are you helping these clients in the recession? Oriel can help when clients suffer a squeeze on their finances. We work closely with clients to anticipate and resolve issues, and as a firm of accountants, we can help clients identify how to improve their business performance. Helping clients with their discussions with HMRC is also an important part of the process. We want our clients to come out of the recession in a strong position to prosper from the economic recovery.
- 3. New products? How are current products coming into their own? By linking together all the services and providing 100% financing, clients benefit from an integrated approach. Because we look after HMRC payments on behalf of our clients, they don't suffer as they could if using a factor. This is because the money from factoring current sales may not be sufficient to cover their HMRC liabilities, should sales volumes decrease. Oriel's approach, on the other hand, means that HMRC payments can be made without causing strain to the client's finances.
- 4. You have a unique insight into their business? - What's the state of your clients right now? In which industry sectors are recruiters faring well and which sectors not so well? What are the reasons for good or bad performance? What role have you played in improving performance? Recruiters are finding it particularly difficult at the moment and the construction sector is really suffering. Here at Oriel we've observed volumes reduced by around 40%. This drop happened late in 2008 into early 2009, and since then it's been absolutely flat with barely any movement. However in the last few weeks there is evidence that volumes are nudging up slightly and particularly interesting that this is showing in the construction sector. It is early days, but if this is an emerging theme it could be a good sign.
- 5. What is the pressure on margins on your clients? What are the reasons for this? Reasons for increasing pressure on margins are largely due to competition. There are simply more recruiters chasing less business.
- 6. Are payment terms being extended? Who is doing this? Recruiters? Employers? Both? Payment terms are being extended particularly by those companies suffering from cashflow shortages. This is not limited to the construction sector by any means.
- 7. Why are they extending payment terms? A shortfall in cash is the driver to extend payment terms.
- 8. What is the future for the back office support going forward? Back office support continues to be a particularly useful way for companies to organise their affaires. By outsourcing support functions such as payroll and invoicing, the client is able to focus on their core business activity, generating new business and servicing existing clients to a consistently high standard. In that way they will be far better placed to come out of this recession ready to exploit new opportunities.
