Holding on, not looking for more?

Data was the must-have skills set at the start of last year. As the recession deepened, however, even these darlings of the business world faced pay cuts and job losses. David Reed finds out what the prospects are in this sector as the recovery starts.

One of the big political arguments about the recession is the extent to which Government intervention has helped to stave off unemployment. While job losses are still feeding through, it is true that there has not been the massive hike seen in previous downturns in the 1980s and even the 1930s. Spending on the public sector has helped to take the edge off the blow, it seems.

For private sector workers, however, there has been no such comfort. Even if businesses have not closed down, headcount reductions have been imposed, often through the removal of whole departments at a time. Bad things have happened to good people through no fault of their own as their employers did whatever was necessary to stay afloat. Recruitment consultancies themselves have been hard hit with one in three SME agencies closing down over the past year.

In the data industry, there is just as much scope for argument about the effects of the credit crunch. A year ago, when Data Strategy last looked at recruitment in this sector, analysts and insight practitioners, especially in the digital space, were in high demand. It looked as if this particular area of activity might be spared the axe as companies used their data assets to try and keep customer retention high.

Even so, some job losses have been experienced. Financial services providers have had to scale back and, as they withdrew from customer acquisition activity, commercial data and data services providers have really felt the pinch. Whether you took a hit or not depended on where you sat in the industry, rather than what you did with data.

For some companies, though, even the downturn has been a blessing. Sky has announced strong growth with a 10 per cent revenue hike and the addition of 172,000 new customers in the last quarter of 2009 alone. It is now just 300,000 customers short of its goal of 10 million subscribers by 2010.

For Simon Kaffel, data and analysis director, marketing strategy, at Sky, last year meant fresh recruitment. “We had a number of roles that had been frozen until our new human resources director had looked at the amount of resource needed against our business needs,” he recalls. “Then the freeze got lifted.”

That meant Kaffel was in the unusual position of being able to publicly tout for skilled analysts, telling delegates at his presentation during last June’s Data Marketing Show to get their CVs in. A queue promptly formed. “I was keen to make the most out of that recruitment window, not knowing when it might be closed again,” says Kaffel.

Good candidates were not hard to find. Among those pitching for a job were also a few chancers. “Some candidates were applying for a job where they had relevant experience – others had repurposed their CV to suggest they did. When I met them, it was fairly obvious they were the wrong people,” he recalls.

Of the seven positions Sky was offering, five have been filled and the other two are still pending the right individual. Kaffel says that the hardest post to recruit for has been head of analysis where a combination of the right skills set and personality are essential. The successful candidate has just started, bringing a blend of commercial awareness and leadership alongside the technical analytical nous.

One of the paradoxical effects in the current jobs market has been to increase the number of people looking for fewer positions while at the same time reducing the overall standard of those job seekers. The reasons for this are two-fold – less skilled or dynamic staff are cut first while the more able choose not to change their job.

“I got a sense that people who had a job were keen to stay and not rock the boat. The ’last in, first out’ mentality comes into play, so there is not a lot of movement among people who are strong in their existing roles,” says Kaffel.

Jeremy Bogush, director of Xcede Recruitment, witnessed the same effect on both sides of the recruitment market, among both employers and candidates. While companies looked to cut from among their newest joiners first, not least because the cost of shedding these staff is lower, data practitioners did not want to risk becoming that newest staff member by moving to another company.

Not that staff retention was all down to fear and inertia. “Where candidates did look around and get offers, they were getting massive counter-offers. Companies like Barclays, who couldn’t recruit or replace people, gave enhanced offers to stay,” says Bogush.

This is an unusual scenario and further evidence of the extent to which markets have broken conventional rules. Higher numbers of available candidates for jobs ought to lead to wage deflation. Instead, the recruitment freeze faced by many organisations has led to salary hikes for existing staff. Bogush calls it a “treble whammy” – clients were reluctant to recruit, candidates were reluctant to move, people were getting counter offers.

As Bogush notes, “it was an interesting year for recruitment because what we predicted at the start of 2009 didn’t happen.” Major brand names that are highly data-literate and driven by analysts, such as Sainsbury’s, Tesco, Marks and Spencer, all imposed recruitment freezes that lasted until summer 2009. “That was the bottom of the market with no movement,” he says. Even that powerhouse of analytics, DunnHumby, did not hire last year.

