Tough job market sinks employment agencies

Indiana’s lofty unemployment rate not only is taking a toll on the jobless
but also the recruiters that help them find work, leading to the demise of several local employment agencies.

 

In July, the most recent month for which state unemployment statistics
are available, Indiana’s seasonally adjusted jobless rate stood at 10.6 percent—the third consecutive month it
has topped double digits and the highest it’s been since 1983.

 

“There’s no question it’s probably been one of the most challenging times in
the [employment] industry,” said Harry Danz, a co-founder of Indianapolis-based That’s Good HR.

 

Danz cut his staff from a high of 26 employees in December to 18
now, as the companies for which the firm helps find talent are no longer demanding its services as much.

 

Worse, though, is that the tight labor market appears to have claimed
at least three local companies. Phone numbers for staffing firms Alexander Talbott and Gin/Tek Associates have been disconnected,
while the most recent number listed for The Pyramids Group is an automated answering service for a company called Career Transition
Strategies.

 

Numerous attempts to reach
officials at these companies were unsuccessful.

 

None of the three employment agencies was among the 10 largest in the city, according to the most recent IBJ
statistics. And only Alexander Talbott boasted more than 10 full-time counselors.

 

But they weren’t fledgling upstarts, either. Alexander Talbott was nearly a decade old,
having been founded in 2001. The other two were much older—Gin/Tek was founded in 1983 and The Pyramids Group in 1976. 

 

The shakeout in the local recruiting industry is
just a microcosm of what’s occurring nationwide, according to the Los Altos, Calif.-based Staffing Industry Analysts
research firm.

 

Industry revenue plunged
nearly 60 percent in the first six months of this year compared to the same period in 2008, and financials weren’t expected
to improve much during the rest of 2009, the firm wrote in a recent report.

 

Most firms help companies fill temporary and permanent positions and get paid only when successful.

 

“Business in [the direct-hire] sector is likely
to remain rough going for the foreseeable future,” Staffing Industry Analysts said.

 

Pinnacle Partners, Indianapolis’ second-largest employment agency
based on full-time counselors, can relate.

 

“We’re
not seeing double-digit growth like we used to, but we’re still doing well,” company President Herb Benshoof said.
“In difficult times, you do what it takes to survive and come out the other side.”

 

Benshoof has expanded the footprint of his 10-year-old firm from central
Indiana to the entire state, in an effort to gain more business. He concentration is in accounting, finance, information technology
and health care.

 

Even so, if a company
is hiring, it might take six to eight weeks to fill a position instead of the more typical four to six weeks, Danz said. His
bread and butter is accounting/finance, human resources and operations.

 

If there’s a sliver of optimism, it may be that the state’s jobless rate has held
nearly steady since May, indicating the unemployment situation may be stabilizing.

 

Benshoof at Pinnacle Partners is sure business ultimately will pick up.

 

“If you treat everybody right,” he said, “it will
come back to you someday.”