On Thursday the 28th of May, the Architecture, Interior Design and Visualisation community gathered together online to hear Martin Bennell, Managing Director of FRAME Recruitment deliver his Industry and Employment COVID-19 Update.
It is not “business-as-usual” in the Architecture, Interior Design and Visualisation sectors, and I think it’s fair to say that none of us has been through this one before! As a Managing Director with the responsibility of over 70 people myself, this is testing my business leadership skills to the limit. I know from the conversations that my team and I are having with practice owners and leaders, that we are all going through this together. How long will it last? How bad will it be? How do we operate in this new environment? Should I fire or should I hire? These are just some of the questions practice leaders are trying to answer.
The black and white have long gone, and we are now operating in a sea of grey. I thought it would be useful to share a snapshot of how we see practices approaching people and recruitment during the COVID-19 crisis.
Keeping calm and carrying on
I am not sure many practices would describe themselves as unaffected in the current crisis, but still, some practices are pressing on with their recruitment plans regardless. Practices working in High-end Residential, Healthcare and Care homes seem to fit this category most often.
These practices have furloughed very few, if any staff, and have continued to work on their long-term projects. The ones that have faired better in recent months are when they have had international projects and in the UK, the publicly funded ones.
As we saw in 2008 during the GFC, market turmoil will shake out ‘hard to recruit’ people that under normal circumstances, practices would find very difficult to recruit. Practices with a positive outlook and longer-term view of the world are snapping up these widely regarded, ‘unicorn’ candidates. Recruitment for critical positions has not been placed on hold, and some clients are simply elongating the search process while they manage their affairs.
Our research found around 30% of our clients are in this category. Some have even mentioned that they felt like they were working in a bubble. With so much negativity in the press, they felt that they may have missed something. If this is you and your business, do not panic. You went into this in ‘good shape’ and that gives you a great chance of a positive outcome post-crisis.
Rolling up the sleeves
I have spoken to practice leaders who have had to make a quick transition from ‘leading’ their business to ‘doing’ the business. Simply put, they are ‘rolling up their sleeves’. Becoming more hands-on has become the norm; making client calls, leading new business development, tendering activity and engaging with staff etc. They’ve had to adapt their skills to ensure they can provide emotional and mental health support or know where to signpost their staff for reliable information. It’s more important than ever to offer support to employees. It’s tough out there.
Spending freezes have been put in place, and often a central contact like the CFO is the final sign-off on all costs. These practices are also taking advantage of Government support, like the furlough scheme and business loans in the UK.
Owners in this category are reluctant to make hasty decisions to either hire or fire so are doing neither. From our data, under 15% of practices have made redundancies. We must remember in this category, most projects are on hold, and not cancelled and so this opportunity to delay important decisions is welcomed.
These practices are likely to have reduced pay and hours – but not always both. Some have temporarily reduced pay, but expect full-time hours, whilst others have reduced pay and reduced the hours to match. They’ve also removed bonuses and dividends.
These owners and leaders have implemented the strategy of survival mode. Approximately 60% of the clients we spoke to fit into this category. Decisions are being made in ‘real-time’ and with the best information available at that point. Quoting Nicola Sturgeon, “we cannot apply hindsight to our decisions”.
Closed until further notice
There is, unfortunately, the third category. A small number of practices have had to close up and cut their spending to as close to zero as possible.
Redundancies have already been made, and extensive use of the UK furloughing scheme is now in place. Typically the industries we are seeing mostly affected are Hospitality, Tourism, Retail and Transportation. From speaking to practices in the retail space, they’re not even sure if it will ever return to the previous normal levels based on the increasing adoption of online shopping.
These practice owners and leaders have implemented the ‘hope and pray’ strategy. We see approximately 10% of practices falling into this category. While some of these practices will return in the future, sadly there is the possibility that many will not.
What else is happening?
We are seeing other trends in the industry that broadly fall into two areas; adaptation & diversification and technology.
Adapting & Diversifying
Some practices have been quick to repurpose their staff, with many redeploying key members of their team to other projects. Some are even retraining them on different software to ensure they can assist in this time.
Many are now well-adjusted to the rhythm of working from home. Software like Zoom and Teams has made it easier for leaders to engage with employees than they had previously found in the office. In our 2019 survey, only 21% of the industry were offered to work from home. However, the sharp increase of enforced work from home has made what may have felt like a five-year project be completed in less than three weeks.
Practices are looking at long-term plans to diversify into new buoyant sectors and geographies. This may we be the right time to focus on international projects, ahead of UK projects, due to the lifts in lockdown being more advanced.
Tech is winning out
Practices are quickly adapting their recruitment processes and embracing technology to recruit and onboard remotely in the crisis. Interviews via Teams and Zoom are happening every day, online assessments are being completed, and laptops are posted to successful candidates as part of their virtual onboarding.
The latest Government policy has even allowed interviews to take place 1 on 1 in a park, with a 2-metre separation. As well as another client that agreed to interview on a cycle ride across London. There are some incredibly innovative recruitment processes happening and the industry is adapting well to the technological changes.
I always welcome feedback on our findings and would be delighted if you would like to discuss any of the trends in further detail. Please contact me here.