Mature or established staffing firms should be very good at identifying their seasonalities. At my firm, we know within days or weeks when we will have highs and lows in volume. As a result, we were able to prepare for the waves in 2017.
Last year was uniquely different from any of the prior nine years I have been in this business. JBCStyle, our global fashion and retail search firm, began in 2006. JBCconnect, our creative and digital search firm, and Janou Pakter, our executive search firm, both began at or around the turn of 2011 into 2012. While some of these elements were potentially present in the recession that we built in 2008, our companies were not necessarily large enough to see or feel them yet. Here are some of the factors you may want to consider for your business this year.
Tourism and contemporary/luxury retail sales
Being afforded the great opportunity to be as large as we are in our niche allows us to look at domestic tourism and retail sales in two regards. First, there are the factual reported numbers, and then there is the personal relationship with hundreds of mid-tier to luxury retailers that rely heavily on us to support their hiring. Both of these indicators have pointed to the same thing in 2016, which is a real and measured slowdown in tourism and retail sales. These slowdowns have had the same immediate impact on retail, and it’s a complementary slowdown in hiring for store level retail and corporate hiring for these retailers.
A very mild winter coming into 2016 has also had a measured impact on retail sales and in turn has affected hiring. Coming off what should have been winter here in the U.S. and, specifically, the northeast to only have spring-like and mild conditions our U.S. retailers sales fell dramatically short on sales projections that could have been achieved had the weather been cold and the consumer spending on the necessity that a cold winter demands.
In our niche areas of expertise, there are many large household names that have hit the wall. Their businesses have become stale and stagnant and they are both revitalizing those businesses with a big change in leadership, vision and/or approach. They are shedding large pools of their talent to support new ideas, new passion and vision to reinforce the concept of transformation. These large-scale changes or transformations have created a pause, shift or restart in 2016 which have supported some uncertainty and disconnects in traditional hiring that these monster Fortune 100 and Fortune 500 companies traditionally create.
What is a tell-tale sign for staffing firms that own a vertical such as ours that are directly tied to the economy or our countries political uncertainty? It’s the green that makes everything move: cash flow. Cash flow has come to a screeching halt in 2016. Our terms with our client base are really simple and we have always built our business on a personalized relationship that has afforded us a great collection with our clientele (which on average stayed well below net 30 days from the transaction date). This year, everything has changed and, in a measured way, cash flow has moved from 30 days to 60 or 90 days.
Are doom and gloom expected for 2017? Not at all. Our businesses are up 31 percent over last year which at our size is a monster move. We are growing in almost every area, but it is not without its own unique and new set of challenges. Having our finger so closely on the pulse and continuing to build as an agile and malleable enterprise has afforded us the luxury to effectively forecast trends for the year ahead.
As we continue to boom as an enterprise, we also continue to mature and reinforce what was once a young fledgling infrastructure with brilliant minds. If I could make one suggestion to all of my fellow entrepreneurs, business owners and leaders it is to invest in your people. There is nothing more rewarding here at JBC then the success of removing “I” and focusing on “we.” Together we have been so successful as a company in being able to foresee the expected and unexpected and that has afforded us the opportunity to grow yet again for our 10th straight year in 2016, and we are anticipating the same for 2017 with an even larger step forward.