This month's UK's Research magazine highlights some of the pain that is beginning to hit the MR industry. Page six, alone, highlights four stories. GfK is losing jobs in its UK and US healthcare business. Company spokesman Jorg Peters said 40 jobs had gone already this year and "no more than a handful" will go by the year end - but bad enough if you are one of the handful.
Also in the healthcare field, Pearl Medical (a panel of 2000 doctors) has ceased trading due to a failure to find funding for a sale.
BMRB has announced that it is delaying it 2009 graduate intake scheme.
And finally, SPSS have announced that they are going to cut 10% of their staff. CEO Jack Noonan exposed an interesting side to his character when he said to Research "The worst thing you can do within an organisation is continue to trickle a cost-cutting out" and "You get it over with, get it done and move forward.Itd be great if we cut too far and had to hire tomorrow...". I think Noonan is wrong for two reasons: 1) he will demoralise staff with his proposition that it is great to sack too many people. 2) He is assuming that hiring new, good staff is as easy has making people redundant. The MR experience in the early 90s was that many people who were made redundant left the industry, making it hard to recruit on the upturn.
So, what would my advice be? Well, I would certainly be with BMRB and delay taking on new commitments. I think that every difficulty needs to be seen in both its short term and long term perspectives. In the short term companies need to either survive or prosper in the recession. In the long term one of the key things any research company has to develop is its human capital, i.e. the skill, effectiveness, and loyalty of its people. In general that means defending current employment, and using the flexibility of out-sourced solutions to take as much of the strain as possible.
If a company is facing the dreadful necessity of making people redundant, they need to factor the medium term costs of hiring and training people, along with the short-term need to reduce costs.
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