What we predicted at the start of 2009 didn’t happen.

For some companies, that stop on recruitment is still in place, although the broader market has eased. The impact has also been differential across skills areas. What looked like the hot hire for 2009 – web analytics – turned out to be one of the functions hit hardest by both freezes and redundancies.

From August onwards, new jobs positions did start to be offered, with an acceleration from the autumn. This pick-up in opportunities has come too late for many who lost their jobs early on and have since decided to leave the data industry. That is reversing the previous problem.

“We are now in a position where we have got too many roles and not enough candidates,” says Bogush. Those people with the right level of skills and experience were snapped up early one. Some employers have fallen victim to their own recruiting tactic of waiting for the perfect candidate, rather than making sure vacancies were filled. By holding out for the best person, many are now struggling to get anybody at all.

The result is a two-tier market in which the best people can virtually write their own cheques while many emmployers are having to make do with second-best. The double demand from companies with positions unfilled during last year and those starting to increase their data skills set is creating something of a skills shortage that could hamper the ability of companies to chase growth.

For Ian Thomas, director of Jobsworth Recruitment, this is just an example of “classic macro-economics coming into play in supply and demand.” Last year was a buyer’s market with employers feeling able to hold out for the right person and hold down salaries. There is even some evidence that companies took the opportunity of a data practitioner leaving to appoint a replacement on a lower pay grade.

That has led to something of a stand-off between employers and employees. “It comes down to salary expectations. In the database marketing world, they have mortgages, school fees, a lifestyle to fund. They are not manual labourers, but they have coss they need to meet,” points out Thomas. “Some couldn’t meet those expectations last year.”

So alongside the fear of LIFO can be added the need to maintain lifestyle. If your own data department has not been affected by staff turnover, it is not necessarily that everybody is happy to work there – it could just be that they are unable to find somewhere else to go.

Thomas warns that even where companies have made new hires, they may not turn out to be permanent. “Despite their willingness to take a punt in last year’s job market, it is a double-edged sword. The few that got good candidates may find they will disappear in six months when the economy recovers,” he says.

That is likely to be especially true of those “perfect candidates” – the more senior and experienced practitioners who employers realised they could take on at below the usual market rate. Once proper value returns to the job market, these individuals will want to realise their true salary levels.

Not all of them will be successful. In particular, the ability to realise a good income during 2010 will reflect the particular skills set an individual has. As last year, the main casualties will be those with softer backgrounds, rather than harder, hands-on abilities with data.

Philippa Spurrell, managing director of Marketing Stars, sees an important distinction. “There are still the issues of experience and knowledge balanced against salary expectations. There is generally a fair number of data sales professionals who are seeking their next challenge,” she says.

“However, the main difficulty for them – particularly in tough market conditions – is their salary expectations. They are used to earning substantial basics with significant bonus structures. They often want to change career path from sales to consultancy or agency. However, this often entails accepting a significant change to the overall package,” says Spurrell.

By contrast, data planners are experiencing strong demand as organisations look to develop a more integrated approach to their online and offline marketing.

“There are plenty of good planners that can offer one or the other, but those who have the integrated experience are the most in demand,” points out Spurrell.
Last year, it was web analysts who looked like the workers best placed to cope with the downturn. As things worked out, they were just as often victims of the cutbacks and enforced periods between employment. This year, even though headcount reductions have probably bottomed out, the uptake of data professionals back into the commercial world is still relatively slow. It could be another year before the need to fill data positions outweighs the need to keep down the cost of employing someone.

DM and CRM salaries:
Stability, rather than stellar salaries is the typical lot of the data professional. For many working within direct marketing or CRM functions, there may not be the glamour of front-line marketing. But there is a very real sense of delivering value to the business. Perhaps this is why salary levels remain moderate, especially as analysts and insight managers are rarely very demanding.

If data practioners have been able to rely on their employers to keep them even during a recession, then those same employers can probably also be confident that staff will not leave the moment things turn upwards. Among respondents to the Marketing Week Salary Survey 2010 working in these functions, more than half had been working in this field for over ten years. The majority have also worked in their current job for more than three years. That speaks of individuals who are engaged by the work they do, rather than just the remuneration
they receive.

